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Volume 3, Issue #8February 25, 1999

TABLE OF CONTENTS


Running Out of a "Few Good Men and Women" -- Part II
Colonel Dan Smith, USA (Ret.), Chief of Research, Center for Defense Information
dsmith@cdi.org

One of the standing claims of the military in past decades is that the services "took care of their own." If there wasn't a "welcome wagon" volunteer who showed up at the door as a new family moved into quarters, there at least was a Family Service Center or a Welcome Center where arriving personnel (and their families) could go for information and orientation.

Help was also available in other forms. Whether arriving or departing from a base or post, there was always a lending closet for critical items that might be needed. For those who needed an emergency loan, Army (or Navy or Air Force) Emergency Relief was at hand. And while first sergeants, sergeant majors, and commanding officers insisted that every person had to stand on his or her two feet, they were willing to go to bat for anyone with a legitimate problem who was also putting forth real effort.

Now come the President, the Secretary of Defense, the Joint Chiefs, and most recently the Congress throwing money at an across the board pay raise of either 4.4% -- the Administration's proposal -- or 4.8% -- the Senate's bill, which itself is a major departure from normal congressional practice because it strips the pay issue from the overall DoD money request.

Across-the-board salary increases, just like across-the-board tax cuts, make good politics but in the end they may be bad policy for those trying to keep good men and women in uniform.

Consider the following:

Preliminary findings from an ongoing General Accounting Office probe (reported in Defense Week) indicate that the four top reasons for leaving the service are health-care, frequent deployments, equipment and spare parts shortages, and "dissatisfaction with the military leadership" -- particularly "not taking care of the troops as the first priority."

Annually, some 11,000 military dependents (wives and children) who move with the spouses overseas lose their eligibility for assistance under the Women, Infants, and Children (WIC) program. The cost of extending this benefit is estimated to be a mere $5 million annually, and in 1995 Congress authorized the benefit. But the Pentagon and the Department of Agriculture are in a food fight over who will pay the bill. For the next three years neither the Defense Department nor Agriculture bothered to ask for money to fund the program and Congress, for its part, did not appropriate any. And although the DoD Authorization Bill for 1998 specifically said the Pentagon was to use its funds for the program, DoD still has not requested money and none has been voted.

Food stamps present a similar problem. In a January 1997 News Briefing, the Pentagon said that approximately 12,000 military personnel with families were eligible for food stamps. In remarks on the Senate floor when the pending Senate bill was introduced on January 19, 1999, Senator John McCain reaffirmed that this figure (11,900) had not changed. The Senate legislation will provide a special subsistence allowance of $180 per month for eligible service members (enlisted grades E-5 and below) whose families are living in the U.S. But this assistance disappears if the families relocate abroad on permanent change of station orders. (Ironically, an initial analysis by the Congressional Budget Office indicates that few beneficiaries would get off food stamps because the subsistence pay increase would drop their food stamp payments about $54 per month on average.)

What neither the Administration, the Secretary of Defense, the Joint Chiefs, nor the Congress seem willing to tackle is the question of why so many men and women in the military are not receiving a living wage, one that doesn't require either food stamps or WIC assistance.

But there are other quality of life issues that need to be corrected if the military wants to retain good people.

The Pentagon controls housing for 320,000 families and 383,000 unmarried service members. But in testimony before the Senate Armed Services Committee on February 3, 1999, General Henry Shelton, Chairman of the Joint Chiefs of Staff, conceded that 66% of family housing units "are substandard" and 25% of barracks spaces "do not meet current standards." Moreover, the is a "shortfall of 42,000 additional [barracks] spaces."

"Child care helps military families achieve economic security in a time when two incomes are essential." In the mid-1990s the Pentagon estimated that there were 1.2 million children under age 12 in military families and that it provided child care services in 811 Development centers and 9,700 homes. At the end of FY1996, however, it had space for only 166,322 children -- just 56% of the maximum requirement for child care services.

The Military Health System delivers health care to 5.9 million eligible active duty and retired service members and their families at 115 hospitals and 450 clinics. While the vast majority of military doctors and other health practitioners are top notch, the military has some who are in fact dangerous to their patients. A year-long investigation by the Dayton Daily News (reported in October 1997) noted that some 200 doctors had practiced medicine in the military even though they had records showing incompetence or malpractice. Seventy-seven doctors either failed state licensing exams or had not presented evidence that they had taken the exam. In addition, more than 1,000 malpractice claims had been lodged at military medical centers.

