Order Code IB98028
CRS Issue Brief for Congress
Received through the CRS Web
Theater Missile Defense:
Issues for Congress
Updated March 19, 2001
Robert Shuey
Foreign Affairs, Defense, and Trade Division
Congressional Research Service ˜ The Library of Congress

---

CONTENTS
SUMMARY
MOST RECENT DEVELOPMENTS
BACKGROUND AND ANALYSIS
Patriot PAC-3 (Patriot Advanced Capability-3, MIM-104 Patriot/ERINT)
Navy Area Missile Defense
Medium Extended Air Defense System (MEADS)
Theater High-Altitude Air Defense (THAAD)
Navy Theater Wide Defense
Airborne Laser (ABL)
Systems Description
Regional Theater Missile Defense Options
NATO TMD Cooperation
The Israeli “Arrow” and Regional Defense
Gulf Cooperation Council Theater Missile Defense
East Asia Theater Missile Defense
Issues for Congress
TMD Funding
Pace of Development and Schedules of Deployment
Redundancy of TMD Systems
ABM Treaty Implication
Program Management
106th Congress Legislation

---

IB98028
03-19-01
Theater Missile Defense:
Issues for Congress
SUMMARY
U.S. troops deployed abroad and U.S.
smaller programs. It also required that NTW
allies are increasingly threatened by biological,
and THAAD be funded and managed as sepa-
chemical, and even nuclear weapons that could
rate programs, contrary to the BMDO plan to
be delivered by ballistic or cruise missiles.
have them compete for funds from a single
Missile production by North Korea and Iran
line.
has caused concern and has generated consid-
erable support in Congress to develop and
The Bush Administration announced it
deploy missile defense systems.
would request an additional $1 billion for
national and theater missile defense for FY
For fiscal year 2001, the President
2002.
requested about $2.5 billion for Theater Mis-
sile Defense (TMD), $400 million less than the
THAAD successfully intercepted Hera
amount approved the previous year. This sum
target missiles on June 10 and August 2, 1999,
includes $370 million for procurement, $2.17
after having failed six attempted interception
billion for Research, Development, Test, and
test flights. The last failure occurred in March
Evaluation, and $1.9 million for military con-
29, 1999. Patriot PAC-3 intercepted a target
struction. Six U.S. theater missile defense
missile in October 2000, its sixth consecutive
weapon systems being developed are: Patriot
intercept.
PAC-3, Navy Area Defense (NAD), Medium
Extended Air Defense System (MEADS),
Congress has supported NTW, the other
Theater High Altitude Area Defense
upper tier system, and some Members have
(THAAD), Navy Theater Wide (NTW), and
encouraged a rapid development of NTW
Airborne Laser (ABL). The request included
because it might provide some strategic missile
smaller amounts than last year for THAAD,
defense capability.
NAD, PAC-3, and ABL. Pentagon officials
have said TMD programs need several hun-
Congress has also criticized the pace of
dred millions more than requested to reduce
development and schedules of deployment,
risks and speed development.
redundancy of the various systems, restrictions
that the ABM Treaty may apply, and systems
The defense authorization act increased
management of missile defense. Of the several
amounts in FY2001 for PAC-3, NTW and
TMD programs, THAAD and Navy Theater
ABL, approved requested amounts for
Wide systems have received the most congres-
THAAD and NAD, and cut the amount for
sional attention.
MEADS. For FY2000, Congress increased
amounts for PAC-3, NTW, and a number of
Congressional Research Service ˜ The Library of Congress

---

IB98028
03-19-01

MOST RECENT DEVELOPMENTS
Secretary of Defense Rumsfeld confirmed reports the administration would request an
additional $1 billion for missile defense for fiscal year 2002. The allocation of the
additional request will be announced in April.
Representative Curt Weldon visited Russia in February and proposed that the United
States, Russia, and Europe cooperate on developing Russia’s S-500 theater missile defense
system. On returning to the U.S. he said it is time to call Russia’s bluff and charged
Russia’s calls for cooperative missile defense were merely efforts to drive a wedge between
the United States and Europe. (Inside Missile Defense March 7, 2001; Defense News,
February 26, 2001.)
On October 6, the President signed the FY2001 Defense Authorization bill (H.R. 4205,
P.L. 106-398). The act authorizes the requested amounts for THAAD and NAD, adds $80
million for NTW, $85 million for ABL, $152 million for PAC-3 development, and $60
million for PAC-3 procurement. It decreases the requested amount for MEADS by $9.7
million. To the $81.2 million requested for Israeli cooperative projects, the act adds $8
million for the Arrow System Improvement Plan. It also instructs BMDO to develop, and
report to Congress, a plan to defend the United States, American forces overseas, and other
U.S. interests against longer range MRBMs and IRBMs. It requires BMDO to approve any
major changes to the Air Force’s Airborne Laser program and to report to Congress an
assessment of the program. In mid-November 2000, the Administration requested a $750
million supplemental appropriation to support Middle East Peace. The package would
include $200 million for Israeli defense systems such as Arrow II, boost phase intercept, and
radar aircraft.
BACKGROUND AND ANALYSIS
U.S. troops deployed abroad and U.S. allies are increasingly threatened by enemy
biological, chemical, and even nuclear weapons delivered by ballistic and cruise missiles.
During the Gulf War, 23 U.S. troops were killed when an Iraqi Scud missile with a
conventional high-explosive warhead hit a barracks in Saudi Arabia. Iraq also had biological
and chemical warheads that might have inflicted far greater casualties. Three dozen countries
have ballistic missiles and scores of countries have various types of cruise missiles — mostly
anti-ship missiles. About 11 countries have, or are seeking, offensive biological weapons
programs, and about 17 probably have chemical weapons. (See CRS Report RL 30669,
Nuclear, Biological, and Chemical Weapons and Missiles: The Current Situation and
Trends.) There is considerable support in Congress to develop and deploy theater missile
defense systems with U.S. forces overseas and to help allied countries achieve effective
theater missile defense.
On July 15, 1998, the Commission to Assess the Ballistic Missile Threat to the United
States (the Rumsfeld Report), issued its report to Congress as required by P.L. 104-201. The
commission report indicated the threat is “broader, more mature and evolving more rapidly”
than previously estimated by the intelligence community and that the community’s ability to
CRS-1

