Jacob J. Lew Testimony to Senate Appropriations Committee, 04/27/1999
JACOB J. LEW
OFFICE OF MANAGEMENT AND BUDGET
U.S. SENATE APPROPRIATIONS COMMITTEE
April 27, 1999
Mr. Chairman and distinguished members of the Committee, thank you for the opportunity to
explain the Administration's request for supplemental appropriations to finance military and
humanitarian operations related to Kosovo. Since you are very familiar with the foreign and
military policy objectives of our Kosovo operations, I will restrict my comments to describing the
President's proposed supplemental funding request, its key assumptions, structure, and purpose.
Last week the President transmitted a $6.049 billion emergency supplemental appropriations
request to provide the resources necessary for the key elements of our military, humanitarian, and
diplomatic efforts. It sends a very clear message -- we will protect readiness and provide the
resources to continue current operations for as long as necessary to succeed. While this is an FY
1999 supplemental request, it does not represent either a schedule or a deadline for those
operations. The Administration's package:
Because the current situation in Kosovo was not anticipated when the FY 1999 appropriations
were enacted or when the FY 2000 budget was prepared, we have submitted this supplemental as
an emergency request. It is critical Congress act quickly to pass this emergency request to ensure
that the Departments of Defense and State and the U.S. Agency for International Development
(AID) have the proper resources to carry out their missions. In particular, we urge the Congress
to act quickly to avoid any degradation to our military readiness. We hope that Congress will act
expeditiously on this package and avoid delays brought about by consideration of extraneous
matters. Our armed forces and the humanitarian crisis in Kosovo demand nothing less. We also
urge Congress to act expeditiously on the Central American and Agriculture relief supplemental
requests without adding extraneous legislative riders or unrelated matters.
- protects the military readiness of those forces in the Balkan theater and all other U.S. forces;
- ensures our military has the full measure of resources necessary to carry out the Kosovo air
- funds the U.S. commitment to provide humanitarian relief now and respond to potential future
refugee assistance needs.
As I mentioned earlier, the overall package totals $6.049 billion and covers only the FY 1999
costs of these operations. Funding for military activities is $5.123 billion, with $3.301 billion of
that for current and projected operations in Kosovo, $698 million for munitions replenishment,
and $850 in contingent funding for a readiness and munitions reserve. It is important to note
again that U.S. forces will remain as long as necessary to accomplish their mission, and we intend
to provide full funding to support that endeavor. Also included in the total for DoD military
activities is $274 million to cover the Department's unanticipated strike and operations costs in
Southwest Asia. On the humanitarian side, the request also includes $335 million for DoD
refugee assistance, bringing DoD's total to $5.458 billion. The total for the international affairs is
$591 million. This includes $386 million for humanitarian operations, $55 million for State
Department operations and other stabilization efforts, and $150 million for securing the front-line
states. Combined, this package requests $721 million for humanitarian operations and refugee
This supplemental request is designed to meet the following objectives:
1. We must protect the military readiness of those forces in the Balkan theater and all other U.S.
forces. A chief priority of the Administration has been to ensure this supplemental fully covers
the costs of the Kosovo effort and maintains U.S. readiness. Currently, Kosovo operations are
being paid for with funds that already are in DoD's budget for normal operations and training
activities during the last three months of the fiscal year. Expedient action is needed to restore
these funds to avoid serious readiness consequences later in the year. Moreover, to ensure that we
will have sufficient stocks of critical munitions for future operations, we must begin to replace
those munitions already used and those we anticipate using during this operation. This
supplemental meets these needs. That is why we are anxious to work with Congress on a
bipartisan basis to enact this supplemental as soon as possible.
2. We must ensure our military has the full measure of resources necessary to carry out the
Kosovo air campaign for as long as necessary. To provide maximum flexibility to our military
commanders, we are requesting sufficient funding to provide the capability to continue operations
at a high pace with the currently approved forces. The supplemental request assumes that the
currently approved level of U.S. forces, including a carrier battle group, more than 600 Air Force
and Marine Corps aircraft, one Marine Expeditionary Unit, several Army helicopter battalions
and missile batteries, and other support forces are sustained in the Balkans for as long as
necessary. This supplemental would support these force levels for the remainder of FY 1999.
The requests also provide the capability for U.S. forces to maintain the air campaign at the current
rate of sorties and strikes on Yugoslavia.
