DOC. Y 1.1/3: 102-32 UNIVERSITY of ILLINOIS LIBRARY r JRBANA CHAMPAIGN OAK STREET LIBRARY FACILITY 3 TDS SUMMARY OF RECOMMENDATIONS OF THE SENATE REPUBLICAN TASK FORCE ON ADJUSTING THE DEFENSE BASE JUNE 25, 1992 The formation of the Senate Republican Task Force on Adjusting the Defense Base was announced on April 16, 1992 by Senate Republican Leader Robert Dole. Senator Warren Rudman was named as Chairman of the Task Force. Other members appointed to the Task Force were Senator Hank Brown, Senator William Cohen, Senator John Danforth, Senator Pete Domenici, Senator Orrin Hatch, Senator Nancy Kassebaum, Senator Trent Lott, Senator Richard Lugar, Senator John McCain, Senator John Seymour, Senator Ted Stevens, and Senator John Warner. The Task Force has addressed the problems associated with the downsizing of America's defense system on three levels: helping individual workers, assisting impacted communities, and retaining and diversifying the defense industrial base. In developing these recommendations, the Task Force reached a number of important conclusions. o A sound economy and sustained economic growth is the only force that can ensure that defense reductions can be undertaken with a minimum of dislocation. Even the best defense conversion package will be a poor substitute for efforts that bring the federal deficit under control, for tax policies which spur investment and technological development, and for controlling government spending. o Clearly, ongoing and future defense budget reductions are necessary and desirable in light of the collapse of the Soviet Union and the new international scene. These cuts, however, must be undertaken in a phased and measured fashion. Precipitous, rapid cuts risk repetition of the mistakes made following the Vietnam War which led to the hollow military of the 1970's, and will cause needless disruption and harm to millions of Americans. o The argument made in some circles, that the defense cuts make possible a peace dividend to be used for domestic programs, ignores budgetary reality. The fact is that current and projected increases in domestic spending far exceed the savings flowing from any defense spending plan proposed in Congress to date, or likely to be proposed in the future. In short, the substantial peace dividend already realized and coming in the next few years has already been taken, and spent. 2 o The cost of programs directly responding to problems resulting from the declining defense budget -- e.g., transitional assistance and job training for military personnel being separated -- should be paid for out of the defense budget. Beyond this, the defense budget should only be used to fund programs which have a defense application and enhance our defense capability. Programs whose primary purpose is to strengthen the economy should be counted against the domestic budget. HELPING INDIVIDUALS WHO LOSE DEFENSE-RELATED JOBS . A. MILITARY PERSONNEL. Benefits for Departing Servicemen and Women . o Supports the Voluntary Separation Incentive (VSI) and Special Separation Benefit (SSB), which are designed to encourage voluntary separations and address the differing needs of departing servicemen. o Recommends legislation to authorize DOD to conduct Selective Early Retirement Boards (SERB) as a balanced approach to the officer force reductions for those with at least 15 but less than 20 years of e]igible service. Officers who would be eligible for this SERB would be those in the 15 to 20 year window of service who have not yet been selected for at least the paygrade of 0-5 (i.e., Lt. Colonel, Navy Commander). o With respect to reservists, the Task Force recommends the enactment of legislation to provide a transitional safety net of benefits to those who are forced to leave the Selected Reserve if the down-sizing recommended by DOD is approved by Congress. Finding Productive Work for Departing Servicemen and Women . o Recommends that Congress adopt legislation to encourage states to adopt alternative teacher certification programs for separated and retiring servicemen whose college education enables them to become qualified teachers. o Supports an expansion of the DOD program to pay for coursework to departing servicemen which meet reasonable state certification requirements. The Department of Education should identify those states with acceptable alternative certification programs, and assist in the replication of university/school district partnerships which have been successful in recruiting minority teachers for needy urban school districts. Digitized by the Internet Archive in 2019 with funding from University of Illinois Urbana-Champaign Alternates https://archive.org/details/summaryofrecommeOOunit 3 o Recommends the development of programs which enable veterans to apply their experience and military discipline training to community related services, such as establishing training centers, military style boot camps, or summer educational programs for disadvantaged youth. These programs could be operated with support from the ousiness community