[House Hearing, 105 Congress]
[From the U.S. Government Publishing Office]



             DEPARTMENT OF DEFENSE APPROPRIATIONS FOR 1999

_______________________________________________________________________

                                HEARINGS

                                BEFORE A

                           SUBCOMMITTEE OF THE

                       COMMITTEE ON APPROPRIATIONS

                         HOUSE OF REPRESENTATIVES

                       ONE HUNDRED FIFTH CONGRESS
                             SECOND SESSION
                                ________
                    SUBCOMMITTEE ON NATIONAL SECURITY
                   C. W. BILL YOUNG, Florida, Chairman
 JOSEPH M. McDADE, Pennsylvania      JOHN P. MURTHA, Pennsylvania
 BOB LIVINGSTON, Louisiana           NORMAN D. DICKS, Washington
 JERRY LEWIS, California             W. G. (BILL) HEFNER, North Carolina
 JOE SKEEN, New Mexico               MARTIN OLAV SABO, Minnesota
 DAVID L. HOBSON, Ohio               JULIAN C. DIXON, California
 HENRY BONILLA, Texas                PETER J. VISCLOSKY, Indiana        
 GEORGE R. NETHERCUTT, Jr., 
Washington
 ERNEST J. ISTOOK, Jr., Oklahoma
 RANDY ``DUKE'' CUNNINGHAM, 
California                          
          
 NOTE: Under Committee Rules, Mr. Livingston, as Chairman of the Full 
Committee, and Mr. Obey, as Ranking Minority Member of the Full 
Committee, are authorized to sit as Members of all Subcommittees.
    Kevin M. Roper, David F. Kilian, Alicia Jones, Juliet Pacquing, 
 Gregory J. Walters, Patricia Ryan, Doug Gregory, Paul W. Juola, Tina 
                        Jonas, Steven D. Nixon,
         David L. Norquist, and Betsy Phillips, Staff Assistants

       Jennifer Mummert and Sherry L. Young, Administrative Aides
                                ________
                                 PART 3
                                                                   Page
 Personnel Quality of Life Issues.................................    1
 Medical Programs.................................................  149
 Readiness of United States Forces................................  337
 Fiscal Year 1998 Supplemental Appropriations for Bosnia and 
Southwest Asia....................................................  543
                                ________

         Printed for the use of the Committee on Appropriations

                                ________
                     U.S. GOVERNMENT PRINTING OFFICE
 77-499                     WASHINGTON : 2002





                     COMMITTEE ON APPROPRIATIONS

                   BOB LIVINGSTON, Louisiana, Chairman

 JOSEPH M. McDADE, Pennsylvania      DAVID R. OBEY, Wisconsin
 C. W. BILL YOUNG, Florida           SIDNEY R. YATES, Illinois
 RALPH REGULA, Ohio                  LOUIS STOKES, Ohio
 JERRY LEWIS, California             JOHN P. MURTHA, Pennsylvania
 JOHN EDWARD PORTER, Illinois        NORMAN D. DICKS, Washington
 HAROLD ROGERS, Kentucky             MARTIN OLAV SABO, Minnesota
 JOE SKEEN, New Mexico               JULIAN C. DIXON, California
 FRANK R. WOLF, Virginia             VIC FAZIO, California
 TOM DeLAY, Texas                    W. G. (BILL) HEFNER, North Carolina
 JIM KOLBE, Arizona                  STENY H. HOYER, Maryland
 RON PACKARD, California             ALAN B. MOLLOHAN, West Virginia
 SONNY CALLAHAN, Alabama             MARCY KAPTUR, Ohio
 JAMES T. WALSH, New York            DAVID E. SKAGGS, Colorado
 CHARLES H. TAYLOR, North Carolina   NANCY PELOSI, California
 DAVID L. HOBSON, Ohio               PETER J. VISCLOSKY, Indiana
 ERNEST J. ISTOOK, Jr., Oklahoma     ESTEBAN EDWARD TORRES, California
 HENRY BONILLA, Texas                NITA M. LOWEY, New York
 JOE KNOLLENBERG, Michigan           JOSE E. SERRANO, New York
 DAN MILLER, Florida                 ROSA L. DeLAURO, Connecticut
 JAY DICKEY, Arkansas                JAMES P. MORAN, Virginia
 JACK KINGSTON, Georgia              JOHN W. OLVER, Massachusetts
 MIKE PARKER, Mississippi            ED PASTOR, Arizona
 RODNEY P. FRELINGHUYSEN, New Jersey CARRIE P. MEEK, Florida
 ROGER F. WICKER, Mississippi        DAVID E. PRICE, North Carolina
 MICHAEL P. FORBES, New York         CHET EDWARDS, Texas
 GEORGE R. NETHERCUTT, Jr.,          ROBERT E. (BUD) CRAMER, Jr., 
Washington                           Alabama                            
 MARK W. NEUMANN, Wisconsin
 RANDY ``DUKE'' CUNNINGHAM, 
California
 TODD TIAHRT, Kansas
 ZACH WAMP, Tennessee
 TOM LATHAM, Iowa
 ANNE M. NORTHUP, Kentucky
 ROBERT B. ADERHOLT, Alabama        
          
                 James W. Dyer, Clerk and Staff Director

                                  (ii)

 
             DEPARTMENT OF DEFENSE APPROPRIATIONS FOR 1999

                              ----------                              

                                         Wednesday, March 18, 1998.

                    PERSONNEL QUALITY OF LIFE ISSUES

                               WITNESSES

ROBERT E. HALL, SERGEANT MAJOR OF THE ARMY, U.S. ARMY
JOHN HAGAN, MASTER CHIEF PETTY OFFICER OF THE NAVY, U.S. NAVY
LEWIS G. LEE, SERGEANT MAJOR OF THE MARINE CORPS, U.S. MARINE CORPS
ERIC W. BENKEN, CHIEF MASTER SERGEANT OF THE AIR FORCE, U.S. AIR FORCE

                              Introduction

    Mr. Young. The Committee will come to order. This morning's 
hearing will be in open session with the senior enlisted 
advisors from each of the services.
    We are very pleased to welcome Sergeant Major of the Army 
Robert E. Hall of the United States Army; Master Chief Petty 
Officer of the Navy, John Hagan--and, Chief, we understand that 
you are retiring next week after some 5\1/2\ years in this job 
and 30-some years in the service. Congratulations, and best 
wishes for whatever course your future takes. We have always 
been happy to have you here at this Committee.
    Also Sergeant Major Lewis G. Lee of the Marine Corps; and 
Chief Master Sergeant of the Air Force Eric W. Benken.
    Today's witnesses represent the 1.2 million enlisted 
personnel who comprise the vast majority of our military 
forces, in fact, over 84 percent of our active duty military. 
Both the Department of Defense and the Congress place a high 
priority on the quality of its men and women in uniform, and in 
achieving a decent quality of life for its service members and 
their families. Pay and compensation, health care, and 
personnel and operations tempo are a few of the many issues 
that are important to the military member and his or her 
family.
    We are pleased to see the President's budget proposes a 3.1 
percent pay increase. However, the Committee remains concerned 
about retention rates, continued temporary duty deployments, 
problems with medical treatment and access to care, and also 
the state of barracks and family housing.
    We are very concerned about stretching our military forces 
too thin. With the recent buildup of forces in Southwest Asia 
and the President's decision to extend the Bosnia mission 
beyond June of 1998, the Committee is concerned that this tempo 
of operations is impeding normal training and everyday 
operations.
    For example, the Army averages in a year more than 30,000 
soldiers deployed in over 70 countries; the Navy has over 150 
ships and submarines underway with approximately 60,000 sailors 
and Marines forward deployed; and the Air Force has 
approximately 15,000 troops deployed around the world. We are 
concerned that even though the military has done a superb job 
in sustaining high tempo operations over extended periods of 
time, that this pace just cannot be maintained.
    We are especially concerned about the following personnel 
issues and hope to discuss these and others with you today.
    First, the Department's ability to attract quality recruits 
to enter the military services and keeping them in the force;
    Second, the state of overall readiness, given the increase 
in personnel tempo and deployments overseas and the effect this 
has on morale, retention and success of the military mission;
    Third, the difficulty of providing a reasonable quality of 
life to service members and their families, given the amount of 
Defense resources available; and
    Finally, your observations regarding the availability and 
quality of health care, barracks and family housing for our 
young enlisted.
    Gentlemen, we have received and read your prepared 
statements and have placed them in the record, and we would ask 
you to summarize your statements for the Committee, and then we 
will have some interesting questions for you.
    Before we do that, I would like to yield to Mr. Dicks.
    Mr. Dicks. Thank you, Mr. Chairman. I want to welcome our 
witnesses today. We are looking forward to your testimony, and 
we appreciate the great leadership you provide in each of the 
services. Thank you.
    Mr. Young. Thank you, Mr. Dicks. Sergeant Major Hall, we 
are to hear from you first, sir.

                Summary Statement of Sergeant Major Hall

    Sergeant Major Hall. Mr. Chairman, distinguished members of 
the Committee, good morning. I am indeed honored and privileged 
to appear before you today to discuss quality-of-life issues 
and to speak on behalf of our Army, our soldiers, and their 
families.
    First of all, sir, I would just like to thank you for your 
continued interest and support. We very much appreciate 
everything you do to help us enhance the morale of our 
soldiers. They do remain very busy; deployments have not eased 
during the past year.
    Today, we have 100,000 soldiers forward stationed overseas 
and almost 33,000 more deployed away from their home stations 
in 81 countries. These soldiers are keeping the peace in 
Bosnia, deterring Iraqi aggression in Southwest Asia, as well 
as supporting local authorities, following hurricanes, floods, 
ice storms, and numerous other catastrophes. In fact, they have 
accomplished every mission this Nation has demanded of them in 
every part of the world.
    Sir, during the past five months--since I was appointed as 
the 11th Sergeant Major of the Army and indeed throughout my 30 
years in the service--I have talked to soldiers deploying, 
those preparing to deploy, those returning from deployment, or 
those just doing their job every day. I will tell you that 
these soldiers don't expect to become wealthy. They just want 
to ensure an adequate standard of living for themselves and for 
their families.
    They believe that their leadership is committed to 
providing them an adequate quality of life, and we as leaders 
know that the strength of our Army lies in the quality of our 
soldiers. They are first-class Americans, and we need them.
    I am heartened they have not lost the faith. They trust 
their Army, they trust their leaders, and they trust themselves 
to do what is right. But these soldiers do have concerns, and 
these concerns run the full spectrum of quality-of-life issues. 
In fact, if you asked me to list the top four concerns of my 
soldiers today, I would tell you that soldiers worry about pay 
and entitlements, housing, medical care for themselves, but 
especially for their families, and a stable retirement system.
    We know that we must take care of our soldiers. We also 
know that we need to take care of the families, because family 
members have a tremendous influence over a soldier's decision 
to leave or to stay in the Army. It really is true that we 
enlist a soldier, but we reenlist a family. We very much 
appreciate your help, and I ask for your continued assistance 
to provide for our Army and our soldiers.
    I am very proud to represent those young men and women. 
They are great soldiers; they are trained, and motivated; and 
they are dedicated to their country.
    Sir, let me just close by saying that I consider myself 
very lucky to have the honor and the privilege of representing 
my soldiers today, and I welcome your questions.
    [The statement of Sergeant Major Hall follows:]

              [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]



                          Remarks of Mr. Young

    Mr. Young. Sergeant Major, thank you very much. I wanted to 
make just a brief comment for all of you that the members of 
this Committee are quite aggressive in visiting our troops in 
the continental United States as well as overseas. I have to 
tell you that it is terribly impressive to visit with these 
young people and to see what they have to say about their 
mission, about their feeling of responsibility for the role 
that they play in that mission.
    Some of us just got back from Bosnia a few days ago, and a 
lot of them would rather be home, but they understand the 
importance of their being there. I have to tell you, this makes 
you really proud of all of these young men and women.
    I hope, if you get a chance, you will relay that to all of 
the members of your service to let them know how much we 
appreciate and admire and respect them.
    Master Chief Petty Officer Hagan, for your final appearance 
before this Committee, at least in this status, we are happy to 
hear from you at this time.

         Summary Statement of Master Chief Petty Officer Hagan

    Master Chief Petty Officer Hagan. Thank you very much, sir. 
Mr. Chairman, Members, I thank you for the privilege of 
appearing before you. I have enjoyed it and appreciated it over 
the 5\1/2\ years in the job, immensely.
    I must add, before I make my brief opening comments, that I 
appreciate in this particular subcommittee that the 
professional staff extends courtesies that are gratefully 
received; and I appreciate very much the staff prebriefing and 
all the help that I have always received in every trip over 
here, especially before this Committee.
    I believe strongly we can analytically prove your Navy is 
currently stronger than it ever has been. It is forward 
deployed, on station, expeditionary in the truest, purest sense 
of the word. Today, I hope that I will receive questions on the 
many issues that my anxieties for the future are centered 
around.


                           PAY AND ALLOWANCES


    I have a strong steady opinion on, for example, the flat 
pay raise proposal versus the traditional kind of a pay raise, 
and I hope that we can receive questions about that. I believe 
we need to implement the new pay chart developed by the Eighth 
QRMC, which eliminates pay inversion and rewards upward 
mobility more than longevity. I believe there are extremely 
important compensation issues facing the armed forces as a 
whole, and the Navy particularly.
    For example, sir, I have written into my submitted 
statement an opinion about the dramatic need to adjust career 
sea pay for inflation. This is a Navy-specific, Navy-unique 
issue, and it is going to be necessary to address it in the 
near term in order to meet retention and readiness issues.
    In the quality-of-life spectrum, we in the Navy must take 
better care of--and we need your help to do it the first-term 
junior Sailor who is required to live on the ship. They are 
unique in all the armed forces, and their quality of life has 
been neglected as we focused on the married issues, and perhaps 
rightly so, in years past, but their time has come and is 
overdue.