3. We must fund the U.S. commitment to provide humanitarian relief now and respond to
potential future refugee assistance needs. Hundreds of thousands of refugees and internally
displaced persons from Kosovo need urgent assistance. Although there is no precise count, we
are planning on assisting through several means at least one million and possibly up to one and
one-half million refugees and internally displaced persons. The President's supplemental request
of $220 million for the Migration and Refugee Assistance (MRA) and the Emergency Refugee
and Migration Assistance (ERMA) accounts will provide the resources necessary to cover the
estimated U.S. share of the multilateral costs for one million refugees or internally displaced
persons through the end of FY 1999. The U.S. contribution shares the burden, with other
countries providing 75 percent of the required resources. The U.S. 25 percent share is consistent
with customary practice, which demonstrates a strong U.S. commitment while fostering a
multilateral burden-sharing approach. The requested funds will also permit the U.S. to help meet
its commitment to bring up to 20,000 refugees to this country to provide them a safe haven.
No one can be sanguine, however, about the final costs of helping the refugees and internally
displaced persons. We do not know the full needs of a population that we have been unable to
help directly, the displaced Kosovars in Kosovo. For the refugees outside Kosovo, there may be
other as yet unknown costs as the international community helps build temporary camps for
hundreds of thousands of people, and arranges assistance though a non-governmental and private
voluntary organizations. For that reason, our request provides the necessary funds to provide for
additional large-scale refugee outflows from Kosovo or to provide humanitarian assistance for
those Kosovo Albanians in Kosovo if conditions permit.
We are not requesting funding for long-term reconstruction activities, but we think it prudent to
anticipate the need for planning for refugee repatriation and for that reconstruction. Moreover,
our request for funds for in the Eastern Europe assistance program allows for the possibility that
we can address the most immediate costs, such as digging wells or providing shelter, associated
with the return of Kosovo refugees to their homes once we achieve a solution to the conflict.
The highlights of our funding request for military operations, humanitarian operations, diplomatic
operations, and readiness and munitions replenishment are as follows:
Military Readiness. As a first priority, this supplemental package protects military readiness
through funding levels based on robust assumptions, such as providing the capability to sustain
operations for the rest of FY 1999. In addition, we have requested contingency funding to cover
unanticipated costs that might arise during the prosecution of this action. We have worked hard
to ensure that this package would provide DoD sufficient funding to sustain military readiness
while action in Kosovo continues.
Kosovo Operations. First, this package provides $287 million to fund the estimated cost of the
initial U.S. air campaign through April 30, 1999. Also requested is funding to cover the costs of
U.S. forces' support to the Organization for Security and Cooperation in Europe operations in the
Balkans and the Kosovo Air Verification Mission, which ended shortly before the air campaign
began. Second, this package requests $3.01 billion to sustain air operations against Yugoslavia,
which will continue as long as necessary. We cannot predict when the air campaign will achieve
its desired outcome. Therefore, to provide maximum flexibility to our military commanders, we
are requesting sufficient funding that will provide us the capability to continue operations at the
current, planned levels with the currently approved forces. Funding will cover the cost of
operating aircraft and ships, deployment of assets, force protection and base activities, spare parts,
transportation, logistics services, equipment maintenance, special pay and allowances, supplies,
and other support costs for U.S. forces in the Balkans. I should stress that the supplemental
request does not provide funding for the deployment of U.S. ground forces to Kosovo.
There has been a lot of discussion concerning the monthly cost of this military operation. First,
the costs associated with Southwest Asia ($451 million, of which $274 million is for operations
and $177 million for munitions) and refugee relief ($335 million) should be removed from the
total. In the remaining $4.6 billion, our request includes nearly $500 million in one-time start-up
costs that cover deploying forces and setting up facilities in theater. The costs will be incurred in
the early part of the operation; therefore, as the operation proceeds, the actual costs per month
will decrease. Including munitions costs, discussed below, the recurring costs for the Kosovo
operation total $4.1 billion or approximately $700 million per month. This package fully funds
the Department's request for operations.
For the Kosovo operations, the Department of Defense is requesting authorization to call up
approximately 33,000 reservists. Approximately 25,000 will support Air Force strike operations,
2,000 will support Navy and Marine Corps operations and 6,000 will meet the Army's demands
for support to Task Force Hawk. We have included approximately $450 million for FY 1999 in
the supplemental for costs associated with the call-up.
Munitions Replenishment. The Administration requests $698 million to replenish and upgrade
cruise missiles and certain other types of "smart" munitions used in Kosovo and Iraq. This
request both replaces munitions used in Iraq and Kosovo to date and covers anticipated usage of
these critical weapons. It includes: $445 million to upgrade older Tomahawk missiles (including
Tomahawk Anti-Ship Missiles) to the more capable Block IIIC Tomahawk Land Attack Missile;
$178 million to convert 322 nuclear-Air Launched Cruise Missiles to Conventional Air Launched
Cruise Missiles; $35 million to accelerate Joint Direct Attack Munition (JDAM) production; and
$40 million to accelerate air-launched towed decoy production. This funding will protect
readiness by ensuring that adequate stocks of these critical munitions will be available for current
and future operations. This request will not only replenish those critical munitions already
expended, but will also increase the inventories of these munitions from when we began the
operation. For example, for JDAMs, the request funds 33 percent more units than contained in
the inventory at the start of the operation.
