Do you want to tell us something about what you know? Are you supposed to know that? Admiral JAMES. As a naval officer, I follow this with great interest, sir, but again the intelligence reports are relatively limited. I think that the Russians are given the capability and believed to have nuclear powered submarines and we know that they have rocket-carrying submarines at sea. However, we believe these to be in the order of the REGULUS type of submarine rocket which we built into three of our submarines quite recently and had in converted submarines of the older conventional types. These older submarine missile carriers are not now in our program for the future as we have gone to the POLARIS, to the intermediate range ballistic missile submarine. Mr. FLOOD. Certainly their REGULUS would be REGULUS II, or what we used to refer to as REGULUS II. Admiral JAMES. We were on the threshold of REGULUS II. I would give them that capability. Mr. FLOOD. They probably have a number of them. Admiral JAMES. I would expect they have a few such submarines. Mr. MAHON. Mr. Ford. Mr. FORD. Admiral James, I have been looking through tab 3 of the justifications for operation and maintenance under the heading "Ships and facilities." Certainly a very detailed breakdown is given of probably a hundred different subdivisions of how you are going to spend or obligate, a total of, how much in fiscal year 1962, if the money is made available. How much would that sum be? PROBABILITY OF CHANGES IN USE OF FUNDS Admiral JAMES. We are asking for $887 million in this program, sir, for the ships and facilities part. Mr. FORD. It would not be practical for this subcommittee to go into each of these detailed breakdowns and to come up with any variations of significance but I wonder if we gave every penny to the Navy, $887 million for O. & M. for ships and facilities, how much change in the 12-month period would transpire as far as the Navy is concerned in each of these categories? Admiral JAMES. The change would be continuous but of small order. The charge results largely from the unexpected. We spoke earlier of some of the disasters we have had-fire in Saratoga, fire in Sargo, collision of a recently completed Fram II destroyer and another destroyer, and the like, and while we do budget for the unexpected in the sense of having restricted availability money asked for to a historic pattern, there are changes. The cost of work has been growing constantly. Our history has been roughly a 52-percent increase in the cost of labor and materials in the area affected by most of these funds. As we must assimilate that increase during the course of a year because we may not budget for it in anticipation of the event, we have to change the program by reducing largely the extent to which the modernization of the ships under overhaul is carried forward and in some of the more drastic cases to the number of ships that we actually complete the overhauls on. In terms of specific dollars or percentages perhaps my Comptroller can support me with some indication of the variation. If he cannot, we can supply this to you later, sir. Mr. FORD. Tell us about some of the significant variations in the execution of either your 1960 or 1961 budget in these numerous categories. Captain JONES. Yes, sir. In the 1961 budget there were numbers of changes. The maximum one I see here, sir, is $5 million for increases in costs of FRAM rehabilitation work. Mr. FORD. These are variations between what was submitted or justified to this committee and what you actually have done executionwise? Captain JONES. Yes, sir. Admiral JAMES. I think in the justification book, in the very front of my book at least, pages marked 1, 2, 3, and 4, you will find the program changes that have occurred, both the increases and the decreases spelled out in specific terms. Mr. FORD. Are those changes which are also in my book related to the budget justifications that were submitted to the Congress for the fiscal year? Admiral JAMES. Yes, sir. Mr. FORD. These are not changes related to previous or future fiscal years? Admiral JAMES. I am sorry. These are not differences between the budget as requested and as executed but this information is available and can be made available to you. Captain JONES. I have all the pluses and minuses right here, Mr. Ford. The maximum one I have given you. I can give you as many more as you wish. Mr. FORD. What was that figure again? Captain JONES. $5 million was transferred into the category to accomplish FRAM rehabilitation work. Mr. FORD. Percentagewise how much increase would that be to this particular account? Captain JONES. The total amount of FRAM, sir, was about $100 million and so this would be about 5 percent. Mr. FORD. Where did you get that money or how did you achieve it? Captain JONES. It came from other parts of the "ships and facilities" budget. Specifically, for example, it came from a reduction in the cost of overhauls. That was a reduction of $2 million. It came from a reduction in restricted availability of $2,100,000; and so forth, throughout the entire appropriation of $867 million, the maximum change being less than $5 million in any one category. SIGNIFICANT REPROGRAMINGS IN 1961 Mr. FORD. Can you put in the record at this point the significant changes, upward or downward in the numerous accounts which are set forth here as the program has been or will be executed in fiscal year 1961? Captain JONES. We will do so, sir; over a million dollars, say? Mr. FORD. Some of these accounts are less than a million. There are not very many of them. Captain JONES. We will give you all the changes of significance. Mr. FORD. In relationship to the account that is set forth here. Captain JONES. Yes, sir. (The information requested follows:) -$1,037 transfer to other Navy activities. -$1,863 reduction in number of regular overhauls, in- +$4,994 increase in unit cost based on 1960 experience. Comparison of fiscal year 1961 ships and facilities congressional submission with fiscal year 1961 column of fiscal year 1962 congressional submission Increase in number of service craft overhauls. +$435 Activate service craft for POLARIS. +$542 Increase in 1961 commissioning program due to +$668 Increase in procurement of ships designs. +$372 Charter of oilers for 6th Fleet. Reductions in rehabilitation of shipboard components, $442 Decrease in ice damage requirements for DEEP- Minor reduction in requirements. Decrease in contract inspection requirements. 16, 104 6000 Comparison of fiscal year 1961 ships and facilities congressional submission with fiscal year 1961 column of fiscal year 1962 congressional submission-Continued -$2,256 transfer housing to Bureau of Yards and Docks. -$120 transfer to other Navy activity. +$100 increase for Operation Deep Freeze. -$1,636 transfer housing to Bureau of Yards and Docks. +$940 to fund special projects, wage board increases, Defer facilities projects to cover higher priority require- To support Projects Hurricane and Typhoon. -$157 reduce funding of reserve plant requirements, 2450. Departmental Administration-Bureau of |