                          TEMPO OF OPERATIONS


    The overarching issue for me is OPTEMPO/PERSTEMPO, but I 
must emphasize I come to you with no complaints. The Navy is 
about deploying. It is why we exist. It is what we do, and 
sailors are proud of the sacrifices which accompany deploying. 
But deployment has a cost, and in my personal view that cost is 
rapidly escalating in the United States Navy.
    Sixty percent of the Navy on a given day is underway, 60 
percent of a smaller Navy. It approaches 60 percent, with 30 
percent of that number of ships forward deployed for 6-month 
deployments. Our OPTEMPO/PERSTEMPO parameters of 6-month 
deployments, a 2-to-1 turnaround ratio, and a certain number of 
days pierside in the inner deployment cycle is, in fact, the 
minimum which we must meet in order to be able to operate over 
the near term; and we are operating on the fringes of that 
minimum.
    The budgetary issues that I see my leadership striving to 
meet daily mean that parts dollars and training dollars and 
manpower dollars and so many other vitally important programs 
are competing for the same scarce dollars.


                                SUMMARY


    Today, though, I will conclude by telling you we are strong 
and ready, but there is a certain amount of can-do that is 
keeping us ready, a can-do that is always difficult, 
occasionally burdensome, and sometimes approaches the heroic, 
but it keeps us ready.
    I have some near-term retention anxieties, but I must 
return to the positive and conclude with a sincere statement of 
gratitude for the wisdom and foresight of this Congress in 
allowing us to downsize in a generous, even absolutely 
unexpected, wise way. We in the Navy made not one involuntary 
separation from the career force during that downsizing. While 
we were downsizing, a period of time that Sailors might have 
thoughtfully expected quality-of-life growth to stop and 
perhaps even to take premeditated cuts in those areas, we saw 
gains.
    I have to tell you I recognized that the entire time I have 
been in the job. I have been grateful for it every day. I am 
grateful for it today as I make my final appearance. And I look 
forward to responding to your questions, sir.
    Mr. Young. Master Chief, thank you very much. We appreciate 
your being here today. As I said, we wish you good luck in your 
future endeavors.
    [The statement of Master Chief Petty Officer Hagan 
follows:]

              [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]




    Mr. Young. Sergeant Major Lee, we will be happy to hear 
from you at this time, sir.

                Summary Statement of Sergeant Major Lee

    Sergeant Major Lee. Mr. Chairman and Committee members, I 
too want to express my gratitude for what you have provided to 
our servicemen in the past, and I know you will do your very 
best for them in the future.
    Today I have 23,000 Marines--23,400 actually--forward 
deployed. I want you to know those Marines are well-trained, 
well-led and well-equipped, and they are capable of doing 
whatever it is you need them to do.
    When they return, it is a little bit different. They will 
return from being deployed, and if they are married and have 
families, they will be with their families at night. But the 
requirements they will face in maintaining aging equipment will 
take away a lot of the time that you would think that someone 
returning from a deployment would have to spend with their 
families and friends. However, they will do what has to be 
done, and, for the most part, they will do it without 
complaining.


                        RECRUITING AND RETENTION


    We are a young, first-term organization. Of our fighting 
men and women, we have 107,902 that serve on one contract of 4 
years or less. We recruit about 40,000 men and women a year to 
come into our Marine Corps. I am proud to say we are meeting 
our numbers in both quality and quantity. It is a tremendous 
stress on the recruiting force that we have out there. We have 
among our very best Marines recruiting. They are doing what has 
to be done. It is getting tougher, but they are making their 
mission.
    I am proud to say that I don't have a retention problem. I 
credit that because of the way we are organized and the way we 
are structured. Again, I have a large availability of first-
term Marines. Many of them, of course, only want to do one term 
in the Marine Corps. Many of them can only do one term in the 
Marine Corps. Therefore, I have a unique situation, and I 
recognize that.
    Having said that, I am very proud of my small career force 
and the fact that they stay with us, deploy, work hard, do the 
things that have to be done to maintain our Corps as an 
institution and provide for the country. Again, they too do it 
for the most part without complaint.
    Echoing what the Master Chief was saying about the flat pay 
raise, I am particularly interested in the pay raise that all 
Marines receive. I appreciate any effort to help anybody, but I 
do not support any effort to help any one particular category 
of my enlisted force. I remind you again, that my Marines who 
serve the longest sacrifice the most over the longest period of 
time, and they deserve as much or more than those who only 
serve for a short period of time. That is my professional 
opinion.

                          TEMPO OF OPERATIONS

    Deployment and personnel tempo is not a problem for us. As 
the Master Chief said, we exist to be forward deployed; that is 
why we are, that is what we teach our people, and that is what 
we remind them of every time they raise their hands for four or 
five more years of service. We make sure they understand what 
the Marine Corps is, what our resources are, and they will 
continue to do what they had to do in the past, whether they be 
a lance corporal with two years of service, or a sergeant major 
like myself with 25 years of service.
    Again, they don't complain about that. That is what they 
sign on for.

                                SUMMARY

    I am going to close this out real fast, because I wanted to 
get to the questions and answers, by simply saying to you that 
we as an institution will do whatever has to be done, and we 
will maintain our readiness and capability on what this 
committee and Congress as a whole can provide to us. I 
guarantee you that.
    But we have needs above and beyond what is programmed for 
us in the upcoming year and, frankly, in the outyears also. I 
am sure you are already aware of this. I know my Commandant and 
the other people that come in here and testify can give you, 
and have given you, the details of what our needs are.
    But having said that, I want you all to understand that as 
a Corps of Marines and as an institution that does what has to 
be done for our country, we will. We will be ready, relevant 
and capable, regardless of the outcome of what the program is 
for 1999 or the future.
    Thank you, sir.
    Mr. Young. Sergeant Major, thank you very much.
    [The statement of Sergeant Major Lee follows:]

              [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]



    Mr. Young. Chief Master Sergeant Benken, we are happy to 
hear from you.

           Summary Statement of Chief Master Sergeant Benken

    Chief Master Sergeant Benken. Good morning, Mr. Chairman 
and distinguished Committee members. It is a pleasure for me to 
be here again to speak on behalf of the thousands of men and 
women, Guard, Reserve and Active Duty that serve our Air Force 
and our great Nation around the world.
    It was 28 years ago today that I joined the Air Force as an 
18-year-old without a clue as to what I wanted to do in life. 
Needless to say, I found a home in the Air Force. I found a 
great way of life. I found a place where one could succeed if 
you just applied yourself and were willing to work hard.
    It is with great pride that I am here today to say to you, 
we are the best Air Force in the world. We are best in terms of 
technology and best in terms of people. It is with your help 
that we have been able to become the best Air Force.
    Because we believe quality-of-life is directly tied to 
readiness, we believe the investment in our people is extremely 
important so that we can retain our highly skilled, technically 
competent personnel. But our readiness is beginning to diminish 
in some areas and our retention of second-term airmen, our 
bread and butter, has been declining over the past several 
years.
    There are many culprits: the endless rotations to the 
desert, the associated OPTEMPO with no end in sight, a robust 
economy and lucrative employment opportunities, the perception 
we have of an erosion of benefits associated with our changed 
retirement system and medical care delivery; and there is 
uncertainty caused by outsourcing and privatization.
    Loss of second-term airmen is costly. They are our 
frontline supervisors and trainers; they are the future Senior 
NCO leadership of our Air Force. I believe we owe it to those 
who serve our nation to keep their families in a secure home 
environment while they are deployed and ensure that they 
maintain a comparable standard of living. We must continue to 
pay attention to quality-of-life if we are going to continue to 
be the best Air Force in the world.
    We sincerely appreciate all of the past work of this 
Committee, and I look forward to addressing any concerns that 
you have.
    [The statement of Chief Master Sergeant Benken follows:]

              [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]



    Mr. Young. Gentleman, thank you very much. All of you have 
raised some interesting issues that we intend to inquire about 
more specifically, and for that purpose, I would like to yield 
first to Mr. Skeen for five minutes.

                  ENTITLEMENTS AND COMPENSATION ISSUES

    Mr. Skeen. Thank you, Mr. Chairman, and welcome, gentlemen. 
I think you represent the real fiber and major matrix of the 
entire armed services in the people that you represent; and I 
think we have some real serious problems that you are dealing 
with that we are trying to deal with too.
    First of all, I would like to just ask, is there a sense of 
total disaffection and disappointment in enlisted groups, what 
they were promised and what they actually receive? Is it 
reflected in the reenlistment rates and so forth?
    Also, the young people that you have coming in today, how 
do you rate their achievement as far as scholastics are 
concerned? Do they come to you with a pretty good background, 
or are they rather deficient and have to be made up?
    I know this is kind of a fly ball out in center field 
somewhere, but I would appreciate it if one of you could pick 
it up and fling it back.
    Sergeant Major Hall. Sir, that is okay. I will start this 
one off. In the Army, our midterm, soldiers--our staff 
sergeants who have been in the Army 8 to 10 years--are now 
coming to ask the question, ``Is it really worth it to stay in 
for a 20-year career?'' That is becoming more and more a 
question every place I go. The retirement system is the thing 
that bothers them.
    They certainly have concerns about medical care. They fully 
feel they were promised a lifetime of medical care. They have 
concerns about that; that is becoming more and more an issue. 
We are also working TRICARE. We are not yet there. But 
retirement is the main concern.
    I have to tell you, if you look at the statistics from 1992 
to 1997, there is a general downsloping of the percentage of 
satisfaction in military pay. But if you look at the 
satisfaction level for retirement it is in a free-fall.
    There are three different retirement systems. The ones we 
are trying to get to reenlist right now are in the least 
generous--and I even hesitate to use the term ``generous''--but 
they are in the least generous of the three different systems. 
That is becoming more and more important to them.
    Now, even with that, though, I still have to tell you, sir, 
they are staying, and they tell me they will continue to stay 
despite the deployments because they are proud of the job they 
are doing. They tell me they intend to stay with us as long as 
the family support activities stay at the level they are right 
now. Truthfully, I don't know if we can keep it at that level 
with our current funding. But soldiers tell me that they are 
okay with the deployments. They worry about the retirement, but 
they intend to stay as long as we keep the family support 
activities at the same level it is at right now. And the 
numbers really bear that out. We are reenlisting about 70 
percent of our midcareer force.
    Mr. Skeen. That is another part of the question I would 
like to have answered by each of the services, is the 
percentage of reups. But also there is a feeling of betrayal, I 
think. Some of the people we have talked with say they were 
promised something they are not getting.
    Sergeant Major Hall. I don't doubt that, sir, but they are 
not voting with their feet on that issue.
    Mr. Skeen. They are not voting with their feet, but they 
are certainly talking about it.
    Sergeant Major Hall. Yes, sir, they are certainly talking 
about it.
    If I could take the last part of your question very, very 
briefly; you asked about the young people coming in. We are 
okay with the young folks coming in. It is a different 
generation. Every generation has been different. I believe it 
is leadership at the lowest level that takes these great young 
men and women and makes them into great soldiers. So the better 
leadership we provide at the unit level, the better our 
soldiers will be.
    But they will do fine.
    Mr. Skeen. The system works?
    Sergeant Major Hall. The system works. We mirror society, 
sir. We get the best of our public education system coming into 
the Army today. The system--the leadership--will take care of 
them and move them into the next phase.
    Mr. Skeen. Thank you.
    Master Chief Petty Officer Hagan. Sir, I would expand on 
the Sergeant Major's answer without disagreeing with a word of 
it.
    The retirement system is probably the first of all, I will 
tell you that I would not buy into the words that you used, 
total dissatisfaction or alienation at all. There is a strong 
concern and it is centered around the fact that we are in a 
transition from the most generous retirement system to a less 
generous one, the 40 percent of your high-three average at 20 
years, when I stand in front of a group of sailors on a flight 
deck or hangar bay and explain in detail as succinctly as I can 
why this happened, how today we receive a living wage, the 50 
percent was based on what could only be called a stipend, how 
we preserve the 75 at 30 years, and part of the motivation is 
to have sailors serve longer than 20 years.
    Then when I add to that that we have made tremendous gains 
over the years in quality of life, compensation and 
entitlements, I get a degree of improvement in the attitude 
centered around the retirement system.
    But it does emphasize why it is so important for us to, in 
a priority way, meet some compensation needs. In the Navy it is 
career sea pay. Continuing the annual inflation-based pay 
raises in the realistic way we have done over the past six to 
ten years is absolutely essential. But meeting some needs like 
career sea pay, where the sailors that work the hardest, that 
sacrifice the most, that stay in the Navy to do that again, 
even after they know how hard it can be, that is very important 
to us.
    To take the second part, one other thing on the retirement 
system, I think it is important that we continue to study 
options, particularly cost-neutral options. The thrift savings 
plan, so long as it is not in any way deductive of or replaces 
any part of the current retirement plan, could evolve into an 
option, even a cost-neutral set of options, and could be very 
important to the retention of the force in the future.
    In regards to your question about what really is the 
quality of the young sailor, I have a slightly different 
answer, in that I am concerned about the young sailor today. 
The young recruit at Great Lakes is more difficult to train. 
Society and the culture are producing a different set of 
attitudes and, quite honestly, the physical pressures are 
continuously causing us to evaluate the length of time we can 
keep them in training. It gets back to training dollars.
    We need every day in the basic training pipeline. We need 
more. My counterpart, senior enlisted leaders, my group of 
peers, would like to have 30 percent more time in recruit 
training. We would like to see the continuing offensive on the 
dollars reduced. But that is important, and it is important 
because the young sailor today or the young recruit today 
provides some challenges for us in training.
    Are we satisfied with what we get when leadership impacts 
them? Yes, sir.
    Sergeant Major Lee. I will comment briefly. The 
disaffection among my career force in the Marine Corps, no, it 
is not there, sir. There are concerns about retirement plans, 
and there are concerns about medical support, present and 
future. But there is absolutely no disaffection among my 
Marines.
    The second part is, I personally do not consider the 
recruits we are bringing in today any better or worse than what 
we brought in in the past. We have always pulled from society 
what society provided.
    We put lots of effort into bringing in the best there is 
out there, and I believe we are. As a matter of fact, 
statistics don't lie, and I can prove we are. Then I believe, 
and the Marine Corps as an institution believes, you get the 
Marine in return dependent upon the effort and how you make a 
Marine out of them.
    So they are different, but then again, we were all 
``Generation X'' at one time, so we were all different. So I 
don't put them down. I consider them to be as good as we make 
them be, and we try very hard to make Marines out of them the 
right way.
    Chief Master Sergeant Benken. Sir, I will take the second 
part first, if it is okay.
    Mr. Skeen. Anyway that you would like.
    Chief Master Sergeant Benken. As far as the troops coming 
in today, I agree with the Marine Corps perspective; it is what 
you make of them. We have great troops that come in today, very 
intelligent. We are recruiting still 99.4 percent that have a 
high school education when they come to the Air Force, great 
people, and it is all in what you make of them, to be honest 
with you. Great skills, and they are doing good work for us.
    The second-termers I am concerned about, because we have a 
goal of trying to keep 75 percent of our second-term force. 
Since 1993, we have been on a downward slope. From about 81 
percent, we dropped as low as 69 percent last month. That 
concerns me.
    The skills that we are losing also concern me. The F-16 
avionics skill, the F-16 crew chiefs, some of the bomb loaders 
in some of those areas, some of the core defense areas we have, 
we are losing there.
    I have got about 266,000 people that are going to be making 
a reenlistment decision by the year 2001, and that concerns me. 
Retirement tie-in is an issue. The health care issues as they 
see it being kicked to the curb when you are 65 when you 
retire. Those are changing times. TRICARE is something we have 
to ``step up'' to. We don't have the capacity to take care of 
the millions of people that qualify for the military treatment 
facilities. So we are going to have to step up to that.
    The pay gap that has, because of statutory limitations on 
the pay, they perceive the 13 percent pay gap as an issue. So 
those kinds of things have a cumulative effect. On top of that, 
the OPTEMPO of going to the desert time after time, with no end 
in sight, that continues to be a millstone around their necks.
    So it is an accumulation of things, I think, and in looking 
into the future, the second-termers concern me.
    Mr. Young. Mr. Skeen, thank you very much. I think the 5-
minute rule is going to have to be extended.
    Mr. Skeen. I beg your pardon for running over my time, but 
I think--those elements were particularly important to me, 
because every discussion you have with those people today, they 
feel like they have been betrayed as far as what they were told 
they would receive as far as medical care, housing, some of the 
things like that.
    I think you have done a magnificent job of keeping the 
esprit de corps and the rest of the thing together. I credit 
you folks with that kind of ability.
    Sorry about the time.
    Mr. Young. That is okay. I understand with four witnesses 
responding to the questions, I don't think 5 minutes is 
adequate, and I am going to yield to Mr. Dicks now for 10 
minutes.
    Mr. Dicks. Well, let's see how we do, Mr. Chairman.
    Mr. Young. We will yield him more on the second round if he 
needs it.

