the list which has been associated with further studies that have been made within the Army, the same order of magnitude prevails. Where there is any change in items, sir, it is only because of the fact that it represents a look at the list at a later date. Therefore, I believe that it would answer your purpose exactly if we prepared and put in the record, although it would actually have to be in the classified record for the use of the committee because of the classification of this list, sir, the list of items which were contained in the D budget submission to the Secretary of Defense in our submissions last fall in the preparation of the 1962 budget. Mr. MAHON. If I may interrupt, Mr. Laird, it seems to me that this is not the witness to go into detail as to the merits of the list. I think we have to have the policy people on that issue. No doubt some changes in the budget will be recommended by the new administration. None of us know what they will be. This is probably not the time to go into the details of that but I think the information you have developed thus far is worthwhile. Mr. LAIRD. Mr. Chairman, the point of my questioning is I just want to know the difference. I understand there is a difference that exists between the list that you prepared in the early fall and the list which you prepared, and I understand you prepared this list or your office did, in early January. General DUFF. Mr. Laird Mr. LAIRD. The so-called E budget was submitted to Mr. Gilpatrick. General DUFF. Mr. Laird, with regard to our submissions that have been made to the Office of the Secretary of Defense, the list is generally the same as the list which was submitted in connection with the preparation of the 1962 budget and which was at the D budget level, which is discussed in Mr. Lincoln's statement. Mr. LAIRD. There was another list that was brought out this morning that I did not know about that the task force is working with. Where was that list prepared? General DUFF. As far as the list that the task forces are working with, sir, this is being prepared by various committees within the Office of the Secretary of Defense. I would assume that the eventual development as a result of the efforts of the task force will be the recommendations, when approved by the President, that he will make to the Congress at a subsequent date. The President, I believe, has stated that he will present a budget message to the Congress in detail at a later date and the task force work is the basis of the budget estimates or changes that will be presented at a later date by the administration when the decision has finally been made. RELEASE OF RESERVE PERSONNEL, ARMY FUNDS Mr. LAIRD. General Duff, you have a request that is presently pending for the release of $5.9 million in "Reserve personnel, Army"; is that correct? General SCHEWE. Yes, sir; that is correct. Mr. LAIRD. When did that request go forward? General SCHEWE. The request originally went forward to the Department of Defense on the 22d of November, sir. 66865-61-pt. 1—5 Mr. LAIRD. There has been no decision made in the Defense Department? General SCHEWE. We are meeting this afternoon with representatives of the Department of Defense, sir. REQUESTS FOR REAPPORTIONMENT OF PEMA FUNDS Mr. LAIRD. I did not get the dates on this release for $45 million. You have no requests pending for the release of the $45 million in "Procurement equipment and missiles, Army"? General DUFF. With regard to the $45 million, Mr. Laird, we have presented a reapportionment request. Mr. LAIRD. But you have no request pending? General DUFF. We have no request pending at this time. The decision has been made that this amount would not be made available at the present time, sir. Mr. LAIRD. Is that a recent decision? General DUFF. January 27, sir. Mr. FORD. The decision was made adverse on January 27? General DUFF. The latest official decision with regard to reapportionment, sir, was made on the 27th of January; yes, sir. Mr. LAIRD. That is all I have, Mr. Chairman. Mr. MAHON. It seems to me it would be well if you would put in the record not only the latest decision, but all decisions which have been made with respect to reapportionment. Lay it all out at one place. General DUFF. For the $45 million, Mr. Chairman? Mr. MAHON. Yes. (The information requested follows:) RECORD OF REQUESTS FOR REAPPORTIONMENT OF $45 MILLION (a) The remaining $45 million of the $158.3 million congressional add-on has been requested three times, as indicated below: (1) Reapportionment request No. 3, dated August 4, 1960. LAYAWAY PRODUCTION FACILITIES Mr. WEAVER. At the bottom of page 9 of your statement and continuing to the top of page 10, where the first complete sentence begins: The completion and layaway of production facilities is also supported by this appropriation could you tell me how much money is involved and how that compares with the budget for the previous year and could you elaborate a little further in detail as to what you mean there? General DUFF. Yes, Mr. Weaver. I will ask General Myers, from the Office of Deputy Chief of Staff for Logistics, to give this specific information, Mr. Chairman. Mr. WEAVER. How much money is requested here, how does it compare with the budget for the previous year, and would you comment in some detail and explain just what you mean? That is in reference to the procurement of equipment, missiles, et cetera. General MYERS. I am sorry. I do not have those details with me. General DUFF. May we insert that in the record at this point? Mr. WEAVER. Yes, sir. General MYERS. I have it in terms of installations, not in terms of dollars. General DUFF. It is in detail in the justifications. (The information requested follows:) For fiscal year 1962, the Army is requesting $41.1 million in the "Procurement of equipment and missiles, Army," appropriation for the provision and layaway of industrial facilities for future use, under the production base program. For this same purpose, the Army requested $38.6 million in fiscal year 1961 and obligated $28.1 million in fiscal year 1960. This provides for the establishment, rehabilitation, modernization, conversion, and expansion of facilities to support current production requirements and, in critical areas, to broaden the mobilization base. It also provides for the preservation and layaway of Governmentowned production facilities upon curtailment of current production and when required for future production. AVAILABILITY