---

IB98028
03-19-01
estimate the threat is declining. The commission did not comment on the need for a ballistic
missile defense, but some Members of Congress have cited the report as evidence supporting
the need for rapid development and deployment of missile defenses.
Justification for missile defense programs (both theater and national) is often based on
missiles produced in North Korea that threaten South Korea, Japan, and perhaps even the
United States. Some of North Korean missiles have been exported to countries such as Iran,
Syria, Libya, and Pakistan. On September 12, 1999, North Korea told U.S. officials it would
not test long range missiles while negotiations to improve relations are underway. President
Clinton then announced a reduction in the economic sanctions against North Korea.
Furthermore, some scientists (such as Richard Garwin of MIT) conclude the U.S. missile
defense systems currently under development would be ineffective against North Korean
missiles, as well as those of Russia and China, because they would not be able to differentiate
warheads form decoys and would not be able to destroy all the submunitions that an enemy
missile could deploy in the ascent phase.
For fiscal year 2001 the President requested $2.8 billion for Theater Missile Defense
(TMD), almost $440 million less than last year. The amount requested for Theater Missile
Defense is 60% of the total BMDO program — the Administration also requested $1.9 billion
for National Missile Defense. and almost $450 million in supporting areas. The TMD request
includes $444 million for procurement, $2.4 billion for Research, Development, Test, and
Evaluation, and $370 million for military construction. These amounts include funds for six
U.S. theater missile defense weapons programs: Patriot (PAC-3), Navy Area Defense (NAD)
defense, Medium-Extended Air Defense System (MEADS), Theater High Altitude Area
Defense (THAAD), Navy Theater Wide (NTW), and Airborne Laser (ABL), and several
supporting programs. Funding for the development of Airborne Laser (ABL) is included in
the Air Force Budget. In addition, BMDO’s budget includes funds for National Missile
Defense, advanced research, international cooperation, and support programs. Described
below are the six major U.S. theater missile defense systems that are currently being
developed. At the end of that discussion is a table showing funding levels for TMD and its
elements.
Patriot PAC-3 (Patriot Advanced Capability-3, MIM-104
Patriot/ERINT)
The Patriot PAC-3 is the U.S. Army’s primary medium-to-long-range air defense missile
system and is the closest developmental missile defense system to being fielded. It is a major
system improvement of the Patriot used in the Gulf War, and of the subsequent PAC-2. It
will target enemy missiles in their mid-course or descent phase in the lower atmosphere, and
will be used in conjunction with the longer-range THAAD. It has completed the
Demonstration/ Validation phase and is continuing improvement in the Engineering and
Manufacturing Development phase of the acquisition process, while it proceeds in low-rate
initial production (LRIP) under a third-phase contract with Lockheed Martin. When all
changes have been made, the PAC-3 will have a new hit-to-kill interceptor missile (the
ERINT), improved communications, radar, and ground support systems. Early versions have
been deployed and the first unit to be equipped with the final version is scheduled to be
deployed in the fourth quarter FY2001. Full-rate production was also scheduled to begin in
late 2001 but may be delayed.
CRS-2

---

IB98028
03-19-01
In April 2000, the Pentagon projected costs of PAC-3 had increased by $102 million to
$2.9 billion because of increased reliability and spares costs. A GAO report issued in July
2000 showed PAC-3 total program costs increased from $3.9 billion for 1,200 missiles
planned in 1994 to $6.9 billion for about 1012 missiles in the current plan. BMDO and the
Army are attempting to cut the current cost of the missile to allow the purchase of additional
missiles. In September 2000, the Pentagon told Congress it could afford only 32 PAC-3
missiles in FY2001 rather than the 40 for which funds had been requested despite heavy
funding in the authorization and appropriation acts and an additional $35 million in the
FY2000 supplemental. In November, DoD indicated it would buy the 40 PAC-3s but would
have to buy fewer launchers and associated equipment. One article estimated most of the cost
increase could be eliminated by increasing the rate of production (Army Times, October 2,
2000). In December, the Army announced it had restructured the program to finish testing
and begin full-rate production earlier. It also plans to increase the numbers purchased in the
years 2003-2007.
For FY2001, the Administration requested $365.5 million for procurement and $81
million for further development of the PAC-3. The defense authorization act (H.R. 4205,
P.L. 106-398) added $152 million for further development and $65 million for procurement.
In 1999, Congress expressed concern about the increasing unit procurement cost, directed
the Army Secretary to prepare a report on the capabilities of Patriot Anti-Cruise Missile
(PACM) and the opportunity costs of its further development, and added $152 million for
PAC-3 R&D and $60 million for procurement. In 2000, Congress again expressed concern
in the conference report about the cost growth and schedule delays in the PAC-3 program.
In January 2001, the 1st battalion 203rd Defense Artillery of the Alabama National Guard
will deploy a Patriot battery to the Middle East. The Guard is to play an active role in tactical
missile defense and probably in National Missile Defense.
In May 2000, DoD decided to stop development of PACM because PAC-3 and
improvements being made to PAC-2 systems provide a more cost effective defense against
ballistic and cruise missile threats. The decision has been controversial, particularly among
companies that would have produced PACM. But the conference report on the FY2001
authorization bill noted no funds had been requested for PACM and instructed the Secretary
of Defense to determine if PACM production is warranted. If he so determines, $35 million
of authorized funds would be available to retrofit existing Patriot missiles.
On March 15, 1999, a PAC-3 intercepted a Hera target missile over White Sands Missile
Testing Range in a test of its homing guidance system. On September 10, a modified PAC-2
successfully intercepted a cruise missile target for the second time in two tries. On September
16, 1999, a PAC-3 again intercepted a Hera target missile and another intercept was achieved
on February 5, 2000. PAC-3 completed its sixth consecutive intercept of a ballistic missile
target on October 14, 2000. It detected and destroyed a maneuvering Storm target missile
even though other objects were in its field of view. A PAC-2 flight tested on the same day
failed to intercept a cruise missile-like drone. On July 22 and 29, 2000, PAC-3 missiles
intercepted low-flying cruise missiles.
In March 2000, it was reported that a large number of PAC-2 systems deployed with
U.S. forces in Kuwait, Saudi Arabia, and South Korea needed to be replaced because the
targeting data links tended to fail after extended periods of being on alert. The Army
CRS-3

