Mr. MAHON. What would be the effect in your opinion of a limitation holding the services to the amounts proposed in the President's budget? General COLLINS. Mr. Chairman, I do not think the Army can live with the $227 million that is in the President's budget. I think we need in the neighborhood of $28 million additional in order to carry on with the restrictions we have this particular year. Mr. MAHON. How do you propose to get that money? General COLLINS. I have requested this through higher authority and have not got a reply yet, Mr. Chairman. Mr. MAHON. If this much money is required, if the discrepancy is that great, why was such a poor job of salesmanship done by the appropriate people in the Army on this issue? General COLLINS. I think some people in the Secretary of Defense's office realized we were cramped, other people did not, and I think they felt the Congress wanted this and they were going to try to make us live with it. I think we went to the utmost on our salesmanship. Nobody proved we were wrong. All I can say is, their judgment prevails. They are the boss and that is what we got. Mr. MAHON. If you had a good case and you could make it crystal clear so anyone would readily understand and comprehend, it would seem that the budget, which is a very sober document, would have provided the minimum funds required, and yet you say the minimum funds are not in this budget? General COLLINS. In our estimation. Everybody has his own opinion. This was ours, but the people in higher authority figured we could live with the lesser amount of money. Mr. FORD. The figure that is in the budget for fiscal 1962 compares how with the figure in the appropriation bill for fiscal 1961 in this area? General COLLINS. It is the same figure appropriated by Congress in fiscal year 1961. Mr. FORD. There is a supplement before the Congress now to add to the fiscal 1961 budget in this category? General COLLINS. Well, Mr. Ford, there is a supplemental of $7 million in MPA to pay for the 2,500 man-years authorized overstrength during the earlier part of this fiscal year. Within that $7 million, there is a portion for the permanent change of station travel raused by this particular overstrength. Most of these are intake people who make actually three moves. They come into the reception station, go to the training center, and then go to a unit overseas. This travel is included in this supplemental of $7 million for MPA. Mr. FORD. The net result is in the fiscal 1962 budget before us. You have exactly the figure that the Congress gave to the Army in this ategory for fiscal 1961? General COLLINS. That is correct, Mr. Ford. Mr. FORD. You were not able to sell higher authority in the Pentacon for an increase in the budget for fiscal year 1962? General COLLINS. That is correct. Mr. FORD. You say that, in your judgment, is an erroneous conlusion by higher authority? General COLLINS. I feel that way; yes, sir. FISCAL YEAR 1961 REQUIREMENTS UNDERESTIMATED Mr. FORD. You were not able to sell them. I think it would be beneficial if General Collins could give us the same evidence that was given to the higher authority and maybe we are more receptive. Let's see what the facts are. General COLLINS. Well, to start with, in our budget submission last year we were $20 million underestimated. Mr. MAHON. Your budget submission for what fiscal year? We had been basing our budget estimates on previous year obligations and expenditures in this particular area. We found out that the expenditures for fiscal year 1959 were $20 million more than we had estimated. However, we did not get this information until after we had submitted our budget figures for fiscal year 1961, so we started off $20 million underestimated. Then we were reduced by approximately $13 million on that budget submission which was $20 million underestimated, which made a total of $33 million we felt it was short. Mr. FORD. This $13 million reduction came where-in the Pentagon or the Congress? General COLLINS. In the Congress. The Congress made a reduction of $13 million. So it was a $33 million shortage; but the prime thing in the whole thing was the $20 million underestimate in our figures for the fiscal year 1961. Mr. FORD. What was the figure the Department of Army submitted to higher authority in the Pentagon in this category at the time the 1962 budget was put together? General COLLINS. It was $255 million. Mr. FORD. A difference of? General COLLINS. $28 million. Mr. FORD. You were not able to sell that $28 million increase to higher authority? General COLLINS. That is correct. Mr. FORD. When the 1962 budget was put together? General COLLINS. That is correct. Mr. FORD. Can we have the specifics as to why the Army thinks there should be this added $28 million? I think that is the crux of the problem. Mr. MAHON. We shall insert it in the record at this point. (The information to be supplied follows:) JUSTIFICATION OF PERMANENT CHANGE OF STATION TRAVEL, FISCAL YEAR 1962 THE REQUIREMENT In November 1960 the Army submitted to the Office of the Secretary of Defens an estimate for permanent change of station travel for fiscal year 1962 of $25. million. This figure was reduced by higher authority to $227 million with t apparent intent of requiring the