The Virginian-Pilot
                            THE VIRGINIAN-PILOT  
              Copyright (c) 1995, Landmark Communications, Inc.

DATE: Sunday, January 1, 1995                TAG: 9412290414
SECTION: COMMENTARY               PAGE: J1   EDITION: FINAL 
SOURCE: BY ERIC ROSENBERG 
                                             LENGTH: Medium:   95 lines

NAVY'S SHORT-TERM CASH CRUNCH INDICATES LONG-TERM PROBLEM

Navy tactical jet squadrons are grounded because of dwindling dollars. Crucial training for some sailors, along with maintenance of equipment, is delayed.

Those headline-making events occurred in the closing weeks of fiscal 1994, despite a whopping $20 billion-plus Navy operations and maintenance budget and Defense Secretary William Perry's claim that military readiness was his top priority.

Now, two months into the new fiscal year, the O&M spigot once again is flowing.

But all is not well in the seagoing service. Some senior officers are worried the readiness problems experienced earlier aren't an end-of-the-year phenomenon that money will solve.

The Navy's O&M budget was insufficient last year and the well ran dry. Through creative accounting and supplemental appropriations, the service shuffled money and managed to get more readiness funds to close out the fiscal year.

``If we don't get some help, probably we are going to have the same problems, only worse, because we carry all of last year's lingering effects into this year,'' Rear Adm. Dan Oliver, the Navy's director of assessment, said. ``Get help'' in the Navy mindset refers to at least two options: find additional money to ensure sufficient readiness or somehow curtail the White House's callsfor Navy deployments of ships and sailors around the globe.

A portion of the $25 billion readiness dollars recently added by President Clinton most likely will help. Still, there are signs that last fiscal year's problems are still being felt this year.

The unprecedented grounding of much of the aircraft carrier Saratoga's air wing is symptomatic of larger budgetary problems.

They are problems which the Congressional Budget Office suggests are only going to get worse if not addressed soon. CBO warned in a in a December report that the Navy's long-range plan was flatly unaffordable.

``CBO estimates that during the next decade, the plan for a 330-ship Navy would cost between $4 billion and $13 billion more than the $71 billion projected for the Department of the Navy's budget for fiscal 1999 contained in the administration's current defense plan,'' said the report.

In tight budget times, historically there has been pressure to sustain overall force levels at the expense of readiness.

CBO's proposed solutions are different than Oliver's, and far less amenable to the Navy leadership. They include reducing submarine and surface ship construction, cutting out costly aircraft carriers, reducing overall ship forces and paring the missions for Navy jets.

According to Franklin Spinney, a Pentagon analyst who has written extensively on the military's financial morass, the problem isn't a lack of readiness money.

In ``Anatomy of Decline,'' a voluminous study he did of the military's budgetary practices, Spinney concluded the Pentagon lacks the tools to assess readiness effectively.

``How can one assert readiness is a top priority when one cannot quantify the input and output of day-to-day operations? If it is truly a top priority, then why do senior decision-makers spend far more time and effort on acquisition decisions than on O&M and sustainability decisions?'' he wrote in the study.

Spinney has briefed senior civilian military leaders about the study, warning for more than two years of an impending readiness debacle.

As a means of preventing future readiness nightmares, the Navy is putting together an extensive list of what officials call ``readiness predictors.''

``The whole idea of predictive readiness is to look and see what things are happening in order to say, `If we don't do this, then that will happen,' '' Oliver said.

Since last June, senior fleet- and Pentagon-based Navy officials have been busy hashing out ways of accurately predicting readiness. They agreed on a list of seven broad areas to watch: personnel, training, aircraft, ships, munitions, installations and operational tempo and force structure.

They are now in the process of compiling lists of literally hundreds of factors that feed into those seven areas. Oliver and Rear Adm. James Greene, the assistant chief of naval operations for logistics, hope those factors eventually will yield accurate readiness forecasting.

``We all feel we have some very good predictive tools in the personnel world that we can bank on,'' said Greene, who co-chaired the readiness review with Oliver. ``I don't think any of us feels comfortable we have the equation solved for the other areas.'' MEMO: Eric Rosenberg is co-editor of Defense Week, a Washington,D.C.-based

newsletter. ILLUSTRATION: FILE COLOR PHOTOS

FLATTOP FINANCES: The Congressional Budget Office warns that the

Navy's vision of its long-range force plan is flatly unaffordable.

Some Navy tactical jet squadrons are grounded because of finances -

some say mismanaged.

by CNB