                          NAVY CAREER SEA PAY

    Mr. Dicks. Master Chief Petty Officer Hagan, you mentioned 
the sea pay issue. Would you explain that a little bit?
    Master Chief Petty Officer Hagan. Yes, sir. In fact, I was 
just thinking as I thought about appearing before you today, to 
report to your wife, her ship is doing very well. I saw RANIER 
moored at North Island last week and talked to the Command 
Master Chief.
    Mr. Dicks. I will pass that along to her. She is very 
interested.
    Master Chief Petty Officer Hagan. Thank you, sir.
    Career sea pay is absolutely Navy-unique in that it is 
compensation provided for living and serving on a ship and can 
only be paid when you are living and serving on the ship. The 
squadrons that comprise the wing that go to the carrier don't 
get career sea pay until the day they embark, while they are 
living and sleeping on the ship.
    It was instituted in 1981. We built a case, and as all of 
us know, it is very difficult for a new entitlement that is 
service-specific, Navy in this case, to get through the Unified 
Legislative Budget or ULB.
    We built a case in the late 1970s and early 1980s that we 
could not man the all-volunteer force without recognizing the 
unique sea duty environment, living and serving on a ship. We 
have improved it a little bit, but there are physical limits to 
how much you can improve life on a ship, and we are up against 
those limits right now.
    Career sea pay has not been adjusted for inflation. It has 
been adjusted twice as far as the gates and the way we use it, 
but it has never been adjusted for inflation. It started out at 
$50 a month for an E-4. It is a career benefit, and so it is 
only paid to the E-4 and above level, and it goes up to a 
maximum of around $465 for an individual who has served in a 
more senior pay grade a longer time at sea.
    It has never been adjusted. It is necessary to adjust that 
in order for it to provide the retention and equity benefits 
that it was meant to provide.
    The time when we are going to have to face that is 
approaching rapidly, especially with the OPTEMPO and the 
PERSTEMPO being what they are. Some sailors' PERSTEMPO is 
astounding. I have given examples before in enclosures to my 
testimony, but in some cases a sailor may spend 25 or 30 days 
in home port in a full year, with much of that time deployed 
and much of it doing Shore Rotatons or SRA out of home port.
    So career sea pay becomes an issue of, again, paying those 
who work the hardest and sacrifice the most over the longest 
period of time more, and that makes it an equity issue. But it 
is, quite honestly, a Navy manning and retention issue, and the 
need to address it is just ahead of us with immediacy.
    I am putting it into my testimony, with a little bit of 
difficulty through the OMB process, because it is not in the 
President's budget and it isn't in the ULB, for reasons that I 
feel very strongly about.
    Mr. Dicks. You mentioned that the junior sailor lives on 
the ship, even when he is back in the home port, right?
    Master Chief Petty Officer Hagan. Yes, sir.
    Mr. Dicks. What are the problems associated with that?
    Master Chief Petty Officer Hagan. The E-5 and E-6 single 
BAQ was just achieved in the last three years. We got E-6 BAQ 
two years ago, E-5 BAQ a year ago. So part of the career force 
that is single now has some quality of life when they go 
afloat, because they can receive Basic Allowance for Housing, a 
BAH, and live ashore.
    The E-4 and below are statutorily deprived of that. The law 
states in essence that instead of getting a room in the 
barracks to any standard, whether it is a 2-plus-zero or a 1-
plus-1 or single room, instead of getting a room in the 
barracks or BAH to live ashore, you get a rack and a locker, 
and the locker has about 3\1/2\ cubic feet maximum, and that is 
the law.
    I don't have a quarrel with that. I don't come before this 
Committee or any other Committee asking for single BAH for E-4 
and below, but simply for a series of equity issues.
    Just as two quick examples, and there are a number of them, 
every Sailor that lives in the barracks has a washer and dryer 
available, usually on the same floor they live on, to do their 
civilian clothes and perhaps a kitchenette, et cetera.
    The sailors that live on the ship in berthing compartments 
that sometimes have 130 or 140 other individuals living in them 
do not have a free laundry, and we are in the process of trying 
to meet the physical demands of putting free laundry on the 
pier and then centering around that an oasis of healthy 
alternatives to some of the unhealthy liberties that young, 
single Sailors find attractive at that age group--voluntary 
education, off-duty voluntary education options; storage for 
their personal belongings--because they are more affluent than 
young single sailors were in the past, they do have possessions 
and hobbies; uses for their cars, long-term storage and short-
term auto needs. Those kind of things have a real price tag to 
them, and we are not budgeted for them.
    Just to add one other thing, the other branches of the 
armed forces, when the soldier, Marine and airman are back at 
base after their deployment, between deployments, they live in 
the barracks. Between deployments, E-4 and below will live in 
the berthing compartment, and providing for them is a unique 
Navy challenge.

                       GENDER INTEGRATED TRAINING

    Mr. Dicks. A more general question on the matter of 
training and gender-based training. The Kassebaum-Baker report, 
said we ought to have separate training, and now the Secretary 
of Defense says, no, we are not going to do that. What do you 
think the right way to train these new enlisted people is?
    Master Chief Petty Officer Hagan. I will start that real 
quick and yield to the Sergeant Major. I welcome the Kassebaum 
report. It is my opinion that the societal and cultural 
pressures are having an impact on our training, and I welcome 
every line of it. I think the Navy's response, which said that 
we can and will comply quickly with 25 of the 30 
recommendations, that two of them are not applicable, and that 
three, we want to comply with them partially, and one of those 
was a segregated berthing.
    I would rather follow the protocol we follow aboard the 
ships in training. Aboard ship we have segregated berthing and 
we have a protocol to enter that berthing. I think that we were 
evolving toward that rather rapidly without and before the 
Kassebaum-Baker report, and we continue in that direction.
    The Secretary's guidance gives us a little more impetus, 
but I feel strongly that the Kassebaum-Baker report has been 
and will continue to be good for the Navy and Navy training.
    Thank you, sir.
    Sergeant Major Hall. Sir, from my perspective, with regard 
to training and the Kassebaum-Baker report, I have got to tell 
you, I think we have it about right, and I think each of the 
services will also say that. And I think I say we have it about 
right because everybody talks about what a great job these 
soldiers are doing, what great young men and women they are, 
and how superbly they are going about accomplishing their 
mission.
    The one thing we have to keep in mind as we praise these 
young men and women--and they are doing superbly--is that they 
were all trained in a gender-integrated environment. We start 
the soldierization process the first day they put on a uniform 
and work them into teams and units. Now, they don't form teams 
when they get to their first units. So if you really believe 
they are doing a great job, and the Army is accomplishing its 
missions, I just ask you to remember that they indeed were 
trained in a gender-integrated environment.
    Sergeant Major Lee. On behalf of the Marine Corps, 
obviously we were pleased with the Kassebaum-Baker study. My 
only comment is, we want to continue very much to do it the way 
we currently are.
    Chief Master Sergeant Benken. Sir, we embraced a lot of the 
Kassebaum-Baker report as well, but you know, there was a day 
in the United States Air Force when the men went off to the 
firing range and the women went off to a makeup class. We don't 
do that anymore. Ninety-nine percent of our career fields are 
open to women; 24 percent of our recruits are female.
    We have to teach them how to train and fight together. The 
place to do that is basic training. It is not fair to kick the 
can down to the wing commander and have them try to teach them 
how to train and fight together. So I think our 21 years of 
success at gender-integrated training speaks for itself.
    Mr. Dicks. Thank you, Mr. Chairman.
    Mr. Young. I am going to yield next to the members in the 
order in which they arrived in the hearing room, since we are 
extending the time period. I would like to recognize Mr. 
Cunningham now.
    Mr. Cunningham. Thank you, Mr. Chairman.
    Mr. Young. You were the first one in the room this morning.