Army to remain at the level of funding provide by the Congress for travel in fiscal year 1961. In my opinion, this estimate of $255 million is necessary to meet the minima austere requirement for permanent change of station travel in fiscal year 196. I will justify this statement in the following paragraphs. DEVELOPMENT OF ESTIMATE Army permanent change of station travel estimates are based upon the latest available travel expenditure experience. There is a significant timelag in this expenditure experience. The fiscal year 1961 estimate was prepared in the fall of 1959, some 8 months before the start of fiscal year 1961. Expenditure data for fiscal year 1959 at that time was incomplete and almost no experience for 1960 was at hand. Based upon the 1959 experience, the fiscal year 1961 estimate by the Army was $241 million: Expenditure data available in fall of 1959 when fiscal year 1961 estimate was prepared As 1959 expenditure experience was completed and experience for 1960 was accumulated, it became apparent that the 1961 travel estimate of $241 million was understated by $20 million: Expenditure data available in fall of 1960 when fiscal year 1962 estimate was prepared 1 As of Dec. 31, 1960, the expenditure figure reached $253,263,633 and is now projected to reach $258,000,000. Thus, the Army request to the Congress for fiscal year 1961 should have been for $261 million. The Congress reduced the travel estimate as submitted by the Army by $13.4 million which meant that the Army entered fiscal year 1961 with bit $227.6 million to support a $261 million requirement. FISCAL YEAR 1961 ACTIONS The Army instituted restrictive actions which are expected to reduce travel expenditures in fiscal year 1961 by $21.5 million to a total of $239.5 million. The difference between this figure and the $227 million appropriated is being met by programing action within MPA. The major restrictive and economy actions adopted to reduce PCS travel and related costs in fiscal year 1961 were the following, with expected savings: 1. Temporary duty in conjunction with permanent change of station was reduced from 7 days to 1 day ($1 million). 2. The use of commercial transportation to areas served by MATS and MSTSLas been eliminated ($2.5 million). 3. The input and movement of Active Army and RFA trainees has been closely coordinated to reduce movement within the training base ($0.5 million). 4. Officers have been stabilized in CONUS assignments for 2 years except for assignments to and from command positions at battalion and higher echelon $1.2 million). 3. Enlisted personnel have been stabilized in CONUS assignments for 18 months. cept for non-prior-service trainees ($0.4 million). 6. Personnel in oversea assignments have been stabilized in positions for the entire oversea tour except for reassignment to and from command positions at attalion and higher echelon ($0.4 million). 7. Reception stations were established at Forts Benning, Hood, and Riley which provides reception stations at all installations conducting basic combat training ($1.6 million). 8. Maximum use is being made of MSTS to move troop class replacements to Europe which is less costly than MATS but, of course, slower thereby reducing manpower utilization ($1.1 million). 9. Involuntary extension into fiscal year 1962 of those military personnel scheduled to return in June 1961 from oversea "long tour" areas ($11.2 million). 10. Elimination of intraoversea and intracontinental U.S. moves in June 1961 ($1.6 million). THE FISCAL YEAR 1962 ESTIMATE Projecting the fiscal year 1959 and fiscal year 1960 experience forward and considering the continuing effect of restrictive policies introduced in fiscal year 1961, the funding level for the minimum austere program required for fiscal year 1962 is estimated at $255 million. The austerity in this program becomes evident with the realization that it provides approximately $11 million more than in fiscal year 1960 for essential deployment of new units. It also recognizes that some portion of the June deferments of fiscal year 1961 will be added costs in fiscal year 1962. Even with these additions the fiscal year 1962 estimate is less than for fiscal year 1960. ADDED COSTS The foregoing raises the natural question of why Army PCS travel costs remain at a level of over $250 million when restrictive actions have been taken and congressional interest in reducing travel costs has been so evident. tion arises from several factors. In brief these are: This condi 1. The percent of enlisted men who are entitled to travel allowance for dependents increased from 30 percent in 1958 to 38.3 percent in 1960. Officers so entitled increased from 86 to 87.9 percent during the same period. 2. The average number of dependents per individual eligible to travel allowances for dependents increased from 2.52 to 2.76 per officer and from 2.8 to 3.25 per enlisted man between 1958 and 1960. 3. Operational requirements for missile units, aviation companies, and communications as well as the decision to increase our U.S. spaces in Korea have offset other reductions in the volume of travel. 