---

IB98028
03-19-01
discovered two other problems with the missiles and is studying whether Raytheon is liable
for the malfunctions.
Germany, the Netherlands, Japan, and Israel have Patriot systems and are in various
stages of upgrading them. Japan produces Patriots under license. South Korea is considering
buying Patriots or some other missile defense system. Taiwan is acquiring a modified Patriot
system from U.S. defense industries. See the section below on issues for Congress for a brief
discussion of an Asian regional missile defense.
Navy Area Missile Defense
The Navy Area Defense (NAD) system, formerly known as Navy Lower Tier, is based
on modified Aegis air defense ships and improved Standard missiles. It is in the Engineering
and Manufacturing phase. On June 29, 2000, Defense Department conducted the first of eight
tests in the Engineering and Manufacturing phase of the Standard Missile Block IVA. The
missile’s guidance, auto-pilot, and aerodynamic stability were successful. On August 24,
2000, a successful flight test demonstrated the missile’s structural integrity, maneuverability,
auto-pilot, and stability. NAD is scheduled to have intercept flight tests in 2001 and the first
ship is to be equipped in 2003. A draft DoD report in November 2000 indicated NAD
development had slipped 13 months and would not meet the initial deployment by 2003.
In September 1997, the Navy announced a new “evolutionary deployment approach” in
which it will attain initial operating capability for Navy Area Defense and Navy Theater Wide
systems as soon as possible rather than waiting to develop and deploy the highest levels of
technology. The Navy plans to use new acquisition techniques to speed the deployment of
missile defense using current Aegis and vertical launch capabilities, and Standard missiles
(with slight modifications to the Block IV system). It may double the number of ships
equipped with Navy Area defense in the first few years. Subsequently, the Navy will modify
the warhead and, perhaps, other subsystems.
The Administration requested $274.2 million for NAD development in FY2001 and the
defense authorization act approved that amount. BMDO requested $272.2 million for
RDT&E in FY2000 but H.R. 1401 shifted $55 million from procurement to development.
In 1999, Congress added $41.8 million for Navy Area R&D.
Medium Extended Air Defense System (MEADS)
The Medium Extended Air Defense System (MEADS), formerly the U.S. Army’s Corps
Surface-to-Air (Corps SAM), is a multinational, ground-based, mobile, air and missile defense
system. It is essentially a composite of existing technologies with either similar or enhanced
capabilities. It will cover the lower-tier of the layered air and theater missile defense and will
operate in the division area of the battlefield to protect key maneuver units against various
airborne threats. As an integral part of the air and missile defense family of systems, MEADS
complements the other lower- and upper-tier systems and provides some overlap in ballistic
missile defense. One of the distinguishing characteristics of MEADS is its ability to maneuver
and deploy quickly. It will be able to accompany troops within the theater and will require
less manpower and logistical support to operate than other missile defense systems. Of the
various TMD systems, only MEADS will provide 360-degree coverage. MEADS will use
the Patriot PAC-3 missile with its hit-to-kill warhead, designed to intercept multiple and
CRS-4

---

IB98028
03-19-01
simultaneous short range ballistic missiles (SRBMs), low cross-section cruise missiles and
aircraft, and unmanned aerial vehicles. MEADS will eventually replace the aging HAWK air
defense system.
The Ballistic Missile Defense Organization (BMDO) serves as the acquisition executive
authority and is responsible for program direction and system architecture and integration.
The Army will operate the system. In addition to fulfilling operational requirements for
limited air defense, the program is also expected to reinforce interoperability of NATO forces
and to reduce the U.S. burden of cost for helping to maintain European defense.
Under the initial May 1996 Memorandum of Understanding, Germany and Italy
committed to fund 25% and 15% of the program, respectively, for the next 10 years.
According to press accounts, Germany and Italy have committed to 45% of the costs, and in
March 1999, DOD asked the Europeans to assume 50% of the costs. R e s p o n d i n g t o
congressional criticism of the program’s costs for FY 2001, Pentagon officials suggested that
Germany and Italy coproduce the Patriot PAC-3 interceptor for incorporation into MEADS.
In April 2000 it was reported that Germany and Italy had tentatively agreed to use the Patriot
rather than a new interceptor, but still plan to develop a new seeker radar. In October 1999,
the U.S. briefly denied the allies access to detailed information on PAC-3 for security reasons.
In late May 2000, U.S. and German officials announced their agreement on a plan to share
PAC-3 missile technology for incorporation into the MEADS program.
In October and December 2000, the German military questioned the number of MEADS
units it would need and whether it could afford them, the German Parliament balked at
approving its share of development costs, and the German government then asked to have the
program restructured to reduce its $22 billion cost, even if that requires reduced capability.
After discussing the costs and objectives of the MEADS with U.S. Army officials and
Secretary of Defense Cohen, German Defense Minister Scharping agreed in early December
2000 to sign an agreement to enter the next phase of the risk reduction effort (RRE). The
three-year RRE will cost about $250 million of which the U.S. will pay 55%, Germany 28%,
and Italy 17%. The agreement was modified to divide German funding and commitment into
three phases to ease the Defense Ministry’s negotiations with Parliament.
For FY2001, the Administration requested $63.2 million for development of MEADS.,
$15 million more than last year’s request. The defense authorization act decreased the
amount by $9.7 million. In 1999, Congress noted the program plans to use PAC-3 missiles
and launchers and modified THAAD battle management and encouraged DoD to consider use
of radars already in development. The increasing unit costs of PAC-3 missiles (approaching
$3million each) could again bring MEADS into question, but additional purchases of PAC-3
will help reduce unit costs.
Since May 1995, MEADS has been at the Project Definition-Validation (PD-V) stage
of research and development. The Lockheed-Martin Corp. and the Hughes Aircraft and
Raytheon Company consortium represented the U.S. partners of two competing international
teams. Alenia of Italy, and European Aeronautic Defence and Space Company (formerly
Daimler-Chrysler Aerospace) of Germany, represent the European group. In May 1999, the
three governments selected the team headed by Lockheed Martin to develop MEADS.
Target production and fielding dates are 2006.
CRS-5

