oversight

Plan to Address Changing East-West Security and Economic Relationships

Published by the Government Accountability Office on 1990-07-01.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

            United   States   General   Accounting   Office
            National Security and International
GAO         Affairs Division



July I990
            Plan to Address
            Changing East-West
            Security and
            Economic
            Relationships
Foreword


           The collapse of the Warsaw Pact, continuing polit-
           ical and economic reforms in the Soviet Union, and
           rapid movement toward a unified Germany offer
           opportunities for improved East-West relations and
           for reduced defense expenditures. At the same time,
           the uncertainties created by such rapid changes
           pose enormous challenges for US, policymakers.
           Pentagon planners must restructure defense forces
           without a clear definition of future security threats.
           Arms control negotiators must grapple with how a
           united Germany will fit into the security equation.
           U.S. diplomats must decide how they can best pre-
           serve NATO'S role in European security amid calls for
           broader forums to assume key roles. Policymakers
           must weigh the benefits and risks of increased eco-
           nomic cooperation with nations beset by serious
           economic difficulties and attempting the uncharted
           transition from centrally planned to market
           economies.

           While uncertainties remain, continuing domestic
           budgetary pressures make clear the direction of the
           changes. U.S. troop withdrawals from Europe will
           require adjustments both here and abroad to logis-
           tical support, defense facilities, and major items of
           equipment. Difficult choices must be made that will
           affect the future of thousands of military and
           civilian personnel, local economies both in the
           United States and Europe, and the defense indus-
           trial base. NAXJ’S security strategy will be altered
           and with it the U.S. role and commitments. Conven-
           tional and strategic arms control agreements will
           change the military balance and offer opportunities
           to revise military strategies and plans for weapons
           acquisitions. New East-West trade opportunities
           will lead U.S. business to enter these newly liberal-
           ized markets. The United States must weigh how it
           can best advance U.S. economic interests in ways
           that will also serve U.S. security and political
           interests.

           How well the United States plans for and manages
           the required adjustments during this transitional


           i
    Foreword




-
    period will in large measure determine the strength
    of U.S. defense posture and the U.S. standing in the
    world economy well into the next century. Accord-
    ingly, we have developed this plan to guide us in
    addressing the key issues related to changing East-
    West relations. It is our goal that this body of work
    will assist U.S. executive branch policymakers, gov-
    ernment administrators, and legislators in the deci-
    sions they face in adjusting U.S. programs and
    policies to the new security, political, and economic
    environment.




    Frank C. Conahan
    Assistant Comptroller General




    ii
contents



A. Planning and
   Managing
   Force
   Restructuring
B. Impacts of
   Force
   Restructuring
C. Arms Control                                                   6
   and the
   Changing
   U.S. Role in
   NATO
D. Future
   Economic
   Relations



                   Abbreviations

                   CFE      Conventional Armed Forces in Europe
                   DOD      Department of Defense
                   EC       European Community
                   FY       Fiscal Year
                   GAO      General Accounting Office
                   INF      Intermediate-Range Nuclear Forces
                   JCS      Joint Chiefs of Staff
                   NATO     North Atlantic Treaty Organization
                   ROTC     Reserve Officer Training Corps
                   SSN      submarine (nuclear propulsion)
                   START    Strategic Arms Reduction Talks

                   . ..
                   Lu
A Planning and   Sound planning for force restructuring will be
                 essential if readiness and force quality are to be
Managing Force   preserved during this turbulent period. DOD plan-
Restructuring    ning is complicated by a still evolving definition of
                 the threat, ongoing arms control negotiations, and
                 budgetary pressures that may force deeper cuts in
                 defense spending. Budgetary savings will accrue
                 from troop reductions in Europe but only if forces
                 are removed from the force structure. We plan to
                 monitor DOD'S evolving plans and report as neces-
                 sary on the reasonablenessof criteria used in major
                 force restructuring decisions as well as the effi-
                 ciency and effectiveness of planned changes. As
                 part of this monitoring effort we will conduct the
                 following evaluations and assessments:

                 1. Evaluate DOD, .JCs, and service planning for force
                 restructuring (KS-ongoing; services-1st qtr. FY 91).

                 2. Identify lessons learned from past force restruc-
                 turing that could be applied to current restructuring
                 efforts (ongoing-Army only).

                 3. Evaluate alternative phasing of Army troop
                 withdrawals from Europe (4th qtr. FY 90).

                 4. Conduct case studies of the plans and anticipated
                 impacts of selected overseas force reductions (Air
                 Force; 4th qtr. FY 90).

                 5. Assess Army plans for establishing accounta-
                 bility and controls over its resources as it reduces
                 its forces in Europe (ongoing).

                 6. Evaluate DOD plans for returning people and
                 equipment to the United States (non-wide; 2nd qtr.
                 FY 91).

                 7. Assess the adequacy of DOD processes for deter-
                 mining the cost-effectiveness of returning overseas
                 materiel to the United States (4th qtr. FY 90).