and out of federal job programs and funds. The Task Force believes that two temporary steps should be taken to improve the value of the current G.I. Bill during the down-sizing of the Armed Forces. o First, for the next three years, servicemen separating voluntarily should be authorized to purchase eligibility for G.I. Bill education benefits. This would permit voluntary separatees to purchase $12,600 in benefits (based on a $300 monthly benefit) for $1,200. o Second,- the monthly G.I. Bill education benefit should be increased for servicemen departing during this down-sizing to $l 5Q0 per month from the regularly authorized level of $300. (Benefit levels are now temporarily at $250 per month, with the funds coming from the Gulf War account.) o Recommends that funding levels for the highly successful Transition Assistance Program be increased through J. 995 to ensure that ali members of the Armed Forces have the opportunity to receive counseling and private sector employment skills. B. CIVILIAN DEFENSE EMPLOYEES. o o c Supports making funds available to fund the transition benefits available to federal civilian employees forced to leave federal service, including severance pay. lump sum payment for unused annual leave (or use of such leave to establish retirement eligibility),, right, to purchase additional health ccverear, and the insurance to an individual policy. i. z to cc ?rt if e Supports job swap programs and new initial, relocation costs of DOD civilian employee;; federal job in a different location. ives to pay n L to i n i T: g another Strongly supports the President authorize early retirement for employees. The Task Force be.; i waivers should be liberally gra selected locations and occupaui r s May 26, 1992 decision to eligible OCX civilian eves that early retirement r. ted for DOD e in*; aos in Ci\s.. Supports extending the one day period granted to DOD civilian employee to decide 'whether to accept offered under the Priority Placement Vxogc3m no a an eligible a job period of three days. o 4 C. PRIVATE SECTOR WORKERS AND JOB TRAINING PROGRAM IMPROVEMENTS. Pursuant to the Defense Conversion Act (DCA), Congress appropriated $150 million in FY 1990 funds (available through the end of FY 1993) to be used by the Department of Labor for job training and placement assistance under the Economic Dislocation and Worker Adjustment Assistance (EDWAA) for workers losing defense-related employment. Because of delays in the Labor Department's receipt of the $150 million, only $17 million of this amount has been spent as of mid-April. However, the Labor Department also spent $38 million of its discretionary funds on assisting defense-dislocated workers, bringing the total amount spent to $55 million. o Recommends legislation to extend the availability of the remaining FY 1990 DCA funds through FY 1997. o Recommends that the Appropriations Committee closely monitor the Labor Department's progress in disbursing these funds, and make any necessary additional funds available on a timely basis. o Recommends that DCA funds be used to reimburse states for rapid response services if the states have depleted the funds available for this purpose. o Recommends that the Department of Defense be required to provide the Labor Department and affected states with information regarding upcoming contract and program terminations which will result in layoffs. Similarly, state job training program managers should be required to seek similar information from defense contractors. o Urges DOD to take steps to immediately comply with existing legislation calling for improved reporting on the defense industrial base, to assist in the development of appropriate policies for worker assistance and maintaining our industrial base. o Recommends that the Labor Department use the authorized 10 percent set-aside from DCA funds to make demonstration project grants. In particular, the Labor Department should give favorable consideration to applications for in-house re-training by defense firms who are seeking to diversify into the commercial market. o Calls upon the state and local program managers, as well as the responsible Labor Department officials, to review the adequacy of the services being provided to defense-dislocated workers and make such adjustments as are necessary. . 