Future Years Defense Program:

1996 Program Is Considerably Different From the 1995 Program

NSIAD-95-213: Published: Sep 15, 1995. Publicly Released: Sep 15, 1995.

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Pursuant to a congressional request, GAO compared the Department of Defense's (DOD) fiscal year (FY) 1996 Future Years Defense Program (FYDP) with its FY 1995 FYDP, focusing on: (1) what major program adjustments DOD made from FY 1995 to FY 1996; (2) the implications of these changes for the future; and (3) whether the FY 1996 FYDP complies with statutory requirements.

GAO found that: (1) the FY 1996 FYDP, which covers FYs 1996-2001, is considerably different from the 1995 FYDP, which covers FYs 1995-99; (2) the total program increased by about $12.6 billion in the 4 common years of both plans (FYs 1996-99); (3) approximately $27 billion in planned weapon system modernization programs for these 4 years have been eliminated, reduced, or deferred to the year 2000 and beyond; (4) the military personnel, operation and maintenance, and family housing accounts increased by over $21 billion during the common period and continue to increase to 2001 to support Defense's emphasis on readiness and quality-of-life programs; (5) the net effect is a more costly defense program, despite substantial reductions in DOD's weapon modernization programs between 1996 and 1999; (6) Defense plans to compensate for the decline in procurement during the early years of the 1996 FYDP by substantially increasing procurement funding in 2000 and 2001; (7) the Secretary of Defense plans to pay for the increased future modernization with a combination of savings from infrastructure reductions and acquisition reforms and from real budget growth; (8) GAO's analysis shows that the 1996 FYDP does not reflect reduced infrastructure costs, primarily because of funding increases for base operation and management headquarters functions and quality-of-life programs; however, the Concurrent Resolution on the Budget for Fiscal Year 1996 includes over $24 billion more for Defense than requested in the President's budget for FYs 1996-2001; (9) the additional budget amounts are expected, in part, to lessen the need for Defense to reduce or defer weapon modernization programs to meet other near-term readiness requirements; (10) assuming the funds are appropriated, Congress will specify how Defense is to spend some of the added funds; however, DOD may have an opportunity to restore some programs that were reduced or deferred to 2000 and beyond; and (11) the additional near-term funding could mitigate the need for DOD to increase out-year budgets.

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