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Mr. INOUYE. Mr. President, I support the Seawolf. I think President Bush was wrong to ask the Congress to rescind the funds it had appropriated for the production of the second and third ship in this modern, technologically advanced class of nuclear attack submarines. I believe the Secretary of Defense was mistakenly led to recommend that rescission to the President. To put the matter directly, it now appears that both the President and the Secretary of Defense were misinformed. The rescission, and not the submarine should be canceled.

Let me be clear: With the demise of the Soviet Union, the decision to cancel future funding of the Seawolf program may be appropriate; I will agree that we could stop the program after three submarines have been built. That would make the Seawolf a viable class of submarines. It could operate effectively, crews could be trained, maintenance could be scheduled to achieve cost efficiencies, and missions--which only the Seawolf can perform--could be successfully engaged. Yes, we could stop after three.

But to take away the funds already provided, to incur huge costs and have nothing to show for it, to threaten the industrial base for submarine production while endangering American technological leadership in nuclear submarines is a mistake. I know that. The Navy knows that. Americans who build submarines for our country and Americans who go under the sea in them, know the decision is a mistake.

Mr. President, I suspect that today both the President of the United States and the Secretary of Defense would, perhaps in a private moment, admit that it is a mistake.

Let us examine the facts. The President has proposed the rescission of $2,765,900,000 previously appropriated for the procurement of two SSN-21's. In addition, the President proposes the rescission of $189,400,000 already provided for SSN-21 training and support equipment. These rescissions are proposed as deficit reducing measures and, in each case, the President's rescission message said, `The Navy's ability to accomplish its mission successfully would not be affected by this rescission proposal.'

Are these the real facts? No. Upon close examination they appear to be shadows in the smoke and mirrors game being played at the White House and the Office of Management and the Budget. The rescission of funds already provided by the Congress for the Seawolf would not save money. When the details are reviewed, Navy papers show little costs can be recovered. Moreover, with little budgetary savings to be achieved, this decision would rob the Navy of a significant capability and would have a pronounced negative effect on the Navy of the future and its ability to meet the objectives we will expect of it. Work on these submarines is underway, contracts have been awarded, and there are substantial contract liabilities which must be met if they are terminated.

When the fiscal year 1993 budget was sent to the Congress, supposed savings were identified. Later, when the Pentagon leadership began to more carefully examine the costs of terminating contracts--contracts which it had itself signed--it was found that savings would not occur. Oh, at first, it was said that substantial savings could be achieved because termination costs would be no more than $450 million. Then the estimate of these costs grew to $900 million, and more. Indeed, the most recent calculation by the Assistant Secretary of the Navy for Acquisition shows that termination costs will exceed $1.9 billion.

This is not just a matter of faulty estimating. In point of fact, the Navy did not know what the termination costs would be when the decision to rescind funding was made. In a hearing before the Senate Armed Services Committee on April 1 of this year, the Assistant Secretary for Acquisition was asked by Senator Levin if he knew what the termination costs would be when he recommended termination. The answer was `No.'

Mr. President, some Members may wonder why money cannot be saved. Well, the answer is that the funds to build the second and third Seawolf submarines have not only been appropriated, but binding contractual commitments have been made by the Pentagon for advance procurement of equipment for these ships. Funds already so committed and expended cannot be saved by a decision not to build these ships. I have read the Navy documents which, in the clipped phrasing of Navy memos, state `Substantial majority of effort already expended.' These documents show that little or nothing will be saved in equipment contracts.

For example, on ship sets of the Seawolf fire control system, the AN/BSY-2, the Navy says: `SSN-22 unit is required to complete R&D and insure timely delivery of lead ship set. estimated net recovery for termination of SSN-23 ship is negligible, however, due to anticipated cost impact to remaining R&D and SCN efforts.' In other words, we could terminate the ships and have a lot of parts lying around, but we would not save money.

Mr. President, I do not believe that is what the Senate wants to do. It does not make any sense. The expenditures for equipment already procured and the costs of contract terminations are substantially greater than any savings assumed by the Pentagon. These are their contracts; they should know better.