---

IB98028
03-19-01
In May 1996, France rescinded its initial commitment to fund 20% of the MEADS
program. Despite budgetary constraints, however, it is still interested in developing ballistic
missile defense (BMD) capabilities, perhaps an indigenous system. The United Kingdom is
not a participant in the program and to date has taken no official position on BMD. The
Government is, however, concerned about the proliferation of weapons of mass destruction
and is considering options for countering this potential threat. The Netherlands and Turkey
have also considered participating in the joint endeavor.
On October 6, 1998, BMDO announced U.S. and German officials were creating a joint
task force to help coordinate theater missile defense operations within the alliance. This is
one of moves to help achieve an alliance doctrine and acquisition strategy.
Theater High-Altitude Air Defense (THAAD)
The Theater High-Altitude Air Defense (THAAD) is the U.S. Army’s weapon system
designed to destroy non-strategic ballistic missiles before they reenter the atmosphere or in
the upper atmosphere. It uses a single stage, solid propellant rocket and a hit-to-kill
interceptor that is to destroy the target missile with the kinetic energy of impact. Unlike the
lower-tier, short-range systems (Patriot PAC-3, MEADS, and Navy Area Defense), THAAD
is intended to help protect wide areas against missiles and falling debris of missiles and
possible nuclear, biological, or chemical materials. In April 2000, the Pentagon released the
Selected Acquisition report stating the projected costs of THAAD had increased by $898
million to $9.5 billion because of a revised estimating methodology..
THAAD entered the Engineering and Manufacturing Development phase on June 28,
2000 (progressing from the Program Demonstration/Validation phase) and is to be deployed
in 2007. In an accelerated development proposal being studied by the Army in October 2000,
the first THAAD unit equipped could be moved from FY2007 to FY2006. A more advanced
version designed to defeat missiles employing countermeasures is scheduled for 2011. DoD
is relaxing the requirement that THAAD be able to intercept targets both within and outside
the atmosphere, raising the altitude at which it must be able to conduct an intercept.
Earlier technological problems in THAAD’s development jeopardized support for the
system. On August 2, 1999, for the second time, a THAAD missile successfully intercepted
a target missile. The first success was achieved on June 10, 1999 after THAAD had failed in
six previous interceptor flight tests. In those six unsuccessful intercept flight tests, a different
subsystem failed in each test.
After the second successful intercept, Lockheed Martin had submitted a proposal for
moving THAAD into Engineering and Manufacturing Development (EMD) but the Army
Space and Missile Defense Command rejected the proposal in early April 2000 because of
management and testing plan deficiencies. Lockheed Martin responded to the problems, and
the Army later recommended the Defense Acquisition Board (DAB) begin its review of
THAAD advancing to EMD.
Because of concerns that the THAAD and NTW were not being tested against target
missiles with the speed and other characteristics of likely enemy missiles (such as the North
Korean Taep’o-dong 1, Representative Vitter introduced legislation in 1999 (H.R. 2596) that
would require BMDO to use target vehicles with the speed of a Taep’o-dong 1 and to adjust
CRS-6

---

IB98028
03-19-01
program management and consider making adjustments in the characteristics of NTW and
THAAD systems to improve the likelihood of successful intercepts.
In a similar vein, H.R. 4205 requires BMDO to modify its defense systems to be able to
counter ballistic missiles with ranges between 1,500 and 2,500 miles. The HASC report
indicated current TMD systems would be able to counter missiles with ranges of 1240 miles
(2000 km) while North Korea and Iran are both developing missiles with greater ranges.
[In November 2000, Russia demanded the U.S. stop using the Hera target missile in tests
and destroy its stocks, claiming the Hera is a medium range missile banned under the INF
Treaty. Further more they argue, the Hera is based on two stages of the Minuteman-2 missile
and uses the guidance system of the Pershing-2 which were banned.]
The FY1999 Defense Authorization Act, as enacted, required the Secretary of Defense
to conduct competition for the development and production of the THAAD interceptor
missile. It also eliminated the $323,942 requested for engineering and manufacturing
development (EMD) but added nearly $30 million to the demonstration/validation phase to
assist in conducting competition for a developer and producer. The act also directs DoD to
establish appropriate cost sharing with the contractor in case of future flight test failures. The
appropriation bill also eliminated EMD funding and cut funding for the demonstration and
validation phase. In response, DoD planned to evaluate the flight tests of THAAD and those
of NTW in 2002 and to give the bulk of funds from a new upper-tier program element to the
more successful program. Such funding would accelerate the more successful program while
continuing the other program at a slower rate. However, the FY2000 defense authorization
required THAAD and NTW to be funded and managed as separate programs. The bill
reduced THAAD development funds by $83.8 million, and allowed the DoD to proceed to
Engineering and Manufacturing Development (EMD)of THAAD without completing three
successful intercepts. In September 1999, DoD announced a revised plan to develop THAAD
and NTW in parallel, potentially speeding the deployment of both programs.
For FY2001, the Administration requested $549.9 million for THAAD development,
which is planned to move from Demonstration/Validation to Engineering and Manufacturing
Development. The House and Senate Defense Authorization bills and House and Senate
Appropriation bills approved the recommended amount.
NATO countries have agreed to study their need for missile defense in addition to
German and Italian participation in MEADS. Participation in THAAD is a possible outcome,
but European cooperation with the United States in another major acquisition program may
be colored by the progress of MEADS.
Navy Theater Wide Defense
The Navy Theater Wide (NTW) missile defense system, formerly known as Navy Upper
Tier, is in the program Definition and Risk Reduction phase, is scheduled for flight intercept
tests in 2001, and is to have the first ship fully equipped by 2010. NTW will consist of the
Standard Missile-3 carrying the Lightweight Exo-Atmospheric Projectile (LEAP) launched
from Aegis air defense ships. Originally, the Navy was to deploy an initial version (block I)
capable of attacking known medium-range missile threats (such as the Al Hussein, M-9, and
Nodong) during their ascent, mid-course, and descent phases. Later, a Block II missile was
CRS-7