As we work to ensure readiness in all theaters, both now and into the future, it is imperative that
we replace certain munitions as rapidly as possible through this emergency supplemental. Of the
programs included in the supplemental, deliveries of all but Tomahawk will actually begin this
calendar year. However, we continue to maintain substantial reserves of these missiles.
Tomahawk deliveries will not begin until FY 2001, but supplemental funds will ensure that we
have an adequate and more capable inventory for future operations.
Readiness and Munitions Contingency Reserve. The Administration's proposed contingency
reserve fund will ensure readiness levels of all forces remain high while operations continue in
Kosovo and that inventories of critical munitions are adequate for future operations. The
Administration proposes that $850 million of the Department of Defense funding request be set
aside in a contingency fund to: 1) prohibit any degradation in the readiness of our forces in the
Balkans and around the world that could result from the uncertainties of conflict in Kosovo; and
2) replenish the inventories of munitions that could be used in Kosovo but have not been used to
date. Prudent planning for quickly-changing operations calls for setting aside additional funding
on a contingency basis to assure that a high level of military readiness is maintained in and
outside of Kosovo, and that the supply of munitions, an essential element of readiness, remains
sufficient for future operations.
Southwest Asia. As you know, we are still conducting operations in the Persian Gulf at higher
than anticipated rates. Therefore, a total of $274 million is requested to cover the costs of
Operation Desert Thunder and Desert Fox, as well as to fund higher-than-anticipated operating
levels in and around Iraq through the remainder of the fiscal year. Funding to replace CALCMs
and Tomahawk missiles used in Operation Desert Fox totals $177 million.
Before I conclude my discussion on funding for military operations, I want to reiterate the
necessity for rapid consideration of this package. The military will soon need to make decisions
regarding its fourth quarter training program. In order to plan effectively, DoD must know that it
has sufficient funding available to carry out those activities. Further, it is difficult to defer costs
in the fourth quarter, making it imperative that DoD have sufficient resources available
immediately to undertake all the necessary readiness activities during the fourth quarter. I
strongly urge the Congress to consider this supplemental request expeditiously to protect military
Our request includes $721 million for the humanitarian relief activities of the Departments of
State and Defense, and the AID. With this request, we believe we have fully addressed both the
critical short-term needs of the refugees and others adversely impacted by the crisis and also
begun planning for the long term humanitarian implications for the region. We have requested our
share of the multilateral effort to supply food, shelter, water and sanitation, health, and other life
sustaining elements for up to a million refugees that United Nations High Commissioner for
Refugees (UNHCR) has currently projected to result from this crisis. We are confident our
request also fully addresses the potential needs of the hundreds of thousands of people in Kosovo
who may be without shelter, and the hundreds of thousands of other Kosovars whose lives have
been tragically altered by the policies of the Milosevic government.
The Department of Defense's costs for aiding Kosovar refugees fall into three categories. First,
for the last three weeks DoD has provided $25 million in defense articles and services under the
drawdown authority signed by the President March 31. This amount has funded the provision of
humanitarian rations, tents, blankets, and other relief supplies. Our supplemental request would
replenish the operation and maintenance accounts that have been the source for these funds.
Second, DoD may contribute up to $10 million toward a NATO-led task force that is providing
refugee relief, and our request includes these funds. Finally, DoD plans to construct and operate a
temporary camp for up to 20,000 refugees, likely in Albania, and provide other assistance as
needed. Our request provides $300 million to carry out this plan.
The President is requesting $220 million for the Department of State's refugee accounts. Of this
amount, $125 million is requested for the MRA account and $95 million for the ERMA account.
The MRA funds would be used to respond to the appeals of international and non-governmental
organizations, such as the UNHCR, International Committee of the Red Cross, and the
International Organization for Migration. These appeals would fund programs providing critical
life-sustaining assistance to refugees, displaced persons, and conflict victims and support the
multilateral effort to transport Kosovar refugees to temporary refugee countries. The
supplemental ERMA funds would be used to ensure the account has sufficient funds to meet any
urgent and unforseen requirements arising from the crisis -- such as a doubling of the current
refugee outflows -- while enabling the fund to meet the need to provide front-line, lifesaving
responses to humanitarian emergencies worldwide. Moreover, we will use $40 million of ERMA
funds to provide for the Department of State's share of the costs of resettling up to 20,000
Kosovar refugees in the United States.