Senators should ask themselves, if this were our idea, if we in the Senate suggested that the Department of Defense terminate a procurement program, and if we suggested that it do so even if that meant breaking contracts and absorbing the costs of equipment procured in advance of production, what could we expect? Surely, the President would rail against us and decry our actions; we would be accused of micromanagement. Well, Mr. President, the decision to terminate the Seawolf is not micromanagement on the part of the Pentagon--it is not management.

The proposed rescission of funds for the Seawolf will not save money; It will cost money. Furthermore, it is clear that, if carried out, the decision would cost American technological leadership in Submarine warfare, it would endanger our industrial base, and it would place our naval forces in danger.

Mr. President, I am not alone in this belief. The former Chief of Naval Operations, the most senior military officer in our Navy has said:

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With termination of the Seawolf and cancellation of funds, President Bush and Defense Secretary Dick Cheney have put the future of submarine warfare and submarine technology in turmoil or a one-timer saving that gets smaller with every estimate.

Indeed, Mr. President, as I review the proposed rescission, I think the Secretary of Defense and the President ought to admit that they were mistaken.

Mr. President, I have made some broad assertions. Let me substantiate them. I wish to address three aspects of the rescission proposal:

First, I will add to what I have said already and address the question of costs and savings;

Second, I will address the question of American technological leadership and nuclear submarine construction; and

Third, I will address the importance of the Seawolf to future submarine warfare.

First, the costs.

The President proposes to save $2.9 billion through the rescission of funds provided for the Seawolf. The Navy now calculates that termination costs will be $1.9 billion. Without new submarine production, the shipyard which is now under contract for the SSN-21, Electric Boat, will go out of business. The Government will face additional shutdown costs of somewhere between $500 million and $1.5 billion. To this we must also add the sunk costs of approximately $1 billion already expended on design and construction of the SSN-22 and SSN-23 and on equipment procured in advance of production.

So, to save $2.9 billion, we would lose at least $3.4 billion and, perhaps, as much as $4.4 billion. The costs of this decision far outweigh the supposed savings. And we would have nothing to show for it. On the other hand, without the appropriation of additional funds, we can complete the production of SSN-22 and SSN-23, which, together with SSN-21, can form a valued and viable military asset.

Second, the industrial base and preservation of American technological leadership.

The Seawolf is the newest attack submarine in the world. It incorporates significant technological advances developed since completing the Los Angeles class design in the 1970's. Adm. Bruce Demars, the Director of Naval Nuclear Propulsion, has testified that, `the Seawolf will operate more quietly over the ship's entire speed range than the Los Angeles class submarine does sitting alongside the pier.' Admiral Trost has testified that the attributes of the Seawolf `constitute major advances in submarine mobility, combat effectiveness, and survivability.'

There is no question that the United States is the world leader in nuclear submarine construction. That commanding position will be eroded and, perhaps, lost forever, if the Seawolf is not built as a technological bridge to the future. As Admiral Trost has said:

Unilaterally forfeiting world leadership in submarine design and construction, with the knowledge that it will be required in the future, is irresponsible. * * * The imperative to design, build and operate the most capable submarines has not changed. Today that existing submarine design is Seawolf.

In testimony before the Armed Services Committee on April 1 of this year, both Admirals Demars and Trost had similar observations about the need to actually build and operate submarines. In essence each said, you cannot maintain the construction and production skills required for submarines with design exercises or surface ship construction.

Mr. President, I do not believe anyone in this Chamber can fully appreciate the complex engineering, precision manufacturing, rigorous and comprehensive training and formal operating procedures which go into the production and operation of nuclear submarines. The fact is our country has done this and done it very, very well.

We have all seen the pictures of Soviet nuclear submarines limping along on the surface with smoke billowing out of reactor compartments. That American nuclear powered ships have steamed nearly 90 million miles and accumulated 4,000 years of operations without a reactor accident or release of radioactivity which has had an adverse effect on the crews, the public, or the environment is a tribute both to the Navy and to the contractors who have built them for us.