---

IB98028
03-19-01
to be built to defeat new threats. In early 2001, the Navy discarded the block development
program and decided to go to the fully capable system directly. With this change the Navy
planned to shift $121 million in FY 2002 and 2003 from NTW to NAD. Standard Missile and
Lockheed Martin are the primary contractors and Raytheon and UDS are major
subcontractors. In April 2000, the Pentagon released the Selected Acquisition report stating
the projected costs of NTW had increased by $590 million to $5 billion.
The Administration requested $382.7 million for NTW in FY2001. The defense
authorization act (P.L. 106-398) added $80million for NTW consisting of $65 million for the
Standard Missile III and $15 million for the kill vehicle. In 1999 and 1998, Congress also
added funds to the requested amounts for NTW.
Navy witnesses have told Congress NTW could be fielded as early as 2002 if additional
funds are provided and additional risks accepted. A number of advocates, including
Congressmen and Senators, contend NTW should be deployed soon as a national missile
defense. But BMDO officials suggested the risks may be too great, the development time
would be long, and that necessary funds are probably not available. The Wall Street Journal
(April 10, 2000) said a classified Pentagon study concludes a ship-based NMD system is
technically possible. The article asserted, “one country’s TMD is another country’s NMD,”
missing the distinction that TMD protects against slower medium-range theater missiles and
NMD protects against fast intercontinental ballistic missiles. Secretary Cohen said in the
April issue of Seapower that an Aegis sea-based missile defense with significant modifications
could complement the NMD system but the land-based system can be deployed sooner. In
March 2001, the former head of the DoD test office said NTW is not considered a viable
national missile defense option and would not be in the near term (five years). NTW has
failed to intercept a target missile in its two attempts. On January 25, 2001, an Aegis cruiser
successfully flight tested a Standard Missile-3.
In September 1999, the first two stages of NTW were successfully tested. In June 2000,
DoD reported that inadequate materials were causing failures in the complex Divert and
Attitude Control System (DACS) of the kinetic kill vehicle. The DACS has eight thrusters
that propel and guide the warhead to the target but have generated more heat than the system
can withstand. In a flight test on July 14, 2000, the Lightweight Exoatmospheric Projectile
failed to separate from the second stage of the SM-3 Standard launch missile.
The General Accounting Office issued a report on May 31, 2000 (GAO/NSIAD-00-121)
that found that additional funds provided by Congress were used by the Navy to reduce
technical risks and speed development of NTW, but that significant risk still exist. GAO
recommended, “the Navy revise the proposed funding profile and test schedule for the Navy
Theater Wide program to ensure that the Navy can undertake initial operational testing before
producing most of its missiles.”
Airborne Laser (ABL)
Systems Description. Modified Boeing 747-400 aircraft will use a multi-megawatt
laser to destroy missiles within 30 to 140 seconds after launch from a range of 300-600 km
(160-230 nautical miles). At that point the target missile will have climbed to about 38,500
feet and passed through cloud cover, but still be in the ascent stage, often still over enemy
territory, and would not have deployed separating warheads or countermeasures. The Air
CRS-8

---

IB98028
03-19-01
Force is also examining whether ABL could be adapted to defend against sophisticated cruise
missiles.
ABL is budgeted and managed by the Air Force in coordination with BMDO. The
program, which is in the definition and risk reduction phase, calls for production of seven
aircraft with lasers by 2008 — three may be in service by 2006. Twenty-year costs for
development, production, operations and support of the fleet are estimated at $11 billion.
Boeing won a contract to build a prototype aircraft, TRW will develop the chemical oxygen-
iodine laser, and Lockheed Martin will develop the laser beam control system. In September
2000, the first Boeing 747-4000 reached the midpoint of the modification program and is
scheduled to be completed in 2002. The system will attempt to down a missile in 2003.
For FY2001, the Air Force requested $148.6 million for ABL, less than half the amount
requested and approved last year. An Air Force official said the cut would delay the program
several years. The defense authorization act (H.R. 4205, P.L. 106-398) added $85 million
and requires BMDO to approve any major changes to the Air Force’s Airborne Laser
program and to report to Congress an assessment of the program. (The House bill had
originally called for shifting the ABL program to BMDO because the Air Force had tried to
cut funding.) The appropriation bill (H.R. 4576, P.L. 106-259) approved the requested
amount. In January 2001, the Air Force announced it would seek congressional approval to
transfer an additional $38 million in FY 2001 funds to ABL. Additionally, the three
contractors each agreed to use $20 million of their own funds, to be reimbursed next year.
This additional $98 million is reportedly needed to prepare for the lethal demonstration in
2003.
A General Accounting Office study concluded that the Airborne Laser may encounter
air turbulence four times greater than anticipated, may not be able to measure turbulence
accurately and fire the laser beam successfully through the turbulence, and therefore may be
ineffective against enemy missiles (GAO/NSIAD-98-37, October 1997). At the time, some
DoD officials said they may not be able to modify the ABL to overcome the effects of
turbulence. An Air Force witness testified before the Senate Appropriations Committee in
March 1998 that the program has demonstrated the ability to predict turbulence and adjust
for it. But a report on the system by the Defense Department’s Director of Operational Test
and Evaluation said in March 1998 that turbulence and countermeasures may force the ABL
to approach closer to the target and to enemy air defenses to be effective. The report also
indicated the program would be challenged in stabilizing the optics and lasing subsystems.
Regional Theater Missile Defense Options
NATO TMD Cooperation. In addition to MEADS, which the United States,
Germany, and Italy are co-developing, in July 1999 NATO began studying the feasibility of
developing a low-to-high altitude TMD employing ground stations, ships, aircraft, and
satellites. NATO officials predict ship-based defense against low-level missiles will be
available within a couple of years. In June 2001, NATO is to decide on two$13.5 million, 18-
month contracts to study the feasibility of a multilateral layered TMD system and examine
costs, risks, timing, and types of systems that might be used. In 2004 NATO should be ready
to select a TMD system for deployment, and it could be fielded by 2010. NATO countries
are generally less interested in high-altitude missile defense although the United States is
encouraging its allies to acquire such systems.
CRS-9

