Defense Budget and Program Issues Fiscal Year 1989 Budget

GAO discussed: (1) revisions in the fiscal year (FY) 1989 Department of Defense (DOD) budget; and (2) their implications over the next 5 years. GAO found that: (1) of the $33 billion in FY 1989 reductions, $22 billion were in procurement accounts, while the remainder came from operations accounts; (2) program cancellations yielded the greatest savings both in the current year and for subsequent years; and (3) DOD reduced overall requested funding for military personnel accounts by $3 billion. GAO also found that: (1) although the reductions contemplated for the next 5 years were substantial, some would result from actions already taken in the FY 1988 and 1989 budgets; (2) DOD planned about $35 billion between 1990 and 1993 for systems it cancelled in the revised FY 1989 budget; and (3) there was a potential for reduction from 1989 revisions of about $50 billion in subsequent years. In addition, GAO found that: (1) funding for improving combat forces' military readiness and sustainability has increased substantially; (2) because of resource limitations, some forces may not be able to meet deployment schedules; and (3) although there were selected sustainability item shortages, U.S. depots could transfer munitions to areas of the greatest need. GAO believes that, due to the instability of major DOD acquisition programs, inventory logistics problems, and escalating personnel costs, generating the necessary level of reductions will require a continuing top-level commitment from the Administration and Congress.