The preservation of the American technological advantage is not just a matter of building nuclear submarines. If costs were not a factor, we could restart the line and build more of the Los Angeles-class submarine. A restart, however, would be more costly than completing the three Seawolf ships. It is not just a matter of building nuclear powered ships. If rising costs do not prevent us from doing so, we will build nuclear powered carriers. But that would not maintain the unique skills and the manufacturing and testing regimes which submarines require. It is a question of building this class of submarines--the Seawolf--as a means of preserving both the base of skilled workers and the manufacturing capacities for submarine production.

It is a question of maintaining the technology as a bridge to the future. Paper designs alone will not work. We have to build to preserve.

Mr. President, last fall, Navy Secretary Garrett wrote to Senator Lieberman urging him to support the Seawold. He told Senator Lieberman, `the Seawolf is absolutely vital to maintain our Nation's technological superiority in undersea warfare.' In intensive discussions on the eve of our full committee markup of the fiscal year 1992 defense appropriations bill, Navy Secretary Garrett personally intervened and asked me to restore funding for the Seawolf. As has been noted, that was just 3 months before the President's State of the Union announcement that he would rescind funding for the Seawolf.

Mr. President, the senior civilian and military leaders of the Navy have testified to the importance of Seawolf construction to the preservation of the submarine industrial base and the protection of American technological superiority. The principal designer and manufacturer of nuclear submarines has testified on the importance of continuing Seawolf production. Electric boat has offered unchallenged testimony that, without the Seawolf, submarine production at the yard will be finished--for all time, Mr. President, for all time. These are the people who have delivered the safest, most effective submarines in the world. I believe them.

On the other side of the scale is a hastily contrived decision which is justified as a cost saving measure and which does not measure up. How many here know that the Deputy Secretary of Defense, Mr. Atwood, commissioned a study on submarine industrial requirements after the termination of Seawolf was announced. The decision was unfortunately made before the study was begun and before the submarine industrial base options were understood. Mr. President, I think that is a telling indictment of the process which led to the decision to rescind funds for the Seawolf and put America's submarine industrial base in peril.

And now, Mr. President, I come to my third assertion, that the Seawolf is important to future of submarine warfare.

In a very courageous statement before the Armed Services Committee, Admiral Demars said that in his personal professional opinion we should continue production of the Seawolf. As the director of naval nuclear propulsion he was concerned about maintaining the nuclear submarine industrial base, particularly the base of sub-vendors, many of whom make limited quantities of items uniquely designed for nuclear submarine propulsion units. But he also spoke of the military utility of the Seawolf in the context of the post-cold war environment. Admiral Demars said, `the former Soviet fleet is intact and still the world's largest submarine force. And their third generation submarines are significantly better that their predecessors.'

He also said, `attack submarines, because of their stealth, mobility, and endurance, are also ideal platforms to help deal with regional conflicts. Attack submarines can arrive on station unsupported, without risk to escorts and need for logistic trains. They can collect intelligence, launch cruise missiles ashore, land special forces, lay mines, and clear the area of enemy ships.' Mr. President, I hope we will never have to make use of these capabilities, but history would indicate that we must be prepared.

Mr. President, many attributes of the Seawolf are and must remain classified. However, expert witnesses have told the Senate in open hearings that the Seawolf has:

A tenfold improvement in stealth--that is, quitness--over the improved SSN-688 class, a major increase in tactical speed, the maximum speed at which the submarine's sensors are fully effective, and a highly automated combat system with rapid target localization, a key feature when up against very quite diesel-electric or nuclear submarines.

These are significant improvements because they will permit the Seawolf to operate effectively against the very quite diesel-electric submarines presently being acquired by regional powers who may one day be hostile towards the United States. Because of its improved technologies, the Seawolf can operate more effectively in shallow waters, a not inconsequential consideration when the depth of the Straits of Hormuz or much of the Indian Ocean or the South China Sea is measured.

Mr. President, 90 percent of the supplies for Operation Desert Storm moved by sea--over 8,700 miles one way. Because Iraq did not have a navy of any consequence, this was a logistics rather than a military problem. But we will not always be so lucky, Mr. President. Our geographic position dictates the requirement that we maintain the wherewithal to control the seas or risk becoming isolated. We are a maritime nation. Exports now comprise 25 percent of our manufacturing output, up from 10 percent in the 1970. The United States must maintain a strong Navy capable of protecting our national interests, our allies, the sea lines of communication so vital to our economic well-being.