4. Certain procedures have evolved over the past few years which have transferred costs from other accounts or appropriations to the MPA PCS travel budget program: (a) Commercial storage of household goods is authorized in lieu of storage in government facilities (instituted 1957, added cost $5.1 million.) (b) Certain packing charges formerly performed by military agencies are now performed on a contract basis and charged to this appropriation (not available). (c) MATS has become an industrial funded operation charging MPA for air travel formerly performed on a mission basis (instituted January 1, 1958, added cost $23.3 million). (d) MSTS has become an industrial funded operation charging MPA for movement services formerly performed on a mission basis (instituted July 1, 1951, added cost $40.6 million). (e) Port handling has become an industrial funded operation charging MPA for services formerly performed on a mission basis (instituted July 1, 1959, added cost $7.5 million). (f) Mileage allowance for separation travel which was previously paid under the pay and allowance projects has been made a charge against the PCS travel account ($15.2 million, effective July 1, 1958). (g) Dislocation allowance which was previously paid under the pay and allow ance projects has been made a charge against the PCS travel account ($9.4 million, effective July 1, 1958). In spite of these additions, the restrictive actions the Army has introduced havi held PCS travel costs to comparative levels of expenditures in the past severa years. THE NATURE OF THE ARMY PCS TRAVEL PROGRAM As a basis for understanding the actions which the Army can feasibly take to remain within a reduced funding level for travel for fiscal year 1962, a general outline of the nature of the Army PCS travel program is pertinent. The Army PCS movement program is formulated to support the operational and training missions of the Army. It provides for travel in four general categories: (a) Travel for processing, training, and assignment of new personnel. (b) Separation travel for personnel whose terms of service have expired. (c) Travel to, from, and within oversea commands to support the oversea commitments and missions of the Army. (d) Other travel required for the career development and education of members, for reassignments necessary to maintain the combat readiness of the Strategic Army Forces and the Air Defense units in the United States, and for travel necessary to respond to changes in organization and equipment of the Army which necessarily requires unit deployments and individual transfers to provide new skills or allocate old skills. The bulk of this travel, that is all travel incident to the first three mentioned categories, is fixed in direct relationship to the strength, deployment, and combat effectiveness of the Army. Of all moves planned for the Army in fiscal year 1961, 91 percent fall into this fixed category and are subject to little reduction so long as the strength of the Army remains constant, terms of obligated service and enlistment remain as presently authorized by law, oversea deployments remain unchanged, and foreign tour lengths as fixed by the Department of Defense remain the same. From a dollar standpoint, 89 percent of all travel expenditures are chargeable to these fixed categories, leaving but 11 percent of the total travel dollars for the other travel requirements of the Army. This "other" category constitutes the primary area against which travel restrictions can be assessed. IMPACT OF A REDUCED FUNDING LEVEL IN FISCAL YEAR 1962 The Army made every effort in fiscal year 1961 to create a PCS travel program within the available $227 million. Even after exhausting the feasible actions, this program is now estimated at $239.5 million. To achieve this level required reductions of approximately $21 million from the planned activity for fiscal year 1961. This austere situation in fiscal year 1961 will be projected forward and become more acute with the level of $227 million in fiscal year 1962. To reduce the funding level of the PCS travel program to $227 million in fiscal year 1962 will force suspension for the entire year of approximately two-thirds of all permanent party moves within the CONUS and many critically needed moves within oversea commands. This will drastically curtail the required moves in support of: (a) Reassignment within oversea areas to meet technical skill and command requirements, principally in Europe. (b) Strategic Army Corps (STRAC). (e) U.S. Army Air Defense Command. (d) Strategic Army Forces (STRAF), which includes and supports the STRAC. (e) Career development of key personnel. (f) Replacement of losses due to separation, death, promotion, or other operational reasons including necessary reassignments to oversea areas. (g) Activations and reorganizations of units to accommodate new weapons and systems. SUMMARY 1. The Army PCS movements program supports the operational and training missions of the Army. 2. The Army during the past years has instituted restrictive policies designed to reduce PCS travel costs, which have severely strained the operational effectiveDess of many of its commands and units. 3. The requirement of $255 million in fiscal year 1962, reflects my estimate of the minimum austere travel program within which the Army can meet its operational, training, and career development requirements. |