---

IB98028
03-19-01
The U.S. Navy in the fall of 2000 is encouraging international partners, in addition to
Japan, to cooperate in the development and production of a future maritime missile defense
system. Three multinational groups are developing the Evolved Sea Sparrow, the Aster 1,
and the Principal Anti-Air Missile System, which could provide NATO ships protection
against aircraft and missile attacks. Germany, the Netherlands, Italy, and Canada meet
quarterly with the U.S. in a Maritime TBMD Forum.
The Israeli “Arrow” and Regional Defense. The Arrow Anti-Tactical Ballistic
Missile (ATBM) system was jointly funded and developed by the United States and Israel,
with the requirement to demonstrate a theater missile defense system capable of intercepting
Scud B, Scud C, and SS-21 Scarab short range ballistic missiles, and hopefully the Iraqi Al-
Hussein and the longer range Chinese CSS-2 missiles that are currently deployed in Saudi
Arabia. The Arrow II, which was declared operational in October 2000, is believed to have
a maximum intercept altitude of 50 km, with a maximum range of 90 km, and a speed of just
under 3 km per second. The system also includes the Green Pine early warning and target
acquisition system that was developed by an Israeli Aircraft Industries subsidiary, and the
Citron Tree fire-control and battle management system developed by Tadiran. In December
2000, Israel Aircraft Industries selected Boeing to coproduce Arrow in the United States.
The FY2001 U.S. budget request includes $81.2 million for Israeli cooperative missile
defense projects which support continued acquisition of a third Arrow battery. In the
authorization act, Congress added $8 million for the Arrow System Improvement Plan (ASIP)
which is intended to develop a defense against missiles such as the Shahab 3 that has a range
of about 1500 km (930 miles). In mid-November 2000, the Administration requested a $750
million supplemental appropriation to support Middle East Peace. The package included
$200 million for Israeli defense systems such as Arrow II, boost phase intercept, and radar
aircraft. In December 2000, the U.S. and Israel signed a memorandum of agreement covering
the first year of the ASIP in which a feasibility study will examine the technological
improvements needed. This first phase will cost $16 million; the total ASIP will run through
FY 2007 and cost about $380 million. Israel is expected to request an additional $700 million
in March 2001 for work over the next five years on Arrow and on a system to attack missile
launchers with an unmanned aerial vehicle.
Israel is also developing a Boost-Phase Intercept (BPI) system which will intercept
missiles shortly after they have been launched. The BPI employs an unmanned aerial vehicle
that fires a modified air-to-air missile at the ascending ballistic missile. Israel decided not to
develop BPI as a joint program with the United States. Another new concept is being
referred to as Pre-Launch Intercept (PLI) or Boost Phase Launcher Intercept (BPLI) which
could be designed to detect and destroy ballistic missile launchers. The BPLI also reportedly
involves Israeli unmanned aerial vehicles that could hover over enemy territory, identify and
strike missile launchers with heat seeking air-to-surface missiles. Israel has sought U.S.
political and financial support to develop the BPLI but was turned down because U.S.
officials said it did not qualify as a missile defense program and some in Congress thought it
could not work without good intelligence. (Jane’s Defence Week, July 26, 2000: 28)
In April 1999, Moshe Arens, then Israeli Minister of Defense, suggested the Arrow may
be used to provide protection not only for Israel but for Turkey, Jordan, and the Palestinian
Authority as well. Identifying the threat as a “serious regional problem,” Arens said the
Arrow’s range is sufficient to protect Jordan. However, a Jordanian official reportedly stated
CRS-10

