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19 1964

SUBCOMMITTEE ON DEFICIENCIES AND SUPPLEMENTALS

JOHN O. PASTORE, Rhode Island, Chairman

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DEFICIENCY APPROPRIATIONS FOR 1964

TUESDAY, MAY 12, 1964

U.S. SENATE,

SUBCOMMITTEE OF THE COMMITTEE ON APPROPRIATIONS,

Washington, D.C. The subcommittee met at 8:30 a.m., pursuant to call, in room 1223, New Senate Office Building, Hon. John O. Pastore, chairman of the subcommittee, presiding.

Present: Senators Pastore, Holland, Young, Saltonstall.

DEPARTMENT OF DEFENSE

SUPPLEMENTAL REQUEST, FISCAL YEAR 1964

STATEMENT OF JOSEPH S. HOOVER, DEPUTY ASSISTANT SECRETARY OF DEFENSE (BUDGET), OASD (COMPTROLLER); ACCOMPANIED BY MAJ. GEN. B. F. TAYLOR, DIRECTOR OF ARMY BUDGET, OFFICE OF THE COMPTROLLER, ARMY; CAPT. W. D. GADDIS, USN, ASSISTANT DIRECTOR OF BUDGET AND REPORTS, OFFICE OF NAVY COMPTROLLER; AND BRIG. GEN. W. E. CARTER, DEPUTY DIRECTOR OF BUDGET, OFFICE OF THE COMPTROLLER, AIR FORCE

TRIBUTE TO REPRESENTATIVE CANNON

Senator PASTORE. The committee will please come to order.

I think it should be noted that a shadow of sadness has enveloped this meeting this morning because of the unexpected death of Mr. Clarence Cannon, the chairman of the House Appropriations Committee, who passed away, I understand, in the early hours of this morning.

Mr. Cannon was a great American, a man who had served his country in the Congress of the United States for many, many years, and one of the best friends that the taxpayers of this country ever had.

Senator YOUNG. Mr. Chairman, I would like to join in the comments you made. Congressman Cannon was one of the ablest Members of the House, certainly a fine chairman of the Appropriations Committee, and one who was always looking for ways of saving

money.

He was a good friend of the farmers of this Nation.

ITEMS UNDER MILITARY PERSONNEL

Senator PASTORE. The Department of Defense has 11 items all under the "Military Personnel" title for which $1,087,400,000 was

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requested in House Document No. 203 and reduced to $1,042 million in House Document No. 197. The reductions reflected in House Document No. 197 result from a payment of $45,400,737 in settlement of the Australian, New Zealand, and United Kingdom accounts covering U.S. logistic support furnished the British Commonwealth force during the Korean war. These funds will be used for the purposes for which the additional funds were requested.

The original request of $1,087,400,000 was for two purposes; namely: (a) Funds required to meet military pay increases granted in the Uniformed Services Pay Act of 1963, Public Law 88-132, $853 million. (b) Additional funds required for programed military strengths, $234,400,000.

NOTE OF POSSIBLE SUPPLEMENTAL IN CONFERENCE REPORT

With respect to funds required for programed military strengths, it should be noted that the possibility of additional funds for this purpose was noted in the conference report on the Department of Defense Appropriation Act, 1964. The Congress made reductions totaling $359,500,000 in the various military personnel appropriations and the following statement was included in the statement of the managers in the conference report:

It is the intent of the committee of conference, in providing the amounts indicated in amendments Nos. 1 through 8, inclusive, to provide for carrying out the program of military personnel strengths proposed in the budget estimates. It is understood that adjustments may be sought in connection with the supplemental estimates covering the costs of the recently enacted military pay increase.

HOUSE AND DEPARTMENTAL REDUCTION

The House made reductions totaling $38,800,000, of which $28,300,000 was offered by the Department of the Army following a recomputation of requirements for the appropriations entitled, "Military Personnel, Army" and "National Guard Personnel, Army." The balance of the House reductions-$10,500,000-represents a 5percent reduction in those funds requested for "programed military strengths" for the Navy, Air Force, and retired pay.

The Department of Defense does not plan to appeal the House reduction.

I believe that Mr. Hoover is prepared to testify on all of these appropriations and that representatives of the budget offices of the three services are available for questioning.

Mr. HOOVER. Yes, sir.

Senator PASTORE. All right, sir.

STATEMENT OF THE DEPUTY ASSISTANT DIRECTOR OF DEFENSE

Mr. HOOVER. Mr. Chairman and members of the committee, we appreciate the opportunity to appear before this committee to present the request for supplemental appropriations for fiscal year 1964 for financing the costs of the military pay increase granted in the Uniform Services Pay Act of 1963, which became effective October 1, 1963; and for the additional funds required to fully finance the military personnel program being carried out by the Department of Defense during fiscal year 1964. The budget officers of the Departments of

the Army, the Navy, and the Air Force are present and are available to provide such information as the committee would desire on this

matter.