FROM DECREASE IN FUNDING OF GUIDED MISSILE PROJECTS Mr. WEAVER. At the bottom of page 10, you refer to the 1962 budget estimate for research, development, test, and evaluation. You say that Increases are made possible because of an $85 million decrease in the funding of guided missile projects. Then you refer specifically to PERSHING and NIKE-ZEUS. Can you tell me at this point which other ones are being reduced in amounts and about how much is applicable to PERSHING and to NIKEZEUS and the reasons therefor on ZEUS particularly? General DUFF. Yes, sir. General Dick of the Office of the Deputy Chief of Research and Development will provide this information. General DICK. Off the record. General DUFF. Mr. Weaver, this is classified information and we request authority to delete it from the record when it comes to us, but it is being provided for your information. Mr. WEAVER. I realize that. I was interested in it, since the PERSHING and NIKE-ZEUS were specifically mentioned as those in which reductions were taking place. That is all I have, sir. Mr. MAHON. Mr. Sikes. ARMY MODERNIZATION FUNDS Mr. SIKES. General Duff, do you consider that the Army has exhausted all of the resources at its disposal in its efforts to secure permission to use the funds that were appropriated by Congress for modernization? General DUFF. Yes, sir, Mr. Sikes; the Army has taken advantage of every opportunity and has pressed very strongly the requests for all of the additional funds provided by the Congress to be made available, and in my personal opinion, we have exhausted every resource. Mr. SIKES. The fact you have been refused does not indicate lack of interest by the Army, or any lack of need for the additional funds for modernization; is that correct? General DUFF. That is correct, Mr. Sikes. Mr. SIKES. General Duff, is it true at the present rate for procurement of modernization as contained in the 1962 budget the Army would never really become modernized, bearing in mind the fact that this is money for replacement, for wearout and obsolescence rather than for actual modernization? General DUFF. This is correct, Mr. Sikes, if we proceed according to the present program that we have lived under for the past few years, we will not be able to attain the modernization status which we feel is absolutely necessary to be able to carry out our commitments and our mission. Mr. SIKES. Mr. Chairman, I would like to extend my personal congratulations to General Duff on his assignment as Director of the Budget-possibly condolences would be more in order because the job of Director of the Budget is one of the more difficult in the Army or in the other services but it is also true the services do pick from among their best men for this difficult assignment. Mr. MAHON. I wish to join Mr. Sikes, congratulations on your selection for this difficult assignment. It will be a pleasure to work with you. REIMBURSEMENTS Mr. FORD. What is the story on reimbursements? How is it set forth, or what are you anticipating? General DUFF. Our reimbursement program, sir-in fact, both our direct obligation and reimbursable program-were covered in the statement that appeared on page 13, on chart No. 4. We anticipate reimbursements for fiscal year 1962 of $886 million. This compares to $1,157 million for 1961 and $1,153 million, the actual figure for fiscal year 1960. Mr. FORD. That is a fairly firm figure of $886 million for fiscal year 1962? General DUFF. As firm as we can estimate at the present time, sir. It does not include the military assistance program. Mr. FORD. How much do you estimate reimbursement from "Military assistance" in fiscal year 1961? General DUFF. The current estimate, sir, is that the reimbursements for fiscal year 1961 for the military assistance program should be on the order of $293 million. Mr. FORD. Is that reflected in the $1,157 million? General DUFF. It is, sir. Mr. FORD. But the $886 million figure for fiscal year 1962 does not include any anticipated reimbursements from "Military assistance"? General DUFF. It does not, sir. Mr. OSTERTAG. With that difference, it would really be more, would it not? General DUFF. It would be somewhat greater, we believe; yes, sir. Mr. MAHON. Thank you very much, gentlemen. FEBRUARY 20, 1961. NAVY BUDGET SUMMARY WITNESSES REAR ADM. M. A. HIRSCH, USN, ASSISTANT COMPTROLLER, DIRECTOR OF BUDGET AND REPORTS BRIG. GEN. H. NICKERSON, JR., USMC, FISCAL DIRECTOR, MARINE CORPS COL. W. H. SOUDER, JR., USMC, HEAD BUDGET BRANCH, FISCAL E. F. VENN, DIRECTOR, ESTIMATES AND ANALYSIS DIVISION Mr. MAHON. Gentlemen, we are receiving statements today in regard to the budgets of the services. We are interested now in exploring some of the details of the Navy budget. Will you proceed? Mr. LIPSCOMB. Mr. Chairman, may I ask a question? Mr. MAHON. Yes. Mr. LIPSCOMB. I notice that the admiral's statement is not dated. I was wondering what the date of the Navy's statement was. was it prepared? When Admiral HIRSCH. The date of the statement is as of yesterday, sir. It was prepared as of yesterday. Mr. LIPSCOMB. This is a current statement? Admiral HIRSCH. It is a current statement with the exception of the tables which were prepared on January 16. I have a recently revised copy of the tables which will be inserted in the record, that show the adjustments as a result of the POLARIS program acceleration, but today I will speak to the tables as they were prepared on January 16, since they are in the text of my statement. You will find very little variation, if any, in the items to which I speak. GENERAL STATEMENT OF NAVY BUDGET OFFICER Mr. Chairman, members of the committee, it is a distinct pleasure for me to appear before you for the first time in my capacity as the Assistant Comptroller of the Navy, Director of Budget and Reports. Since the policy statements of the Secretary of the Navy, the Chief of Naval Operations, and the Commandant, Marine Corps, which would normally precede my statement, have been deferred until a later date, I will briefly touch upon some of the overall considerations which have influenced the development of the fiscal year 1962 budget for the Department of the Navy. Following this, I shall summarize the fiscal implications of each appropriation and draw some comparisons between the fiscal year 1962 budget and those of prior fiscal years. The exhibits referred to in my statement will be placed in the record. at the conclusion of the general statement. |