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of this month, and then this summer a contract will be let to three of the successful coalitions to take 18 months to develop the design, the specifications, the concept of what our deep water system, ships, planes, and C4I should be. And I am aware that there's some folks in your area to do that.

Mr. JOHNSON OF WISCONSIN. And finally, I guess, Mr. Chairman, I'd just agree that we're all in favor of the $35 million. We don't want to cut it from their budget, but we, I don't think, want to impose these icebreaking fees, which would break a long-time precedent.

Mr. GILCHREST. I agree with you, Mr. Johnson. Thank you very much.

We do have a vote, and we have a few minutes to make it. I had some other questions to the Master Chief, regarding tuition fees, healthcare, tuition assistance, and some other things. But I think I can call you directly on the phone and get those answers.

And Commodore Tucker, I think I'd feel free to do the same with you.

Commodore TUCKER. Yes, sir.

Mr. GILCHREST. We're just running out of time. And I don't want to hold this panel here. So we'll recess, and we'll bring the next panel up when we come back. Thank you all very much for your testimony. Admiral KRAMEK. Thank you. [Recess.)

Mr. GILCHREST. The subcommittee will come to order. Welcome everybody to the second half of the hearing. I'd like to introduce the second panel, Captain Fred Becker, Reserve Officers Association of the United States. Welcome.

Mr. Glen Nekvasil.
Mr. NEKVASIL. Nekvasil.

Mr. GILCHREST. Nekvasil. Communications Director, Lake Carriers' Association; and Mr. Joseph Cox, President of Chamber of Shipping in America.

Gentlemen, thank you for coming. We look forward to your testimony.

Captain Becker.
TESTIMONY OF CAPT. FRED R. BECKER, JR., DIRECTOR,

NAVAL AFFAIRS, RESERVE OFFICERS ASSOCIATION OF THE
UNITED STATES; GLEN G. NEKVASIL, COMMUNICATIONS DI-
RECTOR, LAKE CARRIERS' ASSOCIATION; AND JOSEPH J.
COX, PRESIDENT, CHAMBER OF SHIPPING OF AMERICA, ON
BEHALF OF THE AMERICAN WATERBORNE COMMERCE COA.
LITION
Captain BECKER. Thank you, sir.

Mr. Chairman, members of the committee, it's again my pleasure to represent the Reserve Officers Association of the United States before your committee. We'd like to first express our profound itude to your committee for its strong and vigorous support of the Coast Guard, and most particularly the Coast Guard Reserve, during the Fiscal Year 1998 authorization process.

We identified a number of significant concerns regarding the Coast Guard Reserve, including funding, recruiting, and the provi

gratsion of the port security unit equipment. In recognition of a vital support provided to the Nation by today's Coast Guard Reserve, your committee and your staff responded, and we certainly appreciate it.

Turning to Fiscal Year 1999, we'd summarize our concerns in just two areas. First and foremost, end strength as impacted by recruiting, and second, funding to the reserve account. When I testified before you almost a year ago_it was 19 March last year—the Coast Guard had 7,299 reservists. Today they have 7,287, a decrease of 12. Given the continued reduction in strength, at a level significantly below that authorized and appropriated for the current and last fiscal years, and despite the attention this committee and the Congress as a whole have given to the issue, our concerns have become substantially heightened.

We strongly support Fiscal Year 1999 request to maintain the Coast Guard reserve strength at 8,000. We have serious concerns regarding the proposal for an appropriated end-strength of only 7,600, especially in view of the fact, as the commandant just testified, they have now done a study that says they would need in excess of 12,000.

In this respect, believe it's particularly important that the Congress get to review, and the American public get to review the study, and would ask the committee to make a request for the report, or the study, the commandant's done, as to how many reservists he needs at the earliest possible juncture.

As to the continued end-strength shortfall, it must be noted that all the other Armed Services, even the United States Army Reserve, are meeting their recruiting goals for reservists. The immediate problem therefore appears to be unique to the United States Coast Guard. While recognizing the Coast Guard is making some effort to recruit reservists, it's evident, the numbers unfortunately speak for themselves, that they're not making progress.

In this respect, we'd note that the Fiscal Year 1998 DOD Authorization Bill, on the Senate side, required a report on reserve recruiting, to include any needed assistance that the Coast Guard might need from the Congress. Unfortunately, this report has not yet, to my knowledge, been transmitted to the Congress.

Mr. Chairman, we'd ask that you'd also make inquiries also regarding the status of this report, and that when you get it, ask your staff to review it, and take any action you deem appropriate during the current legislative session.