ESTIMATE AND APPROPRIATION, 1964

The President's budget for fiscal year 1964 contained an estimate of $900 million as the amount estimated to be required to finance the then proposed increase in pay and allowances, with an effective date of October 1, 1963, for military personnel on active duty, for reservists voluntarily participating in Reserve training programs, and retirees. Whereas the authorization for the military pay increase has been approved and payments thereunder have been made in accordance therewith since October 1, 1963, the request for appropriation for this item has not previously been presented to this committee. The budget estimate for this item was submitted to the Congress on January 21, 1964, House Document No. 203, in the amount of $853 million.

This amount is required to finance the approved military pay increases which were effective October 1, 1963, for the numbers of military personnel entitled thereunder and actually or forecast to be on board during the last 9 months of fiscal year 1964.

The Congress, in acting upon the Department of Defense Appropriation Act for fiscal year 1964, reduced the amount of obligational availability of the military personnel appropriations of the Army, the Navy, and the Air Force, and the retired pay appropriation of the Department of Defense by a total of $362 million.

EXCERPT FROM SENATE COMMITTEE REPORT

In doing so, it was the understanding between the Department of Defense and the Congress that the Congress intended the Department of Defense to cary out on an economical basis the proposed military personnel program as presented to the Congress. This is made clear on page 5 of the Senate Committee Report No. 502 where it was stated:

The committee expects the Department of Defense to practice every available economy to accomplish its programed objectives within the funds provided. However, should it become necessary for the Department of Defense to seek additional funds in order to maintain the military services at their programed strengths, this committee will entertain such requests when submitted in the usual manner and supported by detailed information indicating the added requirement.

SUPPLEMENTAL REQUEST, HOUSE DOCUMENT No. 203

The President transmitted to the Congress on January 21, 1964, House Document No. 203, a supplemental request for appropriations for this purpose in the amount of $234,400,000. This is $127,600,000 less than the $362 million by which the Congress reduced the obligational availability requested under the Department of Defense Appropriation Act, 1964.

These savings were occasioned primarily by somewhat lower strengths and less costly grade distribution of the military personnel than programed, and economy of operations. This adjustment of the additional fund requirements was accomplished as a result of

the review of the financial requirements of the military personnel appropriations by the military departments and the Secretary of Defense made at the time of the formulation of the fiscal year 1965 budget, and was reflected in the fiscal year 1964 column of the fiscal year 1965 budget.

The total amount included in the supplemental appropriation request for the military pay increase and to complete the financing of the military personnel and retired pay program discussed above was $1,087,400,000.

AMENDED SUPPLEMENTAL REQUEST, HOUSE DOCUMENT No. 197

Since the time the President submitted the supplemental request, House Document No. 203, certain events have occurred which were not then contemplated. An agreement was reached on February 5, 1964, between the United States and the British Commonwealth Governments providing for a payment of $45,400,737 to the United States in settlement of the Australian, New Zealand, and United Kingdom accounts covering United States logistic support furnished the British Commonwealth Forces during the Korean war.

Payment of this amount was received and on March 12, 1964, was deposited in the U.S. Treasury for credit to the current year appropriations corresponding to those which had provided the original resources, as required under applicable provisions of law (10 U.S.C. 2211).

Based upon a recommendation of the Secretary of Defense, the President on April 29, 1964, House Document No. 197, proposed an amendment to the supplemental appropriation request designed to reduce the previous request by $45,400,000.

APPLICATION OF FUNDS AS REDUCTIONS

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The amount received by the Department of the Army, $43.4 million, would be applied as a reduction to the supplemental request for the "Military personnel, Army" appropriation, and the $2 million received by the Air Force would be applied as a reduction to the plemental request for the "Military personnel, Air Force" appropriation. To provide for the application of these funds as desired, it would be necessary as proposed in House Document No. 197 that language be included to authorize the transfer of $20.7 million from "Operation and maintenance, Army," 1964 appropriation, and $6.5 million from "Procurement of equipment and missiles, Army" appropriation, to the "Military personnel, Army," 1964, appropriation, since these are the accounts into which the deposits were made.

LANGUAGE FOR AIR FORCE FUNDS TRANSFER

Senator PASTORE. Is that language provided in the House bill? Mr. HOOVER. Yes, sir. Likewise, in the case of the Air Force, language will be necessary to authorize the transfer of $2 million from "Operation and maintenance, Air Force," 1964 to "Military personnel, Air Force," 1964.

That language is also in the bill.

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