                 Page   1
8. Assess the adequacy of DOD plans for identifying,
sorting, handling, and reallocating or disposing of
the large amount of materiel to be returned from
Europe (4th qtr. FY 90).

9. Evaluate the need for continued shipment of new
weapon systems to Europe in view of ongoing con-
ventional arms reduction negotiations (ongoing>.

10. Assess DOD plans to relocate the Air Force 401st
Tactical Fighter Wing (ongoing).

11, Assess potential force structure savings by
reducing combat intelligence personnel in Europe
(2nd qtr. FY 91).

12. Assess the adequacy of the enlisted force man-
agement program in managing manpower reduc-
tions and the potential need for additional tools
(ongoing; follow-on review-4th qtr. FY 90).

13. Comment on proposed legislation that would
provide incentives to DOD employees to retire early
if affected by a reduction in force (ongoing).

14. Identify ways to minimize the negative effects
of force reductions on women and minorities (4th
qtr. FY 90).

15. Assess DOD measures to minimize the negative
impact of force reductions on dependents (1 st qtr.
FY 91).

16. Evaluate programs to assist DOD civilian
employees involuntarily separated due to force
reductions (2nd qtr. FY 91).

17. Identify the need for changes in officer acces-
sion programs (academies, ROTC, etc.) and the
Defense Officer Personnel Management Act due to
anticipated reductions in the size of the officer
corps (ongoing; other reviews-2nd qtr. FY 91).


Page   2
                18. Assess the potential for consolidation of per-
                sonnel support activities in Europe (3rd qtr. FY 91).


                We have planned the following work to address the
B. Impacts of   impacts of force restructuring on logistics, facilities,
Force           and equipment, as well as key DOD strategies and
Restructuring   the roles of various elements of the force structure.


Logistics       The shift of troops and equipment to the United
                States will alter deployment plans and require a
                reexamination of logistical support and strategic air
                and sealift requirements. We intend to conduct the
                following assessments:

                1. Identify the impacts of restructuring on logistical
                support requirements (ongoing).

                2. Assess the need for prepositioned materiel and
                war reserve stocks in view of the changing security
                environment (4th qtr. FY 90).

                3. Assess the potential for reducing national stock-
                piles (non-wide; 1st qtr. FY 91).

                4. Evaluate the impact of restructuring on air/
                sealift requirements (ongoing).


Facilities      Proposals for U.S. and overseas base closures will
                force difficult decisions affecting local economies
                and altering plans for military construction and
                land acquisition. Closing bases will result in long-
                term savings but will entail costs in the short term.
                To address these issues, we have planned the fol-
                lowing evaluations:

                5. Evaluate DODprocesses and criteria for deter-
                mining domestic and overseas base closures and
                reductions (ongoing).



                Page   3
                     6. Identify lessons learned from past domestic and
                     overseas base closures applicable to future closures
                     (1st qtr. FY 91).

                     7. Evaluate DODprograms for providing economic
                     assistance to communities affected by base closures
                     (2nd qtr. FY 91).

                     8. Identify 1J.S.financial obligations to host nations
                     resulting from European base closures (DOD-wide;
                     ongoing).

                     9. Identify the anticipated impacts of overseas force
                     reductions on military bases in the United States
                     (DOD-wide;4th qtr. FY 90).

                     10. Assess the adequacy of DOD processes for deter-
                     mining the cost-effectiveness of returning overseas
                     materiel to the United States (4th qtr. FY 90).

                     11. Identify issues and costs involved in environ-
                     mental clean-up of bases due for closure (1st qtr.
                     FY 91).

                     12. Evaluate Army plans to acquire land for
                     training purposes (ongoing).

                     13. Assess strategic home-porting requirements
                     given changing force structure plans (ongoing).


Weapons,             Budgetary pressures will intensify debate over the
Equipment, and the   future of key DODweapons acquisition programs
                     and force modernization plans. These decisions will
Defense Industrial   have major impacts on the US. defense industrial
Base                 base. To address these issues, we will conduct the
                     following assessments:

                     14. Assess the status of and requirements for
                     selected major weapon acquisitions (Dobwide;
                     continuing).



                     Page   4
                       15. Summarize data on economic production rates
                       and production backlogs of major weapon systems
                       to better understand the impact of equipment
                       reductions (non-wide; ongoing).

                       16. Evaluate processes for revising industrial
                       preparedness plans and US. options for easing
                       adjustments of defense industries as forces are
                       reduced (noBwide; 4th qtr. FY 90).

                       17. Assess the potential for reducing airborne sur-
                       veillance units in Europe (3rd qtr. FY 91).


Strategy, Roles, and   Anticipated major arms control agreements will
Missions               require DOD to reassess some of its basic military
                       strategies, including the future role of reserve
                       forces, forward deployment, prepositioned equip-
                       ment, and training exercises in Europe. Major deci-
                       sions on naval force structure will be needed as
                       land forces are withdrawn from Europe. Restruc-
                       turing may significantly alter the way reserve
                       forces are employed, trained, and equipped. To
                       address these issues, we have planned the following
                       assignments.