5 o Supports legislation to permit job training and placement assistance to be extended to workers at closing military installations up to six months prior to their closing, rather than only 60 days prior to closing. ASSISTING IMPACTED COMMUNITIES. Redevelopment Planning . The closing of a military base or major defense plant(s) can be a serious blow for the affected community or region, especially for those localities which are heavily dependent on the base or plant in question. The Task Force strongly believes that redevelopment planning is best accomplished if the process is driven by the affected communities, and their state or local governments. o Supports the efforts of DOD's Office of Economic Adjustment (OEA) to assist state and local governments in planning for _redevelopment by providing planning grants and technical assistance to the duly constituted redevelopment authority, as determined by state or local law. o Believes that, as the pace of base and plant closings accelerates in the next few years, an increase in funding for OEA will be necessary, and supports such an increase with the exact amount to be determined through the regular, annual appropriations process. Economic Development Grants . The federal government can also assist affected communities by providing them with economic development grants. To this end. Congress provided $50 million in FY 1990 (available through the end of FY 1993) to be distributed on a grant application basis by the Economic Development Administration (EDA) of the Department of Commerce. Unfortunately, delays in transferring the funds to EDA and issuing regulations governing their use have meant that only three grants were awarded as of mid-April. o Recommends legislation to extend the availability of these funds through FY 1997. o Supports providing additional funds for EDA grants for defense-impacted communities at the time such additional funds are needed. o Recommends legislation or administrative action to require that EDA take steps to expedite the excessively long grant approval process, which now takes an average of nine months. 6 Hazardous Waste on Closing Military Bases and Installations . The Task Force believes that cleaning up hazardous waste sites is a high priority, especially at closing installations where they interfere with redevelopment, and supports the appropriation of such funds as are necessary to achieve this end. Identifying the precise nature of and resolving the hazardous waste problem at a given installation can, however, take years. Redevelopment cannot be delayed while this process is underway. Congress can three steps to facilitate redevelopment: o Recommends that federal law be amended to clarify that DOD has the authority to parcel bases and transfer uncontaminated tracts on an expeditious base. o Supports legislation to authorize DOD to convey contaminated parcels to willing parties where there is minimal risk to public health and DOD agrees to fulfill its statutory responsibility to complete the clean-up, and DOD is legally guaranteed the access it requires for remedial activities. o Recommends legislation to authorize DOD to indemnify the parties to whom land is transferred, either by lease or title conveyance, for the future costs arising from DOD-generated hazardous waste. Clearly, however, decisions to indemnify must be made on a case-by-case basis and be contingent on the parties agreeing not to take actions which would increase federal clean-up costs. Impact Aid for Education . o Supports funding of the Impact Aid section 3(e) program which authorizes transitional assistance to local school systems affected by a major decline in student population due to a closing military base or other reduction in the federal presence in an area. Federal Re-Use of a Closing Military Base . o Endorses the creative re-use of closing military bases by the federal government. For example, some Members have proposed locating prisons or military-style boot camps at closing bases. o Urges that federal agencies which must relocate a facility be required to examine the closing bases to determine their suitability to host that facility, and give preference to locating the facility at the closing base. o Recommends that DOD, as a general practice, refuse to transfer a closing base or portions thereof to another federal agency for use where such transfer is opposed by the affected state and local communities. ' 7 o Recommends amending the Base Closure Act to provide for low and no-cost transfer of surplus base land to the state or local community even where the property in question will be used for commercial purposes. This will assist the states in attracting new businesses and other users to the base. Health Care for Retired Servicemen . Currently, retired military personnel are eligible to receive health care coverage through the CHAMPUS program and at existing military hospitals and health care facilities. As many retired personnel live near bases that are closing, their access to health care is going to be negatively impacted. o Recommends that DOD reform the military medical system so as to ensure continued military medical readiness and access to care for all who are currently eligible for care. The Task Force believes that such reform can be undertaken in a cost-effective manner which does not add to the cost of the program. o Recommends that DOD and the Veterans' Administration should examine, with respect to each DOD health care facility slated for closure, whether such facility should be turned over to the VA to be operated for the benefit of both military retirees and veterans eligible for VA health care. Under such an arrangement, the VA would be reimbursed for the cost of care provided to military retirees. INDUSTRIAL CONVERSION/RETAINING AN INDUSTRIAL BASE . A. DIVERSIFYING OUR DEFENSE PRODUCTION BASE There are several affordable and cost-effective measures Congress and the President can take which will help retain needed elements of the defense production base. DOD Recoupment Policy . o Supports the elimination of the DOD recoupment policy in cases, primarily relating to commercial products, where it is not required by statute. In light of the Administration's recent request for repeal of the Arms Export Control Act provision requiring recoupment for foreign military sales of major defense equipment, the Task Force urges the congressional committees with jurisdiction to work with the Administration for a mutually agreeable legislative resolution of this policy. 