Mr. President, I will conclude my remarks. I believe I have demonstrated that the decision to rescind funds appropriated for the Seawolf was an ill-considered decision which we should reject because cancellation of the Seawolf will not save money; it will destroy the submarine industrial base and irresponsibly surrender the American technological advantage in nuclear submarine production and design; and it would rob the Navy of a significant capability and would have a pronounced negative effect on the Navy of the future and its ability to meet the objectives we will expect of it.

And so, Mr. President, I support the Seawolf.

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Mr. CHAFEE addressed the Chair.

The PRESIDING OFFICER. The Senator from Rhode Island.

Mr. CHAFEE. Mr. President, first of all, before the distinguished Senator from Hawaii leaves, I would like to commend him on his statement. I heard his entire statement and that is the reason I stayed, because I wanted to hear what he had to say. It seems to me he laid out the arguments as well as anybody possibly could.

What particularly appealed to me was the accent that he made on what we call the industrial base, which is a term that is kicked around a lot around this place, but it seems to me what the Senator from Hawaii was saying is that these are very unique skills that are not readily transferable to something else.

As I understand it, and certainly I firmly believe it, if we do not continue to build these Seawolfs at a very modest rate--I think the original goal was something like 14 and now it is down to 3--so there is no question but that there is a peace dividend there. I thought the point the Senator made was that he pays tribute not just to the U.S. Navy and the safety record that has been achieved, but he also pointed out the suppliers, the record that they have achieved in supplying the U.S. Navy with these goods that meet very high tolerances.

And thus we have had this remarkable record. I could not repeat how many million miles of steaming hours the Senator said they have had and how many, I believe the Senator said ship years.

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Mr. INOUYE. 4,000.

Mr. CHAFEE. 4,000 ship yards without any----

Mr. INOUYE. Without a single accident.

Mr. CHAFEE. Without a single accident, which is remarkable. And as, of course, the Senator has pointed out, we have, indeed, seen pictures of these Soviet submarines under tow or just simply limping along, as the Senator pointed out, with the smoke billowing from them.

I commend the Senator from Hawaii for his very fine statement; and second, I thank him for the wonderful support he has given in furtherance of the points he is making toward this Seawolf program. The Senator has been a stalwart, and all of us from the States affected are very grateful to him.

Mr. INOUYE. Mr. President, I am most grateful for the gracious remarks. But as chairman of the Defense Appropriations Subcommittee, may I assure my colleagues that I would not be here supporting the Seawolf if I did not believe it was in our national interest. It is in our national interest.

If I may respectfully correct my colleague, the original plan was to build 29 Seawolfs, and we are just building three; just about 10 percent. This is a major departure from our original plan. Without the three, we will not have a working unit to bring about cost-effectiveness. But all in all, just from the standpoint of money, because that is our major concern at this moment, we would be saving money by building these three. If we followed the President's recommendation, it would cost the taxpayers $4.4 billion. There will not be any savings.

So I thank my colleague.

Mr. PELL addressed the Chair.

The PRESIDING OFFICER. The Senator from Rhode Island.

Mr. PELL. Mr. President, I also commend and congratulate the Senator from Hawaii on his thoughts and express my delight and joy at his conclusion that the Seawolf is very much in the national interest. I appreciate that.

I think that the influence of sea power on history, as was written by Alfred Thayer Mahan about 100 years ago, is just as valid today as it was when he wrote it 100 years ago. And in the end, it is not the airlanes that control the military position of one's adversary as much as the sealanes.

I am also, speaking parochially, delighted with Senator Inouye's conclusions about the national interest, because that also is a great source of comfort to my constituents in Rhode Island.

Mr. INOUYE. I thank the chairman of the Foreign Relations Committee.

Mr. President, I yield the floor.

The PRESIDING OFFICER. The Senator from Arkansas.

Mr. PRYOR. Mr. President, I thank the Chair.

Mr. President, I see my distinguished colleague from the State of Washington, Senator Gorton. I wonder if he, too, was seeking recognition at this time. I am in no hurry if he desires to go before me.

Mr. GORTON. He was, but he recognizes that his friend from Arkansas was here first.

END