the per month sustaining rate from When these rates were applied to the 1,155 increase in unit tanks authorized by replacement of the M551 Armored Reconnaissance Airborne Assault Vehicle with Main Battle Tanks and run against this years force deployment sequence the required war reserve quantity was 2,169 less than the 1978 quantity.

QUESTION. It would appear that some of the AAO is based on the fact there will be losses of ships carrying tanks while in transit to Europe and for other reasons. How much of the AAO in each year and category is based on (a) ship losses, (b) battle losses, (c) losses from bombing of tank depots, and (d) other losses?

[The information follows:]

General LAWRENCE. The US war reserve portion of the AAO is developed by applying the WARF value for the tank to the number of tanks deployed. The WARF is a composite value, different for each weapon system, which depends upon the inherent vulnerability of a system, its dispersal throughout a theater of operations, deployment sequence, tactical employment doctrine, shipping losses, and logistics losses. The estimate of losses translate into the war reserve requirement portion of the tank AAO. An estimate of losses for war reserve AAO calculation by type loss, by year is indicated below:

Catastrophic destruction of tanks in a storage depot by aircraft is not considered in calculation of a WARF. Air strikes on tanks in tactical units are considered as a component of combat losses. Other losses include Guerrilla attacks, pilferage, accidents, wearout, mines, abandonment and are derived from aggregated historical loss data.

QUESTION. Current plans provide for increasing our POMCUS and war reserve stocks in Europe. Do these plans include increasing tanks in Europe? If so, would increasing the number of tanks in Europe cause a decrease in the AAO based on the fact fewer tanks will be lost in transit by sea?

General LAWRENCE. The current plans for increasing our POMCUS and war reserve stocks in Europe will increase the number of tanks in Europe. This increase will not cause a decrease in the AAO even though fewer over all tanks will be lost in transit at sea. The over all effect on the AAO of the increase in POMCUS stocks will be a growth in the required quantity of tanks that must be retained to replace anticipated combat loss. The required quantity of combat loss replacement tanks is a function of the size of and arrival timing of increments of the force in the combat theater. Increased POMCUS will allow units to arrive earlier and fight longer, thus requiring a greater quantity of combat consumption. This increase will not be significantly offset by a reduction in sea lane losses.

QUESTION. HOW much of your AAO is based on the fact that tanks damaged from battle, from air strikes, and from other sources are repaired and returned to combat status?

General LAWRENCE. The portion of the AAO that accounts for damaged tanks that are repaired and returned to combat status is found in the operational ready float that is procured for each unit to provide substitute tanks while repair of damaged, battle or other wise, takes place. This operational ready float factor is a nine percent plus up over the units required quantity and is retained for them by back up maintenance units. The WARF methodology that is used to compute combat consumption consider only equipment damaged beyond repair and non-recoverable equipment.

WAR RESERVE STOCKS FOR ALLIES

QUESTION. At one time, our war reserve stocks for allies was designed to support

Since at least FY 1973, the Army has maintained a tank AAO for our allies. The AAO for that year was 529 tanks. Please identify the countries involved at that time and the quantity of tanks for each country that totaled 529 tanks.

General LAWRENCE. Our records for 1973 are incomplete; however, it appears that the

QUESTION. Does the FMS program, the military aid program, or foreign assistance program fund the cost of the AAO for allies or is it funded from US Army appropriations?

Dr. PIERRE. The allied war reserve portion of the AAO is funded in the same manner as the US Army elements of the AAO; i.e., the Army procurement appropriations. This allied war reserve, if procured, will remain under U.S. control.

QUESTION. Will you please cite the law that requires the Army to maintain an AAO for allies, and how that AAO is to be financed?

Dr. PIERRE. The Army computes that portion of the AAO for allies based on guidance received from the Secretary of Defense. There is no law requiring the Army to maintain an AAO for allies. As previously stated that portion of the Army's AAO for which procurement is scheduled is funded from US Army appropriations.