DoD also has a civilian-provider program, called TRICARE, that it began in mid-1995. But the system is under heavy fire from service members who find it expensive, unresponsive and bureaucratic, and complicated. Congress is working on measures that allow "portability" of care and an expansion of the health care provider network by increasing payments for some treatments and faster processing of claims.

In sum, "taking care of our own" will require much more of the Pentagon and Congress than simply an across-the-board pay raise. Congress and the Administration need to look closely at real remedies for real problems without driving costs out the roof. A living wage for everyone wearing a uniform ought to be the bare minimum.


General Dynamics Moves to Acquire Newport News Shipbuilding
Chris Hellman, Senior Research Analyst, Center for Defense Information
chellman@cdi.org

On February 18, General Dynamics Corporation announced that it had made a $1.4 billion bid to acquire its rival, Newport News Shipbuilding Inc. If the deal goes through, it would leave the U.S. Navy with only one supplier of nuclear powered vessels and would consolidate four of the nation's six defense shipyards under a single owner. Currently, both General Dynamics and Newport News build nuclear submarines for the Navy, while Newport News is the nation's only supplier of nuclear aircraft carriers.

The prospect of concentrating so much of the nation's military shipbuilding capability under one company is raising questions in the defense industry about possible anti-trust issues. Because competition is believed to help keep market prices down, federal regulations require that the government examine major corporate mergers to prevent anti-competitive consolidation in a given industry.

Speculation that the government might not approve the General Dynamics plan has been fueled by the Justice Department's decision last July to challenge the merger of Lockheed Martin and Northrop Grumman because of its potential for eliminating competition in the aerospace industry. That decision led Lockheed Martin to drop its plans to acquire Northrop Grumman and effectively halted the recent spat of defense industry mergers. As a result, Newport News has stated that it will not consider General Dynamics offer until it has received some assurances from the Defense Department that the deal is acceptable.

Further complicating the issue is the fact that the government gave final approval this week for Newport New's proposed acquisition of Avondale Industries, the nation's fourth-largest military shipyard. And though Avondale and Newport News officials have stated that they plan to proceed with finalizing the merger -- and General Dynamics officials have not, as yet, asked them to do otherwise -- the addition of Avondale to the Newport News-General Dynamics merger would unite five of the nation's military shipyards, leaving only Ingalls Shipbuilding as an independent yard.

While concerns about the effects of the proposed General Dynamics-Newport News merger might lead one to believe that the proposal is "Dead on Arrival" at the Pentagon, this is not necessarily the case. Supporters of the plan note correctly that no real competition currently exists between the two yards. Only Newport News builds nuclear aircraft carriers, and GD's Electric Boat facility and Newport News, the nation's two nuclear submarine yards, are jointly producing the Navy's new "Virginia" class attack submarine. Further, industry experts estimate that there is currently between 30% and 50% surplus capacity in the Navy shipbuilding industry. A merger could eliminate some of this surplus, thereby reducing overhead costs and lowering the cost of future Navy programs.

Similar consolidations have occurred in other areas of the defense industry. For example, there is now only one tank manufacturer in the United States, and, depending on the outcome of the competition to build the Joint Strike Fighter, there may eventually be only one manufacturer of fighter aircraft.

Many questions remain unanswered, however. What, if any, effect would the merger have on the Virginia class submarine program, given that the current teaming arrangement, which was intended to keep both yards operational and competing, adds by the Navy's estimates at least $1 billion to the cost of the program? Will General Dynamics, despite its pledge to keep both the Connecticut-based Electric Boat and Newport News shipyards open if the proposed merger goes through, eventually close one? What is the future of Avondale if it is not included in a successful General Dynamics-Newport News merger? These questions will likely all arise in the coming days once the government begins its analysis of the General Dynamics bid.


And the Winner Is....the KLA
Tomas Valasek, Research Analyst, Center for Defense Information
tvalasek@cdi.org

The Rambouillet talks to fashion a Kosovo peace agreement ended with much confusion on Tuesday. Negotiators failed to gain a full and unconditional agreement from any of the parties involved, the Yugoslav government or the Kosovar representatives. After much persuasion, the Kosovo Albanians' delegation gave tentative approval to the proposed document but requested time for consultations with the people of the province. The talks are expected to reconvene within three weeks at a yet undisclosed military base in France.