8 Procurement Reform . Existing DOD procurement policies, many of which have been mandated by Congress, were adopted with the goal of establishing public confidence in the acquisition process by ensuring that weapons systems met necessary performance criteria, ensuring fair competition in bidding for contractors, and protecting against fraud by defense contractors. One result has been to force companies to segregate their defense and non-defense operations, making it more difficult for the defense divisions to now move into commercial markets. In addition, some companies have refused to participate in the defense market or to make privately- developed technological breakthroughs available to DOD. These myriad rules, regulations, and specifications have become so detailed that their cost effectiveness is in serious doubt, particularly in the upcoming era of smaller defense procurement budgets. Accordingly, a total rethinking of existing DOD procurement policies are now in order. The Task Force believes that a number of steps must be given serious consideration for future defense procurement to be possible with a reasonable level of efficiency. o DOD needs to seriously emphasize off-the-shelf procurement for its purchases. Many of the goods purchased by DOD have widespread commercial uses and are readily available. o Where military specifications for products are necessary, DOD should demand performance standards and permit potential contractors flexibility in determining how to meet those standards. o DOD standards in accounting and record keeping should be revised so as to permit contractors to integrate their cost accounting systems with the systems employed in the commercial world. Legislative changes will be necessary to fully accomplish this. The Task Force believes that defense procurement reform should be a high priority for Congress and the Administration in 1993. In addition, DOD must be much more rigorous in streamlining those administrative and regulatory requirements that are not driven by statute. Stabilizing the Procurement Market . Congress should place greater emphasis on multi-year procurement decisions in order to stabilize the production of particular weapons systems, thereby permitting more efficient resource allocation with resultant savings to the taxpayers. Both Congress and the Administration need to change their focus on new programs away from initial costs towards life-cycle 9 costs, make realistic decisions, and stick with them. No multi-year procurement emphasis can be successful unless this change in mind-set to addressing weapons development and procurement is successful. Dual-Use Technology Research and Development . o Believes that increased funds should be devoted to the development of so-called dual-use technologies -- i.e., technologies that have applications both for defense and commercial markets -- by entering into partnerships with the private sector. In order for these projects to be effective, there should be a requirement that half the funding be provided by non-federal participants. POD and DOE Laboratories. By permitting the national laboratories to engage in more dual-use efforts and cooperating more closely with the private sector, immediate contributions can be made to our economic prowess;_in a variety of areas. In 1990, the Congress provided a structure for such joint research and the transfer of commercially useful technologies from the labs to the private sector. o Supports the Administration proposal to provide additional funds to the DOE laboratories to expand commercial use of dual-use technologies developed in these labs, and believes that similar steps should be undertaken with respect to the DOD laboratories. Foreign Military Sales . o Recommends that loan guarantees for government-to-government and commercial sales of defense products should be provided to our closest allies. Hampered by a lack of guarantees, U.S. defense products -- even though renowned for their technological superiority -- are becoming increasingly less competitive on the international market. Our NATO allies, Japan, Australia, and Israel should be among the countries considered for such a program. o Urges the U.S. to begin to give special consj.deration to approving an overseas arms sales when there is foreign competition for