                         WOMEN IN THE MILITARY

    Mr. Cunningham. Thank you, Mr. Chairman. I am interested, I 
have had an opportunity to talk to all services--and I 
apologize, Sergeant Major, except for the Army women members of 
the service--and I have talked to the other three services, 
both enlisted and officers, and I asked them a question. I 
said, what about the political correctness in training?
    They seem to feel that the units--and I would like to get 
your response--really didn't pay a whole lot of attention, that 
the leadership let the rules be known and known well, but with 
all the operations tempo going on, they are just trying to get, 
like you say, the 1970s equipment up, they are working hard, 
they are away from their families. If they are separated for 
just that kind of training, it took away from the kinds of 
things they were trying to do, and it seemed to draw more 
emphasis and divisors. They said the margin for error they felt 
on political correctness was so small that in some cases troops 
were afraid to work with each other in some environments.
    I know when I had my squadron, one of the things I did, I 
never had separate meetings with E-5 women or E-4 women or 
officers. I always felt if you were an E-5, you met together, 
because that is where you trained together, and that was 
important, because I thought that that separation even divided 
the teamwork more. And I would be interested in your comments 
on that.
    They say, listen, women have been accepted into the 
services. The political correctness, they want to be 
recognized, but yet in many cases, it is driving them apart.
    Sergeant Major Hall. I think, sir, that first of all, it 
has been a very tough year for the Army. We had a situation 
where we had a leadership deficiency. Leadership broke at 
Aberdeen Proving Ground within that one battalion.
    Mr. Cunningham. That is key, the leadership.
    Sergeant Major Hall. That is right. That was a leadership 
failure. I don't know how else to describe it. It was a group 
of drill sergeants who willfully, knowingly, made a conscious 
decision to break the rules, regulations, and tradition of our 
service and the laws of the United States of America.
    I don't understand, quite frankly, how you make the leap 
from a leadership failure and criminal activity by leaders in 
Advanced Individual Training, or AIT, and apply that onto basic 
training. Basic training wasn't broken.
    Mr. Cunningham. You can't.
    Sergeant Major Hall. But the reaction from that throughout 
the Army, the fallout has caused some things to happen.
    First of all, I think drill sergeants thought that their 
leadership had lost faith and trust in them. That was never the 
issue. But it did cause some commanders at lower levels, 
perhaps, to rein back the authority of the noncommissioned 
officers.
    When you talk about, even at my level, noncommissioned 
officers and petty officers going about their duty, the only 
thing we have is our duty, responsibility, and authority. So 
when commanders pull back the authority of the drill sergeants 
or the noncommissioned officers, the tendency is to go soft, 
and we did in pockets. We went soft, and we didn't uphold the 
standard that was established. That is how we got into the 
situation we are in now.
    We have gone back and have told those noncommissioned 
officers, those leaders, You uphold the standards and you do it 
the right way, but you uphold the standards and you treat 
people with dignity and respect as you do it and we are going 
to be behind you all the way.
    Mr. Cunningham. I would say that the given must be that the 
leadership--let me interject before the others and give you a 
couple of ideas.
    We had a case of a young lady that was receiving obscene 
phone calls in our squadron. We used Ma Bell and I tracked the 
guy to an F-14 squadron, who she had turned down for a date. 
And we found out who the individual was. It just so happened 
that he was caught with marijuana at the same time.
    But we brought the gent before our female enlisted, the 
whole squadron in our offices and the quarters, and I had a 
captain's mast on that and we hauled him away in chains down to 
the brig. That showed the women that we are not going to 
support that thing. But we never had separate political 
correctness.
    The second thing that I did is they could walk through my 
office--and you probably disagree with this, but they could 
even walk by my command master chief if there was any known 
sexual harassment or if there was anything racial, if there was 
any child abuse, and there was five different things. And the 
leadership has got to be there.
    But say you have got good leadership, in even these 
squadrons the enlisted down below were saying that they are 
still afraid that the margin of error is driving them a little 
bit apart; that they want to be a part of the team but in some 
cases they are afraid of that because of other things that have 
happened. I think it is mainly leadership is the problem. It 
doesn't get down to the lower level.
    Sergeant Major Hall. Sir, you are absolutely right, there 
is no Army policy that causes that political correctness. There 
was never a ``more than a 3-second look'' rule as an Army 
policy. It happened as a reaction to Aberdeen Proving Grounds 
and other things.
    The only thing I can tell you, sir, is that I will be in 
here next year, and I am going to tell you that the Army is 
going to soldier through these problems that we have got now. 
The soldiers have not lost faith in the Army. They have not 
lost faith in their leadership, and they have not lost faith in 
themselves to be great soldiers. They will come together as a 
team. There is a perception of zero defect mentality and 
political correctness. That will go by the wayside.
    Mr. Cunningham. This is not just common to the military, it 
is in other civilian areas as well.
    Sergeant Major Hall. I think we have a better chance of 
getting by it than we do in the other areas.
    Mr. Cunningham. Thank you, Mr. Chairman.
    Mr. Young. Mr. Dixon.

                       DEMOGRAPHICS OF ENLISTEES

    Mr. Dixon. Thank you, Mr. Chairman. I would like to back up 
and pursue Mr. Skeen's line of questioning. Sergeant Hall, can 
you give me generally the profile of your typical recruit? 
Ethnicity, education, region of the country, any prior work 
experience.
    Sergeant Major Hall. Sir, to give you the level of detail 
that you need, I am going to have to take that for the record. 
They are generally just out of high school, limited work 
experience, and no full-time job before trying to find some 
direction in their life. And the recruiter sells them on the 
Army as a way for experience, work, and ethic--just sells them 
on it. Not just from a college dollar standpoint, but also on 
pride and patriotism, and they come in to serve. But to give 
you the level of detail, sir, if you will let me take that one 
for the record.
    [The information follows:]

    This answers those questions as well as provides the gender 
distribution. All summary statistics are based on regular Army 
accessions from fiscal year 1994 through fiscal year 1997.
    The ethnicity is explained as one of four categories. All 
accessions are categorized as African American, White, Hispanic, or 
Other (which would include Asians, Pacific Islanders, Native Americans, 
etc.). Anyone self-identifying as both Hispanic and another race is 
included in the Hispanic numbers only. During this time period, 
accession ethnicity was as follows:

                                                                 Percent
African American..................................................  22.9
Hispanic..........................................................   8.3
Other.............................................................   4.1
White.............................................................  64.7

    The educational qualifications of Army accessions are evaluated in 
two ways: (1) Does the accession possess a high school diploma, and (2) 
How did the accession perform on the aptitude test? The Army receives 
guidance from Congress on minimums, and the Army uses these minimums in 
the accession process. The current standards are: (1) At least 90 
percent of accessions will possess a high school diploma, (2) at least 
67 percent of accessions will score in the upper 50 percentile of the 
aptitude test, and (3) less than 2 percent of accessions will score in 
the bottom 30 percentile (category IV). During this time period, 
accession education level was as follows:

                                                                 Percent
High School Diploma Graduate (HSDG) only.......................... *87.5
HSDG and at least 15 hours college................................  *4.6
GED or home school education......................................   5.8
Upper 50 percentile of aptitude test..............................  69.0
Category IV on aptitude test......................................   1.7
---------------------------------------------------------------------------
*(These two categories total to 92.1 percent HSDG)
---------------------------------------------------------------------------
    In terms of gender, these accessions were 81.1 percent male, and 
18.9 percent female.
    The region of the country can be determined several ways. In this 
document, the Census Bureau's nine divisions were used. Accessions by 
division were as follows:

                                                                 Percent
New England.......................................................   3.5
Middle Atlantic...................................................  11.5
East North Central................................................  13.0
West North Central................................................   5.8
South Atlantic....................................................  23.1
East South Central................................................   7.0
West South Central................................................  14.4
Mountain..........................................................   7.0
Pacific...........................................................  12.7

    Responses to the Army Recruiting Command-sponsored New Recruit 
Survey (NRS) were used to answer the work experience question. The NRS 
is administered to a random sample of newly contracted applicants; some 
of whom may not access. There are two multiple choice questions 
answered by new recruits that can provide insight to this question: (1) 
This question establishes the new recruit's working/school attendance 
status prior to joining the Army, and (2) this question provides broad 
types of work. Of the new recruits that responded to these questions, 
top answers were as follows:

                                                                 Percent
I was working and going to school.................................  39.3
I was working full-time...........................................  23.8
I was attending school and not working............................  19.5
Service or restaurant worker......................................  21.6
Laborer...........................................................  12.1
Salesworker.......................................................  10.1

    Using the top answers from each topic in this document, the typical 
accession could be described as a White, non-Hispanic Male from the 
South Atlantic Census Bureau Division with a High School Diploma and 
above average aptitude. Prior to joining the Army, he more than likely 
worked in some type of service work and simultaneously attended school.

    Mr. Dixon. Do any of the services have a different profile 
than Sergeant Hall?
    Master Chief Petty Officer Hagan. I would just add 13 that 
the Navy has to 15 percent female and since we do recruit up to 
age 35, we have an element that is older, but it is essentially 
the same as described by the Sergeant Major.
    I would add one other thing that I notice in the Navy. The 
Navy has always had a large minority component and very often 
the minorities have been from other nations. As I travel the 
training world now, I am seeing more, and I will provide for 
the record the exact data, but I see more and more green card 
holders in our Navy from nations from Afghanistan to the 
Caribbean, South America and the Orient. And generally 
speaking, that is a neutral observation. They become good 
sailors. They are very often in the upper mental categories 
that we are trying to recruit. I will provide that and also add 
for the record greater detail.
    [The information follows:]

    The profile* of our typical Navy recruit is as follows:
    81% male
    98% non-prior service
    95% high school diploma graduate
    59% average AFQT score
    55% are caucasian, 20% black, 15% hispanic, 10% Asian-Pacific 
Islander
    16% are from the Northeast, 27% Southeast, 24% Central and 33% 
Western
    Top reasons for joining are: skill training, money for college and 
travel
    *Source: FY-98 Navy Recruiting Trends and Personnel Statistics 
Report

    Sergeant Major Lee. My average recruit is 18 years old, is 
a high school graduate, falls into the top level mental 
category, I to III alpha. I don't comment on minorities so 
much. We have, I would say, 40 percent minority recruits, 60 
percent the average white male. One out of 11 or one out of 12 
will be female. But that is our way we recruit and that is what 
we have to have, sir. Very good.
    Chief Master Sergeant Benken. Sir, we do about 30,000 a 
year accessions, 99 percent are high school graduates. About 24 
percent are female. Further demographics I will have to take 
for the record. Seventy-nine percent of the enlistees score in 
the top half of our qualification test. That is down from an 8-
year average of 83 percent, but it is above the DOD floor of 60 
percent.
    [The information follows:]

    A typical Air Force recruit is an unmarried twenty year-old high 
school graduate who scored in the top half of the Armed Forces 
Qualification Test. They hail from all regions of the United States in 
nearly equal percentages of the youth population and have little or no 
full time work experience. Seventeen percent are black and seven 
percent are of Hispanic Origin.

                         RECRUITING INCENTIVES

    Mr. Dixon. Have any of the services tried to identify what 
the incentive is for someone to enlist?
    Sergeant Major Hall. Sir, we have. The overriding reason 
that young recruits give is money for college fund. That is the 
majority. The other one is sort of a mix between pride and 
patriotism. It is reassuring to know that that is still alive 
and well. And also repayment of college loans.
    When we were short infantrymen last year we made a 
conscious effort--and we were short 5,000 infantry soldiers--we 
made a conscious effort to get those 5,000, and when we offered 
a reenlistment bonus, they came forward very quickly. So 
dollars is still a motivator but there are others.
    Mr. Dixon. So you don't have a lot of enlistees who say 
they want to make a career of the service going in?
    Sergeant Major Hall. Yes, sir, they will tell you that they 
want to make a career of it, but I don't think they know that 
they want to make a career if it. I think they are looking for 
a direction in their life and service is certainly, for the 
young folks that we are recruiting, a great thing. I don't know 
that in February of 1968, Bob Hall knew that he was going to 
stay in for 30 years and be the 11th Sergeant Major of the 
Army; and also, I will tell you that my drill sergeants 
probably didn't think I was going to stay in that long either.
    Mr. Dixon. Do many of the services have a different view? 
The Air Force or the Marines.?
    Sergeant Major Lee. Let me go, sir, because I think I may 
be opposite. We do not recruit based on any kind of enticement, 
sir, we really don't. We offer them a challenge. We tell them 
up front we are going to change their life. We beat them up 
pretty good when they are waiting to even go to boot camp. We 
separate them from the pool process if they don't maintain 
standards that we lay on them when they are in the pool. 
Enticements of monetary or those type of enticements are very, 
very negligible in our recruiting effort.
    Mr. Dixon. Would you say that the profile of your recruit 
is somewhat different than the other services?
    Sergeant Major Lee. Absolutely not, sir, because again over 
96 of mine are hard diploma holding high school graduates.
    Mr. Dixon. Are they more aggressive? Are they more 
patriotic? Is there more machoism involved?
    Sergeant Major Lee. That is what we use to entice them into 
the military. I wouldn't say that they are, but we generate 
that within them. Yes, sir.
    Chief Master Sergeant Benken. Sir, we do a survey. Normally 
when they come in they say they come in to get an education. I 
think that is true for most of them, but a lot of them just say 
that because it sounds a lot better than anything else they 
would say.
    But once they come in the service and they go through basic 
training and they are in there for a while and we do an exit 
survey and we ask them why they are in the military they say it 
is to serve their country. We are able to do a little bit of 
mind change in basic training. Patriotism comes forward.

                MILITARY OCCUPATIONAL SPECIALITIES (MOS)

    Mr. Dixon. What MOSs in the Army, Sergeant Hall, are hard 
to fill?
    Sergeant Major Hall. I don't think there are any that are 
hard to fill. We didn't get the infantrymen that we needed last 
year, but it was because we didn't put the push on it at the 
recruiting level and at the entrance processing stations.
    With the numbers that we have to recruit, we train more 
every year than the other three services combined. We put about 
110,000 through basic training each year. That is Active, 
Guard, and Reserve.
    The numbers that we get are such that at any one time we 
may be short, but over the period of a year we are fairly 
comfortable that we will be able to go get the right numbers, 
and the right quality in the MOSs. For some reason, that just 
dropped through the crack last year.
    Mr. Dixon. What about the other services?
    Master Chief Petty Officer Hagan. The critical ratings in 
the Navy, area challenge I cannot make the statement that the 
Sergeant Major did. We are continually challenged to fill the 
nuclear power quota for the five ratings that support nuclear 
power propulsion, the fire control technician, the advanced 
electronic technician, the advanced avionics technician, the 
gas turbine, the high-tech end of the spectrum that really does 
require a certain ASMAT score and a certain intellectual 
aptitude or upper mental category.
    We have to enlist those for six years because the training 
in some cases takes a full two years to complete, more than two 
years if you count how long it takes them to get completed with 
their watch stations on the ship or submarine. So those 
continually challenge us, and dollar per dollar per recruit 
they cost a great deal more, and I could provide for the record 
the exact dollar to recruit, and the other ratings are what we 
call ``general detailing''.
    Mr. Dixon. So one of the problems is that an enlistee, even 
if they have the aptitude, is not willing to commit six years 
to get the training?
    Master Chief Petty Officer Hagan. That is part of the 
problem, and another part is that the group that we need quite 
honestly has more options in life itself. My answer to the 
first question you asked would have been education broken down 
into College Fund and to get the training that we provide so 
they can go back out to the Navy. But an awful lot of people 
have more options than I did and my peer group did in 1965 when 
I came into the Navy.
    Mr. Dixon. Sergeant Major Lee?
    Sergeant Major Lee. Sir, I don't have a real difficult time 
filling my MOSs. An example of a very hard MOS to recruit to 
would be the 2600 types, the teletype and the intelligence and 
the intelligence communications.
    But our real problem, sir--and it is an internal management 
thing--is buying the school seats. We have to buy the school 
seats so far out. We will have the right Marine who can fill it 
and wants to do it but can't ship at the right time. But that 
is an internal management problem. So no, I don't. And what 
problems I do have are internal management.
    Chief Master Sergeant Benken. Sir, I would say it is combat 
control and pararescue, the physical demands that are 
associated with that. We don't spend a lot of money on 
recruiting--on recruiting dollars and things like that. Our 
issue is the training that we have to do the skills. Our 
weapons systems are much more complex than they used to be.
    When I came in the service in 1970 as an Information 
manager, my top line equipment was the Underwood 5 manual 
typewriter. There is not a lot of learning curve associated 
with an Underwood 5 manual typewriter. Today when we bring a 
young person in, they have to learn LAN administration and the 
complexities of computer operations, satellite technology and 
those kinds of things. So it is important that we recruit 
people with a high level of intelligence, and more importantly, 
it is important after we spend all the money on training them 
that we keep them.