                       18. Assess how planned force restructuring will
                       impact the role of reserve forces (Navy-ongoing;
                       Army-1st qtr. FY 91; Manpower-2nd qtr. FY 91).

                       19. Compare selected countries’ use of reserve
                       forces to determine whether certain features might
                       be considered in U.S. force restructuring (ongoing).

                       20. Evaluate the respective roles of Marines, special
                       operations forces, and Army light forces to identify
                       possible overlaps (ongoing).

                       21. Assess the rationale for continuation of the
                       Follow-On Forces Attack concept (4th qtr. FY 90).

                       22* Assess the strategy of forward naval deploy-
                       ments (2nd qtr. FY 91).

                       Page6
                    23. Assess the potential for decommissioning battle-
                    ships (ongoing).

                    24. Assess the changing submarine threat on the SSN
                    force level (requirements and high/low mix)
                    (ongoing).

                    25. Identify the role, contribution, and cost of car-
                    rier battle groups to assist future decisions on force
                    structure (ongoing).

                    26. Assess the future of training and participation
                    in exercises in Europe (Army-ongoing; Air Force-1st
                    qtr. FY 91).

                    27. Assess the potential effects of European Eco-
                    nomic Integration (~~-1992) on defense industrial
                    cooperation (ongoing).


C. Arms Control     As movement continues toward limits on conven-
                    tional, strategic, and chemical weapons, the focus
and the Changing    will shift to implementation and verification of
U.S. Role in NATO   agreements. Costs as well as benefits will accrue
                    from these accords. As political restructuring pro-
                    ceeds in Europe, the role of NATO will be redefined
                    and, along with it, adjustments to the U.S. role and
                    its security commitments. Other ITS. concerns will
                    include the prospects for increased burden sharing
                    by the NAXI allies and the possible redistribution of
                    U.S. equipment among them. To address these
                    issues, we will conduct the following evaluations:

                    1. Assess operations of the On-Site Inspection
                    Agency under the Intermediate-Range Nuclear
                    Forces Treaty (INF) to identify lessons learned on
                    verification of arms control agreements (ongoing).

                    2. Identify key issues associated with equipment
                    destruction, transfer, and modernization under the
                    expected Conventional Armed Forces in Europe
                    (CFE)agreement (2nd qtr. FY 91).


                    Page   6
            3. Examine procedures, costs, and burden-sharing
            issues associated with verification of the CFE treaty
            (start after agreement is signed).

            4. Assess proposed changes to ongoing and planned
            projects under the NATD infrastructure program,
            including CFE implementation costs (ongoing).

            5. Assess the impacts of START on the size of the Tri-
            dent II fleet, procurement of submarines and mis-
            siles, and operation of naval facilities (1st qtr.
            FY 91).

            6. Assess the impact of START on requirements for
            nuclear materials (1st qtr. FY 91).

            7. Assess the potential for applying lessons learned
            from the use of a Special Verification Commission
            under INF to future arms control agreements (1st
            qtr. FY 91).

            8. Determine U.S. government and private industry
            roles in monitoring activities related to 13 ongoing
            arms control negotiations and what is being done to
            ensure the capability to verify prospective agree-
            ments (4th qtr. FY 90).

            9. Identify key issues related to the political
            restructuring of Europe and its impact on the U.S.
            role in NATO (4th qtr. FY 90).

            10. Assess the future willingness of NATU allies to
            shoulder future defense burdens (1st qtr. FY 91).


D. Future   Opportunities for increased trade and economic
            relations with the Soviet Union and Eastern Europe
Economic    will be accompanied by certain risks. These include
Relations   the export of sensitive technologies and the
            assumption of financial risks by government finan-
            cial institutions such as Export-Import Bank, the
            Overseas Private Investment Corporation, and the
            Department of Agriculture. Questions will surface

            Page   7
over whether U.S. trade and export promotion poli-
cies will permit the United States to fairly compete
with other industrialized nations for new markets.
Congress will also be interested in how the United
States is assisting economic reform and the democ-
ratization process in Eastern Europe through the
various foreign policy and economic assistance tools
available to policymakers. To address these issues,
we plan to conduct the following evaluations:

1, Evaluate the basis and accuracy of existing
analyses on the state of the Soviet economy
(ongoing).
2. Assess the key issues related to the U.S.-Soviet
trade agreement (ongoing).

3. Evaluate Soviet agricultural reform efforts and
the impact on U.S. interests (ongoing).

4. Assess U.S. interests in developing Soviet oil and
gas resources (4th qtr. FY 90).

5. Assess U.S. program assistance to Central and
Eastern Europe (ongoing).

6. Identify key issues related to potential export
control mechanisms (4th qtr. FY 90).

7. Assess emerging East-West financial issues
(ongoing).

8. Compare U.S., European Community, and Japa-
nese economic and trade policies toward Eastern
Europe and the impacts on U.S. economic interests
(2nd qtr. FY 91).

9. Evaluate State Department planning for
increased operations in Eastern Europe (4th qtr.
FY 90).




Page   8
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