---

IB98028
03-19-01
that Amman has never expressed any interest in the Arrow, and does not plan to engage in
regional defense with Israel. Also, a representative for the Palestinian Authority reportedly
discarded the idea.
Turkey has expressed an interest in acquiring the Arrow, however, Israel is restricted
from transferring the Arrow system because of the U.S. role in funding and developing the
system. Israel could export some of the technologies associated with the project, but only
with prior U.S. agreement. Turkey and Israel have signed a memorandum of understanding
to study the Turkish need for an ATBM. system. Turkey is also interested in PAC-3.
However, Turkey apparently see the missile threat as a long-term concern and currently has
higher defense priorities. The U.S. hosted a meeting on TMD with Israel and Turkey in late
November 2000.
Gulf Cooperation Council Theater Missile Defense. In 1997, the defense
ministers of the Gulf Cooperation Council (GCC) states agreed on a collective purchase of
a $500 million ground-based early warning system that would link the GCC states’ radars and
communication systems. More recently, the Clinton Administration has been promoting
further cooperation through the deployment of a GCC-wide theater missile defense (TMD)
system to counter the threat of increasing Iranian ballistic missile capabilities and of any
missiles retained by Iraq. (See CRS Report RL30093, The Persian Gulf: Issues for U.S.
Policy, 1999, by Kenneth Katzman.) In his October 1998 visit to the Gulf, Secretary of
Defense William Cohen, told the GCC states that it was “imperative” that they cooperate with
Washington in the funding of the TMD system in order to counter the mentioned threats.
While Secretary Cohen described the GCC response to his proposal as “quite positive
so far”, the Gulf states are somewhat mistrustful of each other and have preferred to buy
whole systems individually rather than collectively. Criticism over Cohen’s statement came
from France, whose Defense Minister stated that a TMD system would serve as an incentive
for the development of more advanced missiles by other states, and would only escalate the
arms race in the region.
East Asia Theater Missile Defense. In the FY1999 National Defense
Authorization Act (P.L. 105-261, H.R. 3616, sec. 1533), Congress required the
Administration to study “the architecture requirements for the establishment and operation
of a theater missile defense system in the Asia-Pacific region” and report the results to
Congress. The Department of Defense submitted a classified report in February and an
unclassified report in May 1999. The unclassified report stated the number of theater missile
defense units (similar to THAAD, NTW Phase I and II, NA, and PAC-3) would be required
to defend Japan, the Republic of Korea, and Taiwan. It did not discuss the implications of
such TMD deployments, did not discuss boost phase intercept programs, and did not discuss
the ability of TMD systems to overcome enemy countermeasures or to destroy long range
ballistic missiles. (See CRS Reports RL 30379 and 97-391.)
Issues for Congress
Among the significant issues in congressional consideration of TMD have been program
funding (amounts committed for long-term spending and annual budgets), the pace of
development and schedules of deployment, redundancy among the programs, any restrictions
that the ABM Treaty may apply to TMD, and systems management. Of the several TMD
CRS-11

---

IB98028
03-19-01
programs, THAAD and Navy Theater Wide systems have received the most congressional
attention. MEADS has been the most vulnerable to budget cuts.
TMD Funding. Congress has long been dissatisfied with the Clinton Administration
funding of theater missile defense and has regularly approved additional funds. NTW has
received the most frequent increases. Congressional support for THAAD has fluctuated with
the failures and successes of the program. In the late 1990s, Congress cut funds for ABL and
MEADS, but in the FY2001 act it restored funds for ABL that the Air Force had cut.
Pace of Development and Schedules of Deployment. Several Members of
Congress have criticized DoD’s theater missile defense program, as well as the national
missile defense program, for not developing more quickly. Congress has approved funds,
sometimes more than those requested by DoD, to help speed particular programs.
BMDO and two other Pentagon offices sponsored an independent study of the risks of
the flight test programs of four hit-to-kill systems: THAAD, PAC-3, AEGIS LEAP
Interceptor of NTW, and the National Missile Defense program. The study group, led by
former Air Force Chief of Staff, General Larry Welch, reported on February 27, 1998.
Among its major findings was the conclusion that the perceived urgency of the need for
THAAD and LEAP, “has led to high levels of risk that have resulted in delayed deployments
because of failures in their developmental test (DT) programs.” Failures “were typically
caused by poor design and fabrication, inadequate ground checkout discipline, and pressures
to move on to the next step.” Lt. Gen. Lester Lyles admitted that the fast-paced testing
program, dubbed by the study group as “rush to failure,” had deviated from a standard of
rigorous testing and evaluation. The group recommended the test schedule be less aggressive
— more realistic — and that ground testing be used to resolve as many issues as possible
before using test flights for verification.
Redundancy of TMD Systems. Members have questioned whether there is too
much redundancy in TMD such as the MEADS, Patriot PAC-3, and HAWK ground-based
lower tier systems. BMDO officials contend that all six TMD systems under development,
and research on advanced technology are needed to provide adequate missile defense
throughout a theater of operation. Although the Army has said it needs MEADS and DoD
values the program as an example of international cooperation, Army officials have not
wanted to reduce their other acquisition programs to fund MEADS. In August 2000, George
Schneiter, Director for Strategic and Tactical Systems at DoD, said the Pentagon does not
have enough money for all the TMD programs and that only the mature programs should
continue.
ABM Treaty Implication. The United States negotiated demarcation agreements with
Russia to determine when a ballistic missile defense would be governed by the limits in the
1972 Anti-Ballistic Missile Treaty and when a system, such as a theater missile defense, would
not be governed by it. The United States also signed a multilateral agreement extending the
treaty to four successor states of the Soviet Union. Administration officials state the
demarcation agreements clarify that U.S. TMD systems do not qualify as ABMs and are not
governed by the treaty. The interceptors of most U.S. TMDs will not be tested at a velocity
that exceeds 3.0 kilometers/second and are therefore, according to the first demarcation
agreement, not governed by the treaty limits as long as they are tested against target missiles
with velocities below 5 kilometers/second and at ranges below 3,500 kilometers. The Navy
CRS-12