                        CITIZENSHIP REQUIREMENTS

    Mr. Dixon. If I could just pursue one other question here, 
there is no requirement in the service that you are a U.S. 
citizen?
    Master Chief Petty Officer Hagan. There is a requirement in 
the Navy to be a U.S. citizen and it is a problem for us, quite 
honestly, that is increasing in dimension right now because of 
what I told you earlier. There is a requirement to be a U.S. 
citizen in order to be in certain skill fields in the career 
force, and sometimes it doesn't always relate to national 
security as directly as other times. A cryptologist, for 
example, must be a citizen to go to A school; but also a 
journalist; any Sailor serving in the engineering department of 
a nuclear powered ship, and I believe, in fact, the rule is 
still being enforced that any sailor on a nuclear powered ship 
must be a U.S. citizen. So green card holders and foreign 
nationals that qualify to be sailors that don't become citizens 
quickly, and the process is not quick under most circumstances, 
do have limitations placed on them, sir.
    Sergeant Major Hall. It is not a problem in the Army.
    Mr. Dixon. You will take people with green cards? You will 
not?
    Sergeant Major Hall. We will take them with green cards.
    Chief Master Sergeant Benken. Sir, the issue becomes they 
cannot hold a security clearance and can't deploy, things like 
that. We extend them, and once they get through their first 
term we try to get them through the process as fast as they 
can. So we will extend them six months at a time, but really I 
think that process needs to be speeded up somewhat through the 
INS.
    Mr. Dixon. Thank you, Mr. Chairman.
    Mr. Young. Mr. Bonilla.

                             PAY RAISE GAP

    Mr. Bonilla. Thank you, Mr. Chairman. Sergeant Major Hall, 
I was reading your testimony and looking at the disposable 
income that some of the enlistees have after paying their 
bills, and it is a pretty sad state of affairs. And I know this 
Committee tries to do all we can to give you the resources you 
need to keep your people operating efficiently, but I am very 
concerned about the commitment of the Administration on these 
quality of life issues. And I know--I am not going to ask you 
to respond at this particular point, but tell me what would it 
take--we are talking about two, three percent raises over last 
year and maybe this year another three percent. That really 
doesn't amount to much.
    Tell me realistically, if we could wave a magic wand and 
say this would actually be an adequate pay raise--I know they 
are not in there to get rich, and I am delighted to hear about 
the patriotic motives behind a lot of our folks in the armed 
forces, but what would be a realistic pay raise that would 
provide some of these folks some adequate discretionary income 
at the end of the month?
    Sergeant Major Hall. Sir, that is actually a real life 
story. That is not typical, but it did happen with the $17 of 
disposable income. If I had a magic wand I would say to give 
you an answer right now--I would say give us 14 percent, which 
is the pay comparability gap. Because of the way our pay raises 
have been computed over the years, the employment cost index 
minus one-half percent, our soldiers are behind the civilian 
community. My magic wand says 14 percent across-the-board.
    Mr. Bonilla. Would anyone else like to comment on that?
    Master Chief Petty Officer Hagan. Yes, sir, I will be happy 
to hold that wand for just a moment. I would like to see us 
implement the pay chart that the 8th Quadrennial Review of 
Military Compensation, or QRMC developed, which is more 
sensible. There is a small dollar figure plus-up required to do 
that, and it grandfathers everyone so no one loses pay.
    I would like to see us adjust the threshold for CONUS COLA. 
It is an important compensation issue that currently doesn't 
solve any problems because the threshold is set at 8.5 percent. 
I do not have much of an argument with the proposal.
    I like the proposal that I have heard attributed to 
Congressman Watts from Oklahoma, to do five years worth of 
inflation plus pay raises in order to close the gap. But I 
think--and I feel strongly about this--it must be combined with 
an effort to adjust pays within the force, such as career sea 
pay that I have mentioned twice already and other specialty 
pays, so that those who work the hardest and sacrifice the most 
and over the course of a career really pay more dues really get 
compensated more. Those things would be a total solution, in my 
view.
    Mr. Bonilla. Sergeant Major Lee, would you like to comment 
on a figure, since we are talking about a magic wand here?
    Sergeant Major Lee. Mr. Bonilla, I would prefer to take it 
for the record, except to say I absolutely support what my two 
counterparts have said. The 14 percent would be a great start. 
The five year cost plus would be a great start.
    [The information follows:]

    A pay raise would have to do two things to be considered 
adequate; first, it would have to provide some reasonable level 
of disposable income for all Marines with families. Second, it 
would have to be sufficient to encourage the level of retention 
necessary to sustain our career force. Completely closing the 
pay gap would undoubtedly accomplish both of these objectives. 
To be truly effective, the pay gap should be closed quickly 
rather than gradually. While a gradual approach would obviously 
help in the long run, we also have immediate concerns, such as 
the ones you have mentioned, that require immediate attention. 
It would be a tremendous gesture on the part of our Nation to 
officially and unambiguously eliminate the discrepancy between 
military and civilian pay. Of course, that gesture must be 
followed up with annual pay raises that rise with the ECI, not 
\1/2\ percent (or any other arbitrary amount) below it. I 
recognize that a 14 percent pay raise would be expensive, but 
continuing with the current pay gap solidifies the perception 
that military pay is neither fair nor equitable. I favor the 
quick approach to closing the pay gap because of the tremendous 
impact it would have on morale throughout the Services. I can 
assure you, Marines are not in it for the money. But, as with 
life's other difficult vocations--not being burdened with the 
exceedingly frustrating distraction of inadequate pay frees a 
Marine to be totally dedicated to the task at hand.

    Chief Master Sergeant Benken. Sir, I think we need to close 
the gap. I don't know if 14 percent is realistic, but I think 
the Employment Cost Index, or ECI formula that they use is 
wrong and we need to get out a statutory way to do that, close 
that gap for the future. That is what creates this pay gap 
problem that we have now.

                      MORALE OF MILITARY PERSONNEL

    Mr. Bonilla. I appreciate your comments on that, because I 
have been on kind of a tear lately about not paying attention 
to these kinds of needs, whether it is pay or health care or 
overdeployment and putting off important decisions, to raise 
the profile of those problems versus some of the things we are 
doing around the world that pile on some of these problems like 
the overdeployment, which is what I would like to talk about 
next.
    I was reading your testimony, Sergeant Major Hall, that 
many of the staff sergeants who generally have been in the Army 
ten years and are at the decision point of making it a career 
or not tell you that they do not mind the deployments, and I 
appreciate that statement. But are we near the point, because 
when I visited with some of the enlistees, they are telling me 
it is a real problem. I visited with one in Bosnia a few days 
ago that gave me a heart-wrenching story about how his wife is 
finally going to leave him because he has deployed too many 
months over the last several years. Even though this might be 
the current state of affairs and they do not mind the 
deployments, are we close to the point where people are going 
to say maybe my patriotic spirit and my commitment to service 
in the military is going to be raised into question? A person 
can only put up with so much.
    Sergeant Major Hall. I think, sir, that we are okay with 
our current state of affairs as long as we keep the budget 
where it is. I worry quite frankly, that in the fourth quarter 
we are going to run out of money. We are trying to balance 
modernization, readiness, and quality of life. When you run out 
of quality of life dollars and things start dropping, then the 
pressure back home when you come back from deployment does get 
too tough, and they are going to have to make a choice between 
families and the Army. And for some of them, we know which way 
they are going to go on that one.
    I think the Noncommissioned Officer Corps in the United 
States Army can handle what is on the platter right now. It is 
not a plate, it is a platter. We can handle what is on the 
platter right now but if you asked us to do anything else, the 
question we have to ask is, ``what do we take off?'' We cannot 
do more with what we have right now.
    I don't know how else to answer you, sir, than to tell you 
that we believe, and I believe, that the noncommissioned 
officers have demonstrated that we can do what we have to do 
right now, but if you levy anything else on us, something else 
has to come off.
    Mr. Bonilla. I admire the commitment of all of you for 
doing all you can, sometimes with others trying to tie one hand 
behind your back, and you still operate with the greatest 
attitude and confidence and you make us proud. But I am so 
concerned that the average person out there, not to mention the 
folks that are sometimes giving us budget numbers from the 
administration, that there is not a concern and an 
understanding.
    People out there think that our military is in the same 
condition that they were during Operation Desert Storm, and 
somehow most people think that was a TV war. They don't 
understand a lot of realities of what you all faced. And now in 
this day and age with the situation that arose in Iraq and is 
still pending, I don't think a lot of people understand--I 
think they are going to get a big dose of reality if we have to 
engage in a real conflict, not just peacekeeping; that at some 
point American people are going to say: What has happened over 
the last few years? Why have we suffered so much in terms of 
quality of life that may be damaging morale, and are we getting 
the same quality of person to serve our country as we have in 
past years?
    It is going to be an eye opener at some point and people 
are going to think, how did we let this happen? I guess I am 
kind of making a speech here, but it is a concern I have.
    Chief Master Sergeant Benken. From an Air Force perspective 
we have had to come to grips with the fact that we are more of 
an air expeditionary force. With the downsizing of the military 
that began in 1990, we no longer have the forward presence that 
we used to have overseas.
    And it used to be if you deployed over there a lot of the 
support structure was there to kind of help out, but we don't 
have that anymore. So we have become, you know, what we call 
sometimes an Air Force at sea. So we have the forward deployed 
folks who are kind of running at high RPM, and we also have the 
folks back home who are running at high RPM because the support 
structure has gone with that unit to do the things overseas.
    So we are busier than we have ever been and we have a lot 
of taskings around the world. I would say that we are--just 
because we can have great people and, you know, solid 
leadership, that keeps them going a lot of times, but we are 
starting to have some fraying around the edges. And that is why 
we are here, to call attention to that and say, hey, look, in 
the future we need to take care of some of these things or we 
are going to have bigger problems.
    Sergeant Major Lee. Let me briefly comment. You are right 
on target for part of it, but I do want to comment on the 
deployment aspect of my career force. And again I ask you to 
remember that my force is small and my Marines who stay with me 
20, 30 years know that is what we are going to continue to do. 
When they reenlist, they know what we are going to do. When 
they marry into a family, that family is quickly indoctrinated 
into what we are going to do. Their husband or wife is going to 
deploy. That is what we do and they understand that.
    What you said, though, you are absolutely correct. When my 
Marines return from deployment, because of our inability to 
adequately modernize, bring equipment, major equipment up on 
line, refurbish them and rebuild them--not so much buy new 
stuff but rehab what we have got--when they come off of those 
deployments, they should expect a reasonable quality of life 
per the amount of time they could spend with their families or 
spend on liberty or leave, and that isn't there.
    They come off of this six month deployment and they go into 
what we call a trough or a bathtub. And where they used to go a 
little bit and start building back up for the next deployment a 
year later or 18 months later, they go into it much, much 
deeper now because they have to spend more time working on 
aging gear, spare parts that maybe don't even exist, equipment 
lines and logistics lines that are closed down because the gear 
that you own is so old that you have to fabricate, things like 
that. That is what has hurt us. In that regard you are 
absolutely right.
    But the deployment aspect and the deployment tempo is not a 
problem for the Marine Corps, sir. That is not. It is between 
deployments that is hurting the morale and the welfare of our 
people.
    Master Chief Petty Officer Hagan. I would just add for the 
Navy, adding to my opening statement, as long as we are the 
expeditionary force that remains forward deployed, it has been 
the case in my 30 years in the Navy and I expect it will be 
into the future, as long as we are that kind of a force, we are 
going to have spouses, wives leaving their husbands because of 
that, or alleging it is because of that.
    That is one of the unfortunate prices of doing business. 
That kind of anecdotal data, though, is valuable on the whole. 
Right now my biggest worry is that we as a smaller Navy cannot 
do everything we did as a larger Navy. We are sending smaller 
battle groups, more creatively tailored and the like, turning 
them around quicker. As quickly, and I repeat, the battle 
groups are being turned around as quickly as it is possible to 
do unless there was a genuine--the health of this Nation is 
threatened. The 12 months, we have been running like that for 
the entire five years that I have been in this job.
    We now recognize 2 to 1 as the turnaround ratio we don't 
want to compromise. I remember the day when we recognized 3 to 
1. We don't even refer to that 3 to 1 as attainable in the near 
or distant future. So you were right on target with your 
concerns. They are my anxieties about what a continuing OPTEMPO 
like this will do to retention and recruiting.
    Mr. Bonilla. The closing comment I have is, if you sat in 
my seat or in the seats of some of the other members here, it 
is very frustrating when we are again getting proposals for 2 
and 3 percent pay raises, and on other subcommittees we are 
getting proposals for 100 to 200 percent increases on some what 
I call bogus programs such as antismoking initiatives and 
things like that, where there are already plenty of laws on the 
books in many states all over the country. This happens because 
they sound politically correct and they make headlines on the 
news each night.
    If there was a proposal to give a 14 percent pay raise to 
our troops, I don't know if it would make the first segment of 
Dan Rather's news. But if there is a proposal that gives a 100 
or 200 percent increase on an anti-smoking initiative, bogus or 
not, that would certainly make that. That is a problem we deal 
with all the time. That is not--well, it is your problem, but 
it is the situation we face ourselves with every day. I thank 
you for your time.