In the absence of that report, we suggest the following actions be taken: the assignment of specific recruiting responsibilities to commanding officers, who in many cases because of geographic constraints would be better able to recruit a reservist than a Coast Guard recruiter; the assignment of additional reservists to assist in recruiting; the assignment of reserve recruiting quotas to active duty recruiters, recruiters have quotas for active duty, but not for the reserves; and mandating relief from the geographic require ment imposed by the Reserve Personnel Allowance List, that significantly constrains the ability to match a recruited reservist to a particular location.

Turning to funding for the reserve account, the administration's request is $67 million for the reserve training appropriation for Fiscal Year 1999. It's our understanding the Coast Guard intends to use $25 million of the $67 million for reimbursement to operating expenses. Given the present procedures for reimbursement for operating expenses and direct payments by the Coast Guard Reserve, we understand this funding level of $67 million is the minimum needed for 7,600 reservists. Even at this minimal funding level, however, the Coast Guard Reserve would continue to receive only 12 days of annual training. All the other reserves from all the other services receive 14, except for the Navy. In addition, it should be noted that the $67 million funding level is based on a 90 percent funding of on-board strength, as opposed to the previously established way of budgeting for 90 percent of authorized strength.

Additional funding to support the full 8,000 authorized would appear to be $72 million. It should, however, be noted that the 1998 Appropriations Bill, in appropriating $67 million for the Coast Guard Reserve, limits the amount of reimbursement or limited the amount of reimbursement to $20 million.

The House Appropriations Committee noted the limitation was included to ensure that reserves are not assessed excessive chargebacks to the Coast Guard operating budget. The House report went on to say that the committee believes that the proposedlevel of reimbursement last year, $22.6 million, was too high. If $22.6 million was too high last year, it certainly suggests that $25 million is too high this year.

Further, we'd ask that the $20 million limitation by the Appropriations Committee and I realize it's the Appropriations Committee that put it on, not yur committee-must be particularly monitored to ensure the observation of congressional intent. In this regard, maybe with limited additional funding, carefully monitoring of reimbursement and direct funding from the reserve account to the active duty account, from a current as well as historical basis, that the Coast Guard Reserve would have sufficient funds to be at the $8,000 level. This would have a positive morale-building effect on reserves, by not jeopardizing the authorized and appropriated end strength over the long term. And I can tell you, that the House Authorization Committee, which as you know, sets the endstrength authorized for the reserves, has already questioned why the level should remain at 8,000, on more than one occasion, given the fact that they are not recruiting up to their authorized and appropriated level.

Following, sir, the Chairman of ROA's Coast Guard Committee, Rear Admiral Bob Merillees, United States Coast Guard retired, has at his own expense produced a brochure, entitled "The Coast Guard and Its Reserve: A Good Deal for America".

Admiral Merrilees—who've you met, sir, he called on both you and Mr. Clement last year—asked that I provide copies of this brochure to you, and I will provide it to you, as well as the Full Committee.

Again, thank you very much for your and the committee's strong support, and the opportunity to represent Coast Guard Reservists before this distinguished committee. I'm pleased to respond to any questions.

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WHAT THE COAST GUARD DOES

The

THIS PAPER

Focuses on the value of the Coast Guard Reserve to the Coast Guard and the nation, both as a peacetime augmentation force and as a mobilization force for domestic or foreign emergencies.

"he Coast Guard is one of the most pro

ductive agencies in the federal government and returns value to the public four times greater than its total budget. Its multi-mission character enables the rapid shift of resources to accomplish multiple, nearly simultaneous tasks by optimizing its entire active-duty, Reserve, auxiliary, and civilian work forces.

Unique among the armed forces, the Coast Guard fills a broad range of national security roles, including national defense, maritime and civil law enforcement, search and rescue, maritime safety, marine environmental protection, aids to navigation, and ice operations.

The Coast Guard is a valuable instrument of national policy, responding to tasks ranging from disaster relief to drug interdiction, from nation-building activities to alien migrant operations, and from small-scale contingencies to military operations other than war. The Coast Guard is a critical component of the armed forces. Included in several Commander in Chief (CINC) plans, the Coast Guard protects sealift operations for major military and small-scale contingencies, both in domestic and foreign ports.

Provides background and reasoning for the optimum size of the Coast Guard Selected Reserve to provide service in an extraordinarily cost-effective manner.

Outlines the diverse role of the Coast Guard and the evolution of events that make utilization of its part-time Reserve essential to the security of our nation.

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