---

IB98028
03-19-01
Theater Wide defense, and any future TMD with interceptors tested at velocities greater than
3 kilometers/second are addressed by the second demarcation agreement. These too cannot
be tested against target missiles with velocities of 5 kilometers/second or more and ranges of
3500 kilometers or more. Each country must determine whether such TMD systems are
tested “in an ABM mode,” and therefore covered by the treaty limits. The Clinton
Administration has already said Navy Theater Wide is ABM Treaty compliant and not
covered by its limits. The FY2001 authorization act requires the Director of BMDO to
develop a plan to adapt missile defense systems to be able to counter “longer range medium-
range and intermediate-range ballistic missiles.” (P.L. 1-6-398, sec 233) (See also CRS
Report 98-496, Anti-Ballistic Missile Treaty Demarcation and Succession Agreements:
Background and Issues, by Amy Woolf.)
Table 2. Theater Missile Defense Funding
($ in millions)
Program
FY1999
FY2000
FY2001
Estimate
Request
Procurement
TMD-BM/C3
22.5
0.0
3.9
Patriot PAC-3
187.4
343.8
365.5
Navy Area
42.7
18.1
0.0
Total Procurement
252.6
361.9
369.4
Research, Development, Test, and Evaluation (RDT&E)
THAAD, Dem/Val
431.9
602.9
549.9
THAAD, EMD
0.0
83.8
0.0
Navy Area, EMD
241.9
307.3
274.2
Navy Theater Wide, Dem/Val
366..3
375.8
382.7
MEADS, Dem/Val
11.7
48.6
63.2
Patriot PAC-3, EMD
237.3
179.1
81.0
Boost Phase Intercept, Dem/Val
6.4
0.0
0.0
Family of Systems
94.4
145.7
231.2
Joint TMD, Dem/Val
204.2
196.6
0.0
BMD Technical Operations
187.2
214.4
270.7
Other Programs
88.1
105.9
144.4
Total RDT&E
1,789.4
2,260.1
1,997.0
Military Construction
0.3
1.4
1.9
Total Theater Missile Defense-BMDO
2,042.3
2,623.4
2,368.3
U.S. Air Force Airborne Laser
253.9
304.2
148.6
U.S. Army JLENS
13.0
24.9
25.1
CRS-13

---

IB98028
03-19-01
Program Management. The missile defense program, particularly the TMD testing
program, has been criticized in Congress and the press. To respond to these criticisms,
General Lyles, former Director of BMDO, described to Congress a number of management
initiatives. BMDO developed a Strategic Plan to focus its efforts toward the successful
development, deployment, and follow-on initiatives for NMD and TMD. The centrally
organized agency has the mission of developing missile defense systems that are interoperable
for all U.S. forces and can also be used to defend friends and allies. BMDO adopted nine
Mission Essential Tasks, with implementation plans, to measure its performance, and is
committed to complying with the Defense Reform Initiatives. It also created a Systems
Architecture and Engineering Board, Planning and Resource Board, and a Management
Review Team to review all aspects of its operations. General Lyles also instituted the use of
Cost as an Independent Variable to guide the acquisition process. The process is
complicated by the fact that, under BMDO guidance, all services are involved in the
acquisition of several different but related weapon systems. In December 1999, Lt. Gen.
Ronald Kadish, BMDO Director, announced a new flattened organizational structure. He
eliminated a layer of managers and now has 16 deputies report directly to him.
106th Congress Legislation
P.L. 106-259, H.R. 4576
Department of Defense Appropriations Bill, FY2001. Appropriates funds for defense
programs including missile defense. Reported as an original bill June 1, 2000 ( S. 106-644);
amended and passed by the House on June 7 (367 - 58); received in the Senate on June 8; the
Senate struck all after the enacting clause and substituted the language of S. 2593; Senate
considered on June 9, 12, and 13 and passed with amendment on June 13 (95 - 3); conference
report (H.Rept. 106-754) was filed on July 17; on July 17 the House agreed to the conference
report (367-58); the Senate agreed on July 27 (91-9); signed into law August 9, 2000 (P.L.
106-259).
P.L. 106-398, H.R. 4205
Defense Authorization Bill for FY2001. Authorizes appropriations for defense
programs, including theater missile defense. Introduced by request and referred to Committee
on Armed Services April 6, 2000; reported May 12 (H.Rept. 106-616); considered May 17
and 18 and passed by the House May 18, 353-63; on July 13 the Senate substituted the
language of S. 2549, passed the bill amended by a vote of 97-3; on October 6, the conference
committee issued its report (H.Rept. 106-945); on October 11, the House approved the
conference report; Senate approved the report on October 12; the President signed the act
on October 30, 2000
H.R. 1838 (DeLay)
Taiwan Security Enhancement Act. As introduced on May 18, 1999, the President
would have been authorized, among other things, to make TMD equipment and satellite early
warning data available for sale to Taiwan. As reported October 28, 1999 (H.Rept. 106-423),
the bill makes no specific mention of TMD systems or early warning data. Passed House
February 1, 2000, by a vote of 341 to 70, and sent to Senate. Read in the Senate on April 12
and 13 and placed on the Legislative Calendar.
CRS-14

---

IB98028
03-19-01
H.R. 2596 (Vitter)
Realistic Tests for Realistic Threats National Security Act of 1999. Requires BMDO
to conduct intercept tests of NTW and THAAD against target missiles with velocities not less
than that of North Korea’s Taep’o-dong 1 missile. It would also direct BMDO to review
changes to NTW and THAAD that would increase their interceptor speed well beyond 3
km/sec. and would use targeting data from external sources including satellite sensors.
Introduced July 22, 1999 and referred to Committee on Armed Services; subsequently
referred to the Subcommittee on Military Research and Development.
S. 693 (Helms)
Taiwan Security Enhancement Act. Among other things, authorizes the President to
make TMD equipment and satellite early warning data available for sale to Taiwan.
Introduced March 24, 1999; referred to Committee on Foreign Relations; hearing held August
4, 1999.
S. 2549 (Warner)
Authorizes appropriations for defense programs for Fiscal Year 2001, including theater
missile defense. Introduced and reported May 12, 2000 (S.Rept. 106-92); the Senate
incorporated the bill into H.R. 4205.

S. 2593 (Stevens)
Department of Defense Appropriations for Fiscal Year 2001. Appropriates funds for
defense programs, including theater missile defense. Original bill reported May 18, 2000
(S.Rept. 106-298); the Senate incorporated the bill into H.R. 4576 as an amendment.
CRS-15

---