                   FUNDING FOR CONTINGENCY OPERATIONS

    Mr. Young. I would like to go back to something you said, 
Sergeant Major Hall, about running out of money in the fourth 
quarter. For fiscal year 1998, when we marked up the bill last 
year, we increased substantially billions of dollars over the 
President's budget request. When we finalized the bill in 
conference with the other body, we were nearly $4 billion over 
the President's budget.
    If you are running out of money in the fourth quarter, if 
we hadn't increased the budget you would have been running out 
of money in the third quarter. Is that a fair assessment?
    Sergeant Major Hall. Sir, I am certainly not an expert on 
budget. It sure sounds like common sense to me. I say we will 
run out of money in the fourth quarter, and I think that is 
potentially true. There are some things that you are going to 
do to help us on that: the supplemental and other things. If we 
do not get the supplemental without offsets, I think the danger 
is very real that we are going to run out of money in the 
fourth quarter.
    I think even with the fine balance that we have got today, 
in order to make it, commanders only have the money that they 
need in the base operations arena to fix the things that are 
broken. So it is later on in the training year, as other 
contingencies come up, that it comes naturally out of our 
pockets. As money gets migrated from one account to the other, 
it is the quality of life arena, in my view, that will probably 
suffer the most. And that is the one area except combat, that 
most affects the soldiers.
    Mr. Young. So basically what you are talking about relative 
to the fourth quarter is the spending on the contingencies?
    Sergeant Major Hall. Yes, sir.
    Mr. Young. And the need for the supplemental.
    Sergeant Major Hall. And my plea for you not to do the 
supplemental with offsets.

                   QUALITY OF LIFE FOR NAVY PERSONNEL

    Mr. Young. You will be happy to know that this Committee 
reported our part of the supplemental, the Defense part of the 
supplemental, without offsets last week. We go to the Full 
Committee on Tuesday of next week. We are not sure what will 
happen. But we will hold fast to our position that we just 
can't offset this $2.3 billion out of the Army, Navy, Marine 
Corps and Air Force, and see how much luck we have with that.
    Master Chief, you mentioned--I wrote this down because it 
struck me, and this Committee is very concerned about quality 
of life. And I hope you all believe that because we really are. 
You said in the Navy the quality of life has been neglected. 
Give us some specifics.
    Master Chief Petty Officer Hagan. Well, sir, I specifically 
said that the quality of life of the young single Sailor who 
lives on the ship is who I referred to as having been neglected 
too long. I must go back and, before I amplify that, and tell 
you that not only do I believe that this Committee is 
interested in the quality of life, I have been the beneficiary, 
along with 400,000 other sailors who are serving today. I stand 
before groups of sailors all over the world and talk about the 
quality of life gains, and I articulate them and I try to list 
them and quantify them in ways that sometimes open their eyes.
    We have made great gains. We are going to hold what we have 
got and incrementally add to it. But the incremental addition I 
would like to make that is the highest priority is to pay some 
attention and put some money against the quality of life of the 
young single Sailor that lives in the ship in home port, very 
often lives in an industrial environment.
    Your Committee or one of the Committees' delegations was 
recently out on the CONSTELLATION in North Island and the 
CONSTELLATION was in SRA or Selected Restricted Availability. 
You couldn't have picked a better place to go. During a refit 
period when you are living in an industrial environment, it is 
not just a 130-person compartment now, it is a 130-person 
compartment that is surrounded by industrial activity. And 
quite often it is environmentally shaky to even live there, and 
we move off the ship at great expense and with logistic 
problems.
    Those young sailors that live there constantly, because 
they have no other options, have been neglected. Now is that 
the Navy's fault? Possibly, to some degree. But the dollars 
that we compete to get and the priorities we have to respond 
to, there just simply has never been enough money. Now we are 
trying to make some obligations and keep those for those young 
sailors and put an infrastructure in place.
    For instance, where the CONSTELLATION and two other 
carriers will soon moor at North Island; and we are trying to 
put an infrastructure of what we are calling learning centers, 
recreation centers and fitness centers dedicated to those 
carriers along those piers. It is expensive and it has never 
been done before. If we are not adequately funded and 
recognized for that unique need--and it is unique among the 
other services--if we are not funded with recognition for that 
unique Navy need, we will not be able to do it and we will 
continue to neglect them.

                      HEALTH CARE AND OTHER ISSUES

    Mr. Young. I had planned to let each of the Members have 
another opportunity to talk with you, but now you have heard 
those buzzers. That means we have a series of votes on the 
floor, so it won't be a case of leaving here and voting and 
coming back.
    So what I would like to do is to use the balance of my time 
and ask all of you if there are any closing comments that you 
would like to make on a subject that we maybe didn't inquire 
about or something you thought about since your opening 
statement. Sergeant Hall, we will start with you.
    Sergeant Major Hall. Sir, I am the rookie at this table 
today, so I have to tell you that I am seriously pleased with 
the questioning. I think we have covered everything that I 
wanted to cover, because we have talked about pay and 
entitlements, and we talked housing a little bit. We also 
talked about a stable retirement system.
    I think the one issue that we didn't talk about is medical 
care. I think this is a tremendous challenge. My people say 
that this is a tremendous problem today. TRICARE works, 
depending on where you are at. If you are close to a medical 
treatment facility; it works very well. For soldiers who are 
stationed away from a post, camp or installation, it works less 
well.
    And by the way, if you have to use a doctor on the economy, 
it is a $12 copayment. To that private first class at Fort Hood 
Texas, $12 eats up a significant part of your disposable 
income. It is not a universal health benefit. It depends on 
where you are stationed at any one time. They are working it 
very hard, but there are still too many things to be worked.
    The issues to be resolved now are; getting the people in 
remote locations into TRICARE. That is working. How do you meet 
the standards of access, getting in to see a doctor or a 
specialist. That is working. How do you get reimbursed for 
claims? More and more doctors will accept TRICARE, but they 
don't want to wait to be paid; they want the soldier to pay up 
front and then be reimbursed. That is working.
    I would tell you, sir, that working out those details is 
too many things for soldiers to believe TRICARE to be a 
universal benefit. We need to push that process forward as fast 
as we can. And that is a joint action. It is a partnership 
between the military services and Congress to make that go 
forward.
    Mr. Young. We only have a few minutes left before we have 
to go for this vote, but my line of questioning was going to be 
on the subject of medical care. This Committee has spent a lot 
of time meeting with the Surgeons General and Dr. Martin and 
others in the system. So we are going to submit those questions 
to you in writing and ask that you respond, because this is a 
very important issue to all of us and I know that it is to the 
members of your services.
    Master Chief Petty Officer Hagan, any closing comments?
    Master Chief Petty Officer Hagan. In the interest of 
brevity I will tell you that I echo the Sergeant Major's 
concern about our TRICARE benefit, the medical benefit for the 
families. It is pretty high on many sailors' list.
    My concern is different. I believe the $6 copayment for the 
E4 and below, the $12 copayment for E5 and above, the $12 a day 
outpatient, the no annual deductible and the reasonable 
catastrophic cap is a very good core benefit. But the length of 
time it is taking to put the network into place and my fears 
that we cannot preserve that low cost core benefit are on my 
short list of concerns that didn't get discussed today, sir.
    Mr. Young. Thank you. Sergeant Major Lee.

                       GENDER INTEGRATED TRAINING

    Sergeant Major Lee. Quickly, I want to echo what my two 
counterparts said previously. I didn't want to talk about this 
but I am going to bring it up, since the issue was raised and I 
did not comment. That is the gender issue.
    Briefly, sir, in my simple way of thinking it would be 
easier to make a Marine Corps change than the other services, 
and obviously the Marine Corps doesn't have a concern about the 
way the other services train gender-wise. We want to be left to 
our own accord and we believe that we are doing it that way.
    I want to say something, that there is a catch phrase that 
concerns me because the catch phrase makes a lot of sense but 
it doesn't make sense for the Marine Corps: i.e., we train as 
we fight. I am going to tell you now, in the Marine Corps we do 
train as we fight, but not in boot camp. We make a basic marine 
in boot camp. That is all. And that Marine who leaves boot camp 
frankly is not a warrior and they will not go into any 
organization to start fighting.
    Following boot camp, we make them into a warrior. We train 
them in the skills of combat, either advanced skills, 
rudimentary skills, and then after they have followed on their 
training and gained their pure MOS qualification, then we put 
them into the unit where they will train as they fight. Until 
that time in the Marine Corps, we do not train as we fight in 
boot camp or even the follow-on training. I wanted to make that 
clear.
    Mr. Young. Thank you. Chief Master Sergeant Benken?
    Chief Master Sergeant Benken. Sir. Like anyone else we are 
competing for America's best out there, and in a smaller force 
every individual counts. And all the issues that we talked 
about today are important to our recruiting effort and our 
retention effort, and I would like to say that we need your 
help in making sure that we continue that.
    Mr. Young. I want to thank all of you for being here today 
and for your very forthright responses to our questions. We are 
here to serve those who serve in the military and do the best 
we can to make sure their quality of life is as good as we can 
make it.
    This Committee is adjourned. We will reconvene at 1:30 p.m. 
in a closed session with the Vice Chiefs of the Services, and 
the topic will be the readiness of our forces. The Committee is 
adjourned.
    [Clerk's note.--Questions submitted by Mr. Young and the 
answers thereto follow:]

                        Other Support Activities

    Question. The downsizing of the military affects not only end 
strength and force structure, but also other support functions located 
on military installations that might close due to Base Realignment and 
Closure (BRAC); such as MWR facilities, hospitals, exchanges and 
commissaries.
    Clearly, these support activities are important to a member and his 
family's quality of life and enhances his standard of living while in 
the military.
    Gentlemen, is the Department of Defense presently considering any 
significant changes to commissary or exchange operations in order to 
reduce costs?
    Army Answer. Under a plan to reduce costs on installations that 
maintain a small commissary and exchange or where a larger commissary 
or exchange is only a short distance from an installation that 
maintains a small commissary and exchange, a program known as 
``Hybrids'' is being evaluated. The hybrid program would combine 
commissaries and exchanges into one store. Grocery prices would remain 
at commissary prices, and exchange items would remain under the Morale 
Welfare and Recreation (MWR) umbrella. The intent is not to erode the 
benefit of groceries at cost plus five percent surcharge. Also, there 
is a Joint Exchange Due Diligence Study about to get under way; the 
contract should be let in April. The objective of the study is to 
determine the most efficient and cost effective way to organize and 
operate our services exchanges in order to meet service-unique needs, 
maintain good customer service, ensure competitive pricing, and 
continue support for MWR.
    Navy Answer. Both the exchange services and the Defense Commissary 
Agency (DeCA) constantly seek ways to reduce costs. While I know of no 
significant initiative underway to reduce commissary costs, cost-
savings initiatives in daily operation of the Commissaries are on-going 
under DeCA oversight. However, there is no dramatic restructuring move 
or policy shift which will significantly reduce costs. On the exchange 
side, the Services plan to start a study in April to examine the most 
efficient and effective way to organize the exchanges. While there are 
no preconceived conclusions, this study should determine if savings can 
be achieved by integrating the exchanges.
    Marine Corps Answer. The Marine Corps is currently participating in 
two major Department of Defense (DoD) initiatives dealing with exchange 
operations. The first is the ``due diligence'' review. We support the 
objectives of the ongoing ``due diligence'' study--to identify the most 
efficient and cost-effective way to organize and operate the services 
exchanges in order to maintain good customer service, ensure 
competitive pricing, continue strong financial support for MWR and meet 
service-unique needs.
    The Marine Corps is also a participant in the devolvement of 
Defense Commissary Agency (DeCA) funding and operational control to the 
service secretaries, as part of the Defense Reform Initiative (DRI). 
The Marine Corps supports the concept of DeCA devolvement, devolving 
day to day supervision of DeCA to the secretaries of the military 
departments under the leadership of an effective board of directors 
with membership from all the services. Giving the services better 
control of this vital benefit should, in the long run, provide better 
service for the service member.
    Air Force Answer. We are not aware of any significant OSD proposals 
that would result in reduced costs for the commissary. OSD's planned 
devolvement of the supervision over day-to-day commissary operations 
does not claim any cost savings. The Exchanges are participating in a 
due diligence study of possible consolidation of business processes; 
however, we do not expect them to implement any of the possible changes 
unless the changes will produce cost savings.
    Question. Will you explain how a reduction in the commissary 
subsidy would effect the enlisted personnel in the military Services?
    Army Answer. A reduction in the commissary subsidy would affect not 
only enlisted personnel but all service members and their families. The 
greatest non-pay benefit would be eroded. The surcharge rate would have 
to be raised in order for commissaries to continue operations. To 
stretch the available resources, operating hours would be reduced and 
some stores closed. This means soldiers would have to either drive 
longer distances to take advantage of a commissary or shop at local 
supermarkets. Because the leadership considers this non-pay benefit so 
valuable, reprogramming dollars into the commissary account from 
readiness programs or other quality of life programs to maintain the 
current standard could occur, further stressing readiness and quality 
of life funding.
    Navy Answer. The cost of the commissary is borne either by the 
taxpayer (through the subsidy) or the user (through the surcharge). A 
reduction in the taxpayer subsidy will be borne by our enlisted members 
in one of two ways: either out of their pockets because of a surcharge 
increase; or by having some of their commissaries closed and operating 
hours reduced at others.
    Marine Corps Answer. Commissaries are considered to be the number 
one non-pay compensation benefit of service members. Reduced commissary 
prices promote a 28 percent savings over civilian supermarket prices. 
Department of Defense (DoD) research shows a $2,000 annual savings for 
families with children who shop their commissary. Any reduction in 
commissary subsidies will directly translate into a reduction of 
services and benefits for all military personnel. Enlisted personnel 
would, therefore, have to shop on the local economy and pay more for 
their grocery items. Because enlisted members, especially married 
junior enlisted, must work hard to make their paychecks last from 
payday to payday, reduction of commissary subsidies would prove 
extremely detrimental to their morale and quality of life, and would 
adversely affect retention.
    Air Force Answer. Any reduction in commissary subsidy will have a 
direct impact on all military personnel--especially enlisted personnel. 
In 1997, DeCA received $936 million in appropriated funds supporting 
military families world-wide. This is part of a long standing 
commitment--a promise--on the part of Congress and DoD to cover certain 
commissary operating costs as an integral part of the military 
compensation package. Failing to stand-by our commitment will impact 
retention and morale.
    Air Force families count on savings from shopping in the commissary 
to extend their already stretched family income. These families save 
$2.40 for $1 of the appropriated fund subsidy. For the typical enlisted 
family, the commissary represents a savings of up to 29 percent on 
their grocery bills. The loss of the commissary benefit equals a 7 
percent pay cut to these troops. Also, commissaries are a major 
component of our military community. In the overseas environment, they 
serve as a critical quality of life link to home--a link that must not 
be sacrificed because they are stationed overseas.
    Finally, commissaries directly impact the quality of life of each 
member and have significant retention implications. In fact, according 
to the 1997 CSAF Quality of Life Survey, they ranked in the top three 
non-pay programs influencing career intent for officers and enlisted 
alike. Commissaries rated second only to health care in their influence 
on officer career intent. Enlisted members rated commissaries a close 
third behind health care and education. They have a direct impact on 
decisions to join the Air Force, stay with the Air Force, and Air Force 
readiness.