The Yugoslav government continues to oppose deployment of a NATO peacekeeping force in Kosovo. The Kosovar delegation initially rejected clauses calling for disarmament of the Kosovo Liberation Army (KLA), the armed guerilla group seeking independence for Kosovo from Yugoslavia. The Kosovo Albanians also demand that a provision for a referendum on Kosovo's political status be inserted in the agreement. The Kosovars view the referendum as a path to ultimate independence from Yugoslavia.

With the talks in recess, the KLA is moving towards solidifying power in Kosovo. The armed group announced a new military leader and designated Adem Demaci, a veteran Kosovo politician closely associated with the KLA, as its political leader. On Wednesday, the KLA news agency reported that the organization also had formed a provisional government headed by a KLA prime minister. Since the provisional government presumably would carry out all activities normally found in national governments, the KLA has, in effect, staged a coup -- Kosovo already has a civilian government elected by a popular vote (albeit unrecognized by the Yugoslav authorities).

On a practical level, the KLA ascent to power may simplify the often torturous negotiations among the often antagonistic factions in the Kosovar delegation. The guerillas' support among the general population has already eclipsed that of the elected Kosovo representatives whose efforts to advance the Kosovars' cause peacefully have been fruitless. If the KLA can consolidate its own ranks and establish a viable government, it would give the European and American negotiators a more reliable partner on the Albanian side.

But the KLA move may also make the overall agreement hard to reach. Unlike the previous elected leadership, which on occasions indicated a willingness to accept less than complete independence for Kosovo, the KLA is fiercely pro-independence.

The peace agreement proposed by the Contact Group of five western nations and Russia falls short of independence, promising no more than autonomy for the province within Yugoslavia. Although the Albanians gave their conditional approval on Tuesday, the delegation as a whole and the KLA in particular is split and wavering on Tuesday's commitment.

In the longer term, the guerillas' reach for complete power may be destabilizing as well. Some elements of the KLA favor integration with neighboring Albania, a step which would likely touch off unrest in adjacent areas that house Albanian minorities -- Macedonia, Montenegro, and the rest of Serbia.

The Contact Group bears a large portion of the blame for the failure to reach agreement at Rambouillet. The negotiators, led by the United States, assumed that the Kosovo delegation would accept their proposals without reservation. Observers at the meeting report that the Contact Group did not even fully engage the Kosovars until their opposition almost caused the negotiations to completely unravel.

More importantly, the international community has ignored for years the peaceful efforts by the elected Kosovar leader, Ibrahim Rugova, to gain more rights for the majority Albanian population of Kosovo. Their frustration over the lack of international involvement has as much to do with the KLA's birth and strength as the violent actions of the Yugoslav authorities.

If the talks resume -- and it is not clear they will as fresh fighting broke out in Kosovo immediately after the Rambouillet meeting ended -- the negotiators will have to contend with a more radical and a more emboldened KLA-led Kosovo delegation.


New Internet Resource: MoJo Wire Action Atlas on US Arm Sales Now On-line

The MoJo Wire, the Internet version of Mother Jones magazine, has posted the first comprehensive, user-friendly online resource to spotlight the United States' growing dominance in the world arms trade, a trend that has accelerated under the Clinton administration.

The site is available at http://www.motherjones.com/arms

The MoJo Wire Action Atlas on U.S. Arms Sales features:


This week on America's Defense Monitor -- "America's Impact on Russia"

Show #1141

The United States and the Soviet Union were enemies.  But what do America and Russia mean to each other today?  When the USSR fell apart in 1991 there was a honeymoon in USRussia relations. But what has been the impact of America on Russia in recent years? How do Russians feel about the U.S. now? What can we learn from each other now?

Airs in Washington DC, Sunday February 28 at 10:30 a.m.
Airs in New York on Friday, March 6 on Channel 25 at 8:30 p.m.,  and on Saturday, March 7 at 7:00 a.m. on Channel 13.

Length: 30 minutes

For air dates in other cities, check your local listings.

Cost: $29
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