QUESTION. The AAO for allies has been far from static. In FY 1974 the AAO was 722 tanks. It increased to 1,533 tanks in FY 1975, to 3,649 tanks in FY 1976, decreased to 1.159 tanks in FY 1977, and increased to 1,283 in FY 1978 and to 2,040 in FY 1979. Please identify each of the allied countries and the amount of tanks the Army had hoped to set aside for each of them for each of those fiscal years. [The information follows:]

Year

1974.

1975.

1976.

1977.

1978.

1979.

1 Includes 214 M41A3 tanks.

2 All M41A3 tanks.

* Special contingency stockpile (SCS): Not earmarked in advance for any specific ally.

QUESTION. The proposed Special International Security Assistance Act of 1977 transmitted by the President on October 21, 1977, if passed by Congress, would approve the transfer to South Korea of $800 million worth of certain U.S.-owned weapons without reimbursement. How many tanks would be involved in this transfer?

General LAWRENCE.

der the act.

M48A5 tanks would be transferred un

QUESTION. If we will transfer that many tanks to South Korea, why should our Allies' tank AAO increase in FY 1979 rather than decrease by that number?

General LAWRENCE. The tanks included for transfer in the proposed Special International Security Assistance Act of 1977 would be used to equip ROK forces. The tanks included in the Army's total AAO for WRSA are required as war reserves for combat consumption. The WRSA tanks would be used to replace combat losses of the ROK forces during war.

Mr. MAHON. Thank you very much for your appearance, gentlemen. Dr. PIERRE. Thank you, Mr. Chairman.

WEDNESDAY, APRIL 19, 1978.

SPECIAL INTERNATIONAL SECURITY ASSISTANCE

ACT OF 1977

WITNESSES

MORTON I. ABRAMOWITZ, DEPUTY ASSISTANT SECRETARY OF DEFENSE FOR EAST ASIA AND PACIFIC REGION AND INTERAMERICAN REGION, OFFICE OF ASSISTANT SECRETARY OF DEFENSE (ISA)

BRIG. GEN. NEAL CREIGHTON, DEPUTY DIRECTOR, OPERATIONS AND READINESS DIRECTORATE, OFFICE OF ARMY DEPUTY CHIEF OF OPERATIONS AND PLANS

BRIG. GEN. LOUIS C. WAGNER, JR., DEPUTY DIRECTOR, MATERIEL, PLANS AND PROGRAMS DIRECTORATE OFFICE, ARMY DEPUTY CHIEF OF STAFF FOR RESEARCH, DEVELOPMENT AND ACQUISITION

MAJ. GEN. RICHARD C. BOWMAN, USAF, DIRECTOR, EUROPEAN AND NATO AFFAIRS, OFFICE OF ASSISTANT SECRETARY OF DEFENSE (INTERNATIONAL SECURITY AFFAIRS)

INTRODUCTION

Mr. MAHON. The committee will come to order.

The hearing is closed this morning on account of the nature of the material that will be presented to the committee.

We have called this meeting today to explore with witnesses from the Office of the Assistant Secretary of Defense for International Security Affairs what appears to be a recent trend in using the Defense budget to implement certain programs which should be more properly funded under the Foreign Assistance Act of 1961, as amended, or the Arms Export Control Act, as amended, or handled through the Foreign Military Sales Trust Fund. I refer specifically to the proposed legislation relating to our phased withdrawal from South Korea and NATO's planned purchase of E-3A AWACS aircraft. In other words, are these two programs merely foreign aid and foreign military sales projects with a different gift wrapping?

In October 1977, the President transmitted to Congress the Special International Security Assistance Act of 1977 whereby the U.S. Army would transfer to South Korea, without reimbursement, certain military equipment having a depreciated replacement value of some $800 million. As our withdrawal from South Korea progresses over a fiveyear period, the Army will require that much of the equipment so transferred be replaced through the Army's budget, again without reimbursement.

In March 1978, the Secretary of Defense advised the Committee that it appeared that NATO would buy upwards of 18 E-3A AWACS

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