                            Personnel Issues

    Question. The average age of the enlisted service member varies by 
service, but averages between 17 and 24 years old, and is a younger 
workforce than their civilian age counterparts. During the last 20 
years, the enlisted force has changed from a ``single male'' 
establishment, to one with an emphasis on family. In this 17-24 year 
age group, 29 percent of the enlisted members are married. Gentlemen, 
what do you believe are the factors which are causing earlier 
marriages, earlier childbearing, and larger families with military 
personnel versus their counterparts in the civilian world? Why do you 
think service members differ from American society in this regard?
    Army Answer. The median age of active-duty Army enlisted members is 
26. The earlier marriage likely stems from several factors. One such 
factor is that cohabitation (men and women living together without 
benefit of marriage) is prohibited under Article 134 of the Uniform 
Code of Military Justice (UCMJ). A percentage of civilian young people 
choose to live with a member of the opposite sex versus marriage. In 
addition, the military provides steady paid work, so its members are 
more likely to marry than their civilian counterparts. Finally, there 
may be some incentive for military members to marry based on housing 
policies and additional allowances paid to married soldiers. Regarding 
family size, the average number of children, for soldiers who have 
children, is 1.9 children per soldier. This is not higher than the 
civilian average. Soldiers may start their families at younger ages, 
perhaps due to stable employment, incentives to marry, and the cultural 
norms of the military, but their average family size appears to be no 
greater than for their civilian counterparts.
    Navy Answer. We have no data that indicates that military members 
are marrying earlier, bearing children earlier or are having larger 
families. Not having the data described would make the comparison to 
American society at large speculative and possibly even erroneous.
    Marine Corps Answer. The decision to marry is influenced by many 
factors. Young service members often cite a desire to get out of the 
barracks as one reason. Other factors cited include a belief that 
marriage incentives such as the Variable Housing Allowance (VHA) will 
improve financial status and a fear that if they don't get married 
their sweetheart won't wait for them while they go off on a deployment.
    Additional factors which may cause earlier marriages, earlier 
childbearing and larger families include a significant increase in 
deployments and reunions, optempo climate, increased isolation and 
loneliness from loved ones and the general community.
    This young age group in the civilian world is far less mobile and 
is not isolated from the general society and their loved ones. The 
majority of young couples today are both employed and much more 
``career oriented.'' Their decision to have children later in life is 
closely associated with their desire to have their careers well 
established.
    Air Force Answer. The Air Force provides many positive factors that 
are conducive to a stable family life. Good medical care, a secure job 
and strong emphasis on Quality of Life by our senior leadership. A 
combination of these factors may contribute to a young airman's 
propensity to marry or have children.
    Question. What are the most significant concerns that young 
enlisted are generally worried about? What is the most commonly cited 
personnel problem?
    Army Answer. Results from the most recent Army-wide survey. ``Fall 
1997 Sample Survey of Military Personnel,'' provide some insight on the 
levels of satisfaction regarding quality of life and job among Active 
component soldiers. The semi-annual survey provides Army leadership 
with information to develop plans, assess policies, and evaluate 
program operations.
    The survey question was, ``Based on your Army experience, how 
satisfied or dissatisfied are you with the following?'' The response 
scale was: Very Satisfied, Satisfied, Dissatisfied, and Very 
Dissatisfied. The percent satisfied reported below includes ``very 
satisfied'' and ``satisfied.'' The percent dissatisfied is the 
``reverse'' of the percent satisfied, e.g., 72.7 percent are 
dissatisfied with the ``Amount of pay (basic).''
    Among all enlisted personnel, the lowest levels of satisfaction 
are:

                                                                 Percent
                                                         very satisfied/
        Aspect of Army life                                    satisfied
Amount of pay (basic).............................................  27.3
Retirement benefits...............................................  28.3
Opportunity to select a job, training or station of my choice.....  32.2
Special pay (such as bonuses).....................................  33.1
Amount of Variable Housing Allowance/COLA.........................  33.2
Availability of government housing................................  36.4
Amount of personnel available to do work..........................  39.2
Amount of equipment/supplies......................................  39.9
Amount of time separated from family..............................  40.2

    Among junior enlisted personnel (Private through Specialist), the 
lowest levels of satisfaction are:

                                                                 Percent
                                                         very satisfied/
        Aspect of Army life                                    satisfied
Amount of pay (basic).............................................  29.1
Amount of time separated from family..............................  32.5
Special pay (such as bonuses).....................................  33.7
Opportunity to select a job, training or station of my choice.....  33.9
Availability of government housing................................  35.5
Amount of Variable Housing Allowance/COLA.........................  35.8
Amount of equipment/supplies......................................  37.3
Quality of equipment/supplies.....................................  39.5
Retirement benefits...............................................  41.2
Amount of personnel available to do work..........................  42.8

    Among all enlisted personnel, the highest levels of satisfaction 
are:

                                                                 Percent
                                                         very satisfied/
        Aspect of Army life                                    satisfied
Commissary........................................................  78.2
Quality of recreational services..................................  75.4
Availability of recreational services.............................  74.0
Post exchange.....................................................  72.7
Geographic location of jobs.......................................  70.4
Job security......................................................  67.6
Quality of military dental care...................................  66.9

    Among all enlisted personnel, (Private through Specialist) the 
highest levels of satisfaction are:

                                                                 Percent
                                                         very satisfied/
        Aspect of Army life                                    satisfied
Commissary........................................................  79.5
Post exchange.....................................................  77.9
Job security......................................................  74.3
Quality of recreational services..................................  73.1
Availability of recreational services.............................  71.2
Quality of military dental care...................................  68.3
Geographic location of jobs.......................................  66.8
Level of educational benefits.....................................  66.2

    Navy Answer. The most significant concerns of the junior enlisted 
Sailors center around the lack of stability in the military. They are 
concerned about the downsizing and the continuous talk about the fiscal 
realities of today. Both of these directly affect the advancement 
opportunities and quality of life of Sailors.
    Marine Corps Answer. The Marine Corps is an exceptionally young 
force. Nearly half of our enlisted Marines are in the bottom three 
grades (E1-E3) and of those, only 20 percent are married. Their 
concerns are housing, finances, transportation and overall quality of 
life--the same things that all young people starting out are concerned 
about. However, service members have the additional concern of being 
away from home frequently for long deployments, as well as numerous 
shorter exercises while at their home station.
    Air Force Answer. There are many issues that concern not just our 
young enlisted members but all Air Force members. We've identified and 
focused our attention on seven quality of life priorities that address 
the major concerns of all our members. They are: (1) pay/compensation/
benefits, (2) PERSTEMPO, (3) quality health care, (4) adequate housing, 
(5) retirement benefits, (6) community programs, (7) educational 
opportunities. We do not have any survey or statistical data available 
to identify the most commonly cited personnel problem.
    Question. What kind of personnel problems are you hearing that 
platoon and company commanders, and sergeants are confronted most in 
their positions as troop leaders?
    Army Answer. Depending on the size and composition of the command, 
problems may vary. Most frequent problems include dealing with the lack 
of adequate housing, spousal employment opportunities, and 
indebtedness. Other problems frequently cited include: dislike for 
current duty, complaints about frequent deployments, lack of time to 
pursue civilian education, and lack of free time. Some dependent 
related problems also exist, particularly with single or separated 
parents. Soldiers in deployed areas with problems back home may not 
function as well in stressful situations as their contemporaries who do 
not have such problems.
    Navy Answer. The problems heard most often about junior Sailors are 
lack of respect for military seniors and inability to manage their 
personal lives. Many have trouble with respect because they enter the 
military distrusting many of their institutions and leaders. Thus 
respect is often not given simply for the rank or position a person 
holds. Those that have trouble managing their personal lives usually 
exhibit a lack of self-discipline. Navy leadership is committed to 
providing leadership that commands respect and dedicated to developing 
self-discipline in its Sailors at recruit training and continuing 
throughout the career regardless of its length.
    Marine Corps Answer. The close relationship of the small unit 
leaders with his young Marines allows him to hear all manner of 
problems and concerns. On the professional side, Marines are concerned 
with promotions, deployment schedules, and their status within the 
platoon. On the personal side, the most often cited problems deal with 
relationship issues, financial concerns, spouse employment, and child 
care.
    Air Force Answer. Tempo is identified by commanders and first 
sergeants as the most pressing readiness issue. Tempo, along with 
compensation and benefits, are cited by members as the most pressing 
retention issues. In addition, members have expressed concern about 
Outsourcing and Privatization, (``will I still have a job''), care for 
families of deployed members, and health care/TRICARE.
    Question. How do the young enlisted feel about their standard of 
living in the military?
    Army Answer. There is no one answer that will suffice for all 
soldiers' standard of living, since geographical locations play a large 
role as well as the mission of the command. Soldiers on their first 
enlistment are generally single, and live in the barracks, usually with 
a room-mate. Many soldiers cite lack of privacy as a detriment to 
service life, others cite dislike for their roommates, restrictions on 
decorating living areas, playing music and social acclimation in 
general. Young married soldiers often have difficulty in obtaining 
suitable, affordable housing. Living in a high cost area, coupled with 
commuting costs, furniture costs, and other housing related problems 
also contribute to frustration. Spousal employment is also a factor, as 
well as child care facilities, post facilities and activities. Pay and 
compensation are problems for some young soldiers, especially the young 
married soldiers just starting out.
    Navy Answer. Both junior and senior enlisted Sailors do not expect 
to become wealthy on the salaries they receive. Most feel, however, 
they are not adequately compensated to the same extent a civilian would 
be for the work and sacrifices required to support our forward 
presence. Most live fist-to-mouth. Most spouses of married members must 
work in order to enjoy the standard of living they believe they 
deserve.
    Marine Corps Answer. There are differing levels of satisfaction 
among young enlisted Marines about their standard of living. This is 
evidenced by the Marine Corps Quality of Life Study, conducted by the 
Navy Personnel Research and Development Center (NPRDC) in 1993, which 
surveyed over 10,000 Marines on various aspects of their life. A total 
of eleven life areas, or ``domains'' were measured; the ``Income and 
Standard of Living'' domain was one of these elements. The study 
analysis, published in January 1995, reported a number of results that 
address the question:
    a. Of the top eight reasons given for ``the best thing about being 
a Marine,'' pay and benefits ranked sixth, with 4.5 percent selecting 
this option. Approximately 40 percent of the members thought they would 
be better off (financially) as civilians.
    b. A key measure of satisfaction with pay level is spousal 
employment and members holding second jobs. Sixty percent of the 
respondents had spouses who were working. Ten percent of responding 
members had a second job, and 18 percent were seeking a second job.
    c. The Marine Corps will re-administer the Quality of Life study in 
1998.
    Air Force Answer. We recently conducted a quality of life survey in 
the Air Force which included questions about the adequacy of pay and 
specific allowances--issues we believe contribute significantly to 
standard of living impressions. Similar to officers and other enlisted 
members, our younger airmen, gave us unfavorable feedback on these 
compensation issues. Only 18% of first-term and 12% of second-term 
airmen assessed their pay to be as good or better when compared to 
their counterparts in the private sector. This indication of pay 
inadequacy was reinforced by responses that pay is ``fair and 
equitable'' by only 28% of first-term and 23% of second-term members. 
Reviews of housing allowances faired only slightly better as 
satisfaction was limited to 33% and 29% of first- and second-term 
airmen (respectively). Approximately 60% of active duty Air Force 
members receive housing allowances because of our limited base housing 
capacity. Temporary duty allowances were also negatively viewed, with 
under 60% of both first- and second-term members expressing 
dissatisfaction with these reimbursements.
    Interviews with unit commanders and surveys of first sergeants tell 
us fair and competitive compensation is the number one quality of life 
issue related to retaining quality people. For several years, the Air 
Force has maintained a focus on compensation because of our 
understanding of its direct impact on standard of living perceptions.
    Question. Do the young enlisted perceive their pay, education 
opportunities, work environment, etc., is as good or better than 
civilians in their age group?
    Army Answer. Generally, the average soldier perceives himself of 
being ahead of civilians in the same age group (18-21). In terms of 
pay, the average young soldier is compensated pretty much in line with 
civilians of a similar age in minimum wage jobs. Soldiers generally 
feel they are given more responsibility at a younger age. According to 
surveys, soldiers feel they are doing a valuable service, and they 
generally cite a satisfactory experience in the Army. Young soldiers 
see more opportunities for travel and adventure compared to their 
civilian counterparts. Those soldiers located in areas with educational 
opportunities also are satisfied with the chance to pursue civilian 
education.
    Navy Answer. In our 1997 Navy-wide Personnel Survey, we asked 
Sailors how they felt about many of these issues. In general, it seems 
that junior Sailors are happy with their work environment, jobs, and 
opportunities in the Navy but do not believe the pay is adequate, or is 
an incentive to stay in the Navy.