provision of the types of weapons in question. Special consideration should also be given to a sale which would extend the operation of a product line, particularly when that extension bridges a gap until either the U.S. or another ally requires such arms. B. RETAINING OUR INDUSTRIAL BASE. Retaining and improving the competitiveness of the American industrial and manufacturing base must be a critical goal of both public and private policy over the next few years. While many 10 American companies have improved their productivity and competitiveness in recent years, and while the export of American goods has increased, the importance of manufacturing industries in the economy has continued to decline. The full range of policies that the U.S. government can adopt to strengthen our manufacturing base is beyond the scope of this Task Force's jurisdiction, and the recommendations listed below are not intended to be all-inclusive. Instead, the Task Force has confined itself to particular domestic policy proposals that will help our industrial base and at the same time be of some assistance to the individuals and companies that have been producing defense products. Small Business Innovation and Research (SBIR^ . To facilitate the role of small businesses in job creation and technology development, Congress in 1982 enacted SBIR, requiring that 1.25 percent of the research budgets of the largest federal research agencies be awarded in grants to businesses with fewer than 500 employees. o Recommends legislation to reauthorize the SBIR program and increase the set-aside from 1.25 percent to 2.5 percent. In addition, consideration should be given to increasing the maximum amount of the Phase I and II awards. Aerospace Programs . The Task Force believes that the important programs of the National Aeronautics and Space Administration (NASA) need to be adequately funded. Four programs, for which President Bush has recommended significant increases, deserve particular mention. o Space Station Freedom. o NASA's Aeronautics Research and Technology programs. o NASA's Commercial Programs, including increased funding for the 16 Centers for the Commercial Development of Space. o NASA's space technology programs. R&E Tax Credit/ Educational Assistance Tax Deduction . The R&E tax credit provides a tax credit to businesses for their research and experimentation expendituresThis tax credit has been critical to maintaining the worldwide lead of American industry in advanced technologies. The Employer-provided Educational Assistance tax deduction permits companies to deduct from their income educational assistance provided to their employees for upgrading their skills and training. 11 o Recommends that both of these provisions be made a permanent part of the tax code or, at the very least, be extended for a period of five years to encompass the period of the defense build-down. A permanent or lengthy extension is desirable since it would bring some stability to this area of the tax code and facilitate long-range planning by businesses. NIST Programs . o Supports two programs of the National Institute of Standard and Technology (NIST) as important to the effort to promote technology transfer to allow defense industries to convert to civilian activities. These programs are the Manufacturing Technology Program (MTC) and the Advanced Technology Program (ATP). President Bush requested budget increases in both of these programs for FY 1993. Manufacturing Technology Programs . o Supports increasing funding for the manufacturing technology (MANTECH) programs in DOD above the $138 million requested for FY 1993. As the new acquisition strategy places greater emphasis on research and development at the expense of production, defense firms can be expected to invest less in technologies to improve their manufacturing process. For such an investment to be effective, MANTECH funds should be expended on projects selected competitively on the basis of merit. Manufacturing Education . The Task Force supports a continuation of the program authorizing $25 million to fully fund DOD participation in ten existing or new university programs for manufacturing engineering education because it is an effective means of significantly increasing the number of well-trained, fully-qualified engineers, managers, and teachers entering and supporting the manufacturing workforce. The benefits will accrue to the defense as well as the commercial industrial base. Environmental Research and Education . The Task Force recommends that legislation be enacted that will establish programs at universities in the United States in the environmental sciences for men and women with prior training in hazardous waste management and radioactive materials through the Departments of Energy and Defense to create a cadre of environmental scientists, technicians, and engineers. This will not only provide additional, needed professionals in this area, but will help provide productive employment for those individuals now working on the U.S. nuclear weapons programs. ,