The President is requesting $71 million for AID's International Disaster Assistance account. Of
this amount, $68 million would fund programs providing direct humanitarian assistance to the
victims of the Kosovo crisis. A large percentage of the Kosovar refugees are not in traditional
refugee camps supported by UNHCR, but in private homes, schools and other host government
facilities, and these kinds of arrangements are likely to increase as refugee outflows continue.
The humanitarian assistance requirements for refugee communities living in these arrangements
are substantial. Working through private voluntary organizations, AID disaster assistance can
provide prompt and critical support for the affected communities, as well as continue to provide
essential assistance in specified sectors within the more traditional refugee camps. The request
would also provide $3 million to support the Federal Emergency Management Agency's role in
the U.S. response -- a 24 hour toll-free phone bank for private donations. That phone bank has
received thousands of phone calls a day.
The President is requesting $95 million to address regional requirements for the well-being, safety
and return of the Kosovar refugees. The current situation is highly uncertain, no one has a crystal
ball to predict when a settlement will be reached. We have requested these funds in the Eastern
European Assistance account, which has particularly broad authorities, to permit us to respond to
a broad number of possible requirements for the care and return of the refugee population.
Should greater resources be necessary to handle additional outflows of refugees, these funds
could be used. If there is an unexpectedly early end to the hostilities, these funds could be used
for urgent relief within Kosovo.
Diplomatic Operations and other Stabilization Efforts
The supplemental request also includes $55 million for diplomatic operations and other
stabilization efforts. These funds include $25 million to meet diplomatic and security
requirements arising from the crisis in Kosovo funded through the State Department's operating
accounts and $25 million to be funded through the Assistance to Eastern Europe and the Baltic
States account to do background checks on Kosovar police recruits, and to train these recruits for
their eventual return to Kosovo. We are also requesting $5 million for the Economic Support
Fund (ESF) to begin the difficult process of documenting alleged atrocities in Kosovo. The funds
would be used to interview refugees and prepare the necessary documentation for possible war
crimes that may have been committed in Kosovo.
Securing the Front Line States
Albania, Macedonia, Bulgaria, Bosnia, and Romania, and the Republic of Montenegro within
Yugoslavia were struggling to make the transition to democracy even before the current conflict.
These countries have suffered significant reductions in trade and investment as a result of the
conflict. They have borne the burden of the refugee exodus from Kosovo. They also are under
threat if Milosevic expands the conflict, as witnessed by border incidents such as the Serbian
shelling of a village inside Albania. The confluence of these events threaten to undermine the
political stability of these countries as they struggle to make the transition to market democracies.
Therefore, we are requesting $150 million, $100 million in ESF funds and $50 million of the
funds requested for the Eastern European Assistance account, to help increase stability in these
countries and to alleviate the disruption created by the fighting in Kosovo. It is clearly in our
national interests to help stabilize these countries and prevent both the spread of the conflict and
erosion of the hard-won progress on reforms in the region. The ESF funding will be closely
coordinated with World Bank, IMF, and other donor contributions, which will far exceed these
levels, to help maintain stability in the region. We anticipate the U.S. share of this assistance will
be around 10 percent, with the Europeans and other donors providing the lion's share of
Let me also mention other urgent supplemental priorities. The fact that we are asking the
Congress for funding to respond to an enormous emergency far away does not in any way
diminish the importance of an emergency that is very close to home. The Central American relief
package remains urgent. Every day we delay means another day the people of Central America
lose hope in their ability to rebuild their homes, earn their livelihood, and achieve a prosperous
future in their homeland.
In addition, the FY 1999 supplemental request for $100 million in assistance for Jordan is critical
to stabilizing the Jordanian economy and ensuring a smooth transition of leadership. Jordan is a
key to the Middle East Peace process and the implementation of the Wye River memorandum,
and our continued strong support for Jordan will help to achieve the goal of peace in the Middle
East that we all share. Also of critical importance is our request for agricultural relief to our
farmers that both the House and Senate have included in the supplemental appropriations bill. I
urge the Committee to act quickly to enact these emergency packages expeditiously.
Despite months of allied diplomatic efforts to achieve a balanced peace plan, the government of
Slobodan Milosevic defied the international community and pursued a course of repression and
terror against the people of Kosovo. We determined that we could not allow these actions to go
unchallenged. Now, we have a responsibility to our country and to the men and woman serving
our country in the Balkans and to address the humanitarian crisis provoked by the Milosevic
government. We have provided you with our best estimate of the resources required to achieve
our goals in Kosovo. We ask the Congress to act quickly upon this request and send a clear
message to Milosevic - his actions will not be tolerated and that we are prepared to back our
words with action.
Thank you. I am prepared to answer questions that you may have.