                              [In percent]
------------------------------------------------------------------------
                                                         E1-E3    E4-E6
                                                         agree    agree
------------------------------------------------------------------------
Satisfied with current job............................     52.1     63.0
Like Navy work........................................     57.3     76.1
Satisfied with physical work conditions...............     57.7     64.3
Glad I chose the Navy over other alternatives.........     39.5     58.6
Adequately paid.......................................     20.7     22.6
Amount paid is a reason to stay in the Navy...........     20.3     27.7
------------------------------------------------------------------------

    Marine Corps Answer. The Marine Corps Quality of Life study, 
conducted by the Navy Personnel Research and Development Center (NPRDC) 
in 1993, surveyed over 10,000 Marines on various aspects of their life. 
A total of eleven life areas, or ``domains'' were measured; the 
``Income and Standard of Living'' domain and the ``Work'' domain, were 
two of these elements. The study analysis, published in January 1995, 
reported a number of results that address the question:
    a. Of the top eight reasons given for ``the best thing about being 
a Marine,'' pay and benefits ranked sixth, with 4.5 percent selecting 
this option. Approximately 40 percent of the members thought they would 
be better off (financially) as civilians.
    b. A key measure of satisfaction with pay level is spousal 
employment and members holding second jobs. Sixty percent of the 
respondents had spouses who were working. Ten percent of responding 
members had a second job, and 18 percent were seeking a second job.
    c. The greatest dissatisfaction expressed by respondents was with 
pay benefits, followed by opportunities for personal growth and 
development on the job. Eighty-four percent reported they were working 
in their own specialty (MOS).
    d. Forty-four percent stated they would be ``much more likely'' or 
``more likely'' to have their ideal jobs now than if they were 
civilians. The largest discrepancy between what these members' present 
jobs offer and their ideal jobs was in the amount of autonomy they feel 
they had.
    e. Regarding perceived adequacy of training and job related 
problems, 53 percent believed they were adequately trained to do their 
jobs. Twenty-one percent stated they did not believe they were 
adequately trained, 26 percent were neutral. Junior enlisted were found 
to experience more job related problems more frequently than senior 
enlisted or officers.
    Air Force Answer. In the 1997 Quality of Life (QoL) survey, only 
16% of our enlisted members believe their pay was as good or better 
than the private sector. However, a 1994 RAND study showed that junior 
enlisted pay growth exceeds that of the junior members of the civilian 
labor market. This is, in part, driven by a rapid salary growth (pay 
system front-loads both raises and promotions) for junior enlisted 
members. Across OSD, the average enlisted member receives 10 pay raises 
in first 4 years--almost 80% increase.
    As for education, the 1997 QoL survey revealed that three of the 
top five reasons enlisted people stay in the Air Force are educational 
programs--Tuition Assistance (#1), Air Force off-duty education (#4) 
and Community College of the Air Force (#5).
    Finally, in the same survey, 73% of enlisted members report the Air 
Force is a good place to work, 66% reported the Air Force provided good 
QoL at their duty station and 71% stated their family was supportive of 
their career.

                Financial Conditions of Military Members

    Question. A recent Department of Defense survey asked enlisted 
members to rate their financial condition on a five-point scale:
    1. ``In over my head;''
    2. ``Tough to make ends meet, but keeping my head above water;''
    3. ``Occasionally have some difficulty making ends meet;''
    4. ``Able to make ends meet without much difficulty;'' and
    5. ``Very comfortable or secure.''
    The survey reported that nearly half expressed only occasional or 
little concern over their financial conditions. As you talk to enlisted 
members, does the subject concerning their overall financial well-being 
get discussed?
    If so, is it your impression that most enlisted personnel are able 
to make ends meet with their present household income?
    What, in your opinion, are the most significant causes of personal 
financial problems? Do you perceive it is due to immaturity on the part 
of the service member and/or his spouse regarding finances in general; 
living beyond one's means; getting married at a young age; or the easy 
access to credit and credit cards?
    Is there any evidence that problems with personal finances impact 
on the operational readiness of individuals? Explain.
    Army Answer. Yes, I often talk to enlisted members about their 
overall financial well-being. Adequate compensation is always a hot 
topic. I have found that most enlisted personnel are generally able to 
make ends meet with their present household income. However, recent 
surveys find that 18 percent of Army service members reported having 
difficulty paying their bills nearly every month. The members that were 
most likely to have difficulty included enlisted (E1-E4), mid-enlisted 
(E5-E6), single parents, and those with special needs family members. 
However, some units have had great success by assigning a 
noncommissioned officer to act as a financial advisor for their 
soldiers.
    In addition to the reasons you mentioned for the financial 
conditions of our junior troops, field counselors note the following 
reasons for personal financial troubles:
    1. Unemployment prior to entering the military;
    2. Large medical bills prior to entering the military (child birth 
without insurance);
    3. Support of parents or sibling(s);
    4. Assuming debt of new spouse; and
    5. Lack of education.
    Financial difficulties experienced by the military member can 
affect military readiness. Members can be considered non-deployable or 
can be brought home early from a deployment or overseas assignment, and 
in extreme cases can be separated early from the military for financial 
reasons. Financial indebtedness also can impact a soldier's ability to 
acquire a security clearance, affect his job focus, consume the 
Commanders and the soldier's time and cause unneeded social and 
emotional stress on the member.
    We are fine tuning our Financial Education Program to meet the 
needs of today's soldiers. Preparation for the known, as well as the 
unknown, financial burdens can ease the effect. Army Community Service 
(ACS) Consumer Affairs and Financial Assistance Program (CAFAP) offers 
a variety of programs and services to address the financial needs of 
service members and their families including, proactive education, and 
financial management training and counseling.
    CAFAP helps commanders establish an educational and counseling 
program in personal financial affairs, teaches soldiers self-
sufficiency, reduces indebtedness, and reduces high demands for 
emergency financial assistance through classes on money management, 
credit, financial planning, insurance and consumer issues.
    CAFAP also provides basic education (prevention) including money 
management classes for soldiers and families on banking, checkbook 
management, debt liquidation, credit, car buying, local consumer laws, 
consumer rights and obligations, savings and investing, financial 
planning for deployment, budget development, income tax assistance, and 
record-keeping.
    The Army is also doing the following:
    1. Developing the 1st Termers Financial Management Education 
Program designed for ACS CAFAP/units and Training and Doctrine Command 
(TRADOC) school houses;
    2. Making Financial Planning for Relocation mandatory for E4 and 
below;
    3. Revamping it's Financial Management Prevention Education 
Program;
    4. Through TRADOC, planning to expand training in the school house 
and devising a method of providing training to Delayed Entry Personnel; 
and
    5. Working with the Office of the Secretary of Defense to develop a 
Personal Financial Management Distance Learning Program and a 
Certification Program for Financial Counselors.
    Navy Answer. Yes, overall financial well-being gets discussed as it 
pertains to their ability to provide for themselves and their families 
in the manner they could if they were civilians. The fact that their 
raises are capped at .5% below Employment Cost Index (EPI) tells them 
they are losing purchasing power.
    Personnel who live in a very financially disciplined manner, who 
have adequately planned their families and expenditures to match their 
income and those who reject easy credit can make ends meet. If any of 
the above is missing, financial problems can arise quickly.
    The most significant cause of personal financial problems is the 
lack of personal financial education. You can't watch television, 
listen to the radio, or even answer the phone without being inundated 
with easy credit and opportunities to increase your debt. Just beyond 
the gate of any military base in the country, one can see billboards 
advertising ``Easy credit to E-1 and up.'' Yet some of our junior 
enlisted--those being given this credit--have trouble developing a 
basic budget and balancing a check book. Each command has trained 
Command Financial Specialists to teach, counsel and guide Sailors, but 
by the time personal financial management problems come to the 
command's attention, the damage is already done. This is a recipe for 
financial disaster, when combined with new-found independence, a 
regular paycheck, and no/few bills. Studies have shown that the 
majority of Navy bankruptcy filers are E-5 and E-6 level petty 
officers. We believe that some of these mid level enlisted supervisors 
may be declaring bankruptcy because they cannot handle the debt they 
accumulated when they used easy credit to provide a standard of living 
for their families that was inconsistent with their income level.
    There is clear evidence that personal financial problems do have an 
impact on operational readiness and are a significant drain on our 
resources. We know that on average, 60% of the security clearances that 
are canceled are for personal financial reasons. We also spend over $36 
million a year on direct salary costs to process letters of 
indebtedness on our Sailors that are received by commands from lenders. 
And of course, leading petty officers, leading chiefs, and division 
officers all must take time from their normal duties to address the 
financial indebtedness issues of subordinates.
    Marine Corps Answer. As we have conducted focus groups with Marines 
and family members, financial well-being is often discussed. Of course, 
everybody would like to have more money. But money is not the reason 
young Americans join the Corps. Still, as with life's other difficult 
vocations--not being burdened with the frustration of inadequate pay 
and allowances frees a Marine to apply his dedication to the task at 
hand.
    The majority of enlisted Marines are able to make ends meet. 
Marines generally are a responsible lot, and they recognize a hallmark 
of responsibility is to live within one's financial means. Of course, 
annual pay raises, longevity raises, and promotion raises are all 
highly anticipated, and many Marines have working spouses. But by 
taking advantage of all elements of military compensation--including 
commissary and exchange privileges--Marines at any grade can reasonably 
make ends meet.
    There are numerous causal factors to personal financial problems. 
Certainly the lack of basic personal financial management skills, 
immaturity, easy access to credit, and young marriages may all be 
contributing factors.
    Personal financial responsibility is stressed throughout the Corps, 
particularly toward our junior enlisted Marines. Through the Marine 
Corps Institute, we offer correspondence courses on personal finance, 
and our Family Service Centers are always available for financial 
counseling.
    For every Marine with personal financial problems, there are many 
others of the same grade and family circumstances who are making ends 
meet. Their counsel can go a long way toward helping their fellow 
Marine better understand and minimize his financial problems.
    While personal financial problems are a concern, we have no 
evidence that the operational readiness of individuals is impacted. Of 
course, preoccupation with financial difficulties (or any other matter) 
distracts a Marine from the mission at hand. Leaders, therefore, take 
whatever steps are necessary (such as referral to the Navy Relief 
Society or a Family Service Center) to help the individual deal with 
the difficulties.
    Air Force Answer. Yes. Tempo, along with compensation and benefits, 
are cited by members as the most pressing retention issues. To address 
these concerns, Air Force Family Support Centers (FSCs) offer various 
classes in personal finances. Known as the Personal Financial 
Management Program (PFMP), it offers information, education, and 
personal financial counseling to help individuals and families maintain 
financial stability and reach their financial goals. Upon arrival at 
their first duty station, all new Air Force members must attend a FPMP 
training class covering such topics as checkbook maintenance, 
budgeting, and credit management. In fiscal year 1997 FSCs held PFMP 
classes that contacted 176,000 members. They also provided individual 
counseling sessions for 51,500 members.
    Yes, it is our impression that most enlisted personnel are able to 
make ends meet with their present household income, the 1997 Air Force 
Needs Assessment Survey found that only 13% of active duty enlisted 
personnel and 15% of enlisted spouses stated they had difficulty paying 
bills nearly every month.
    All of these factors contribute to personal financial problems. The 
Air Force provides training to address all of these factors and build 
the personal financial management skills and awareness needed in 
today's credit-based consumer society. For our new enlistees, the Air 
Force provides 2-4 hours of personal financial training at basic 
training, 2-4 more hours at technical school, and 2-3 hours at the 
first duty station. The training focuses on personal and family 
budgeting, checkbook management, credit management, savings, state or 
country liability laws, car buying, deployment financial readiness, 
crisis financial management, and local fraudulent business practices. 
For personnel of all ranks, each base Personal Financial Management 
Program (PFMP) Manger offers one-on-one counseling and recurring 
classes on the full range of personal financial topics.
    A January 1997 Army/Air Force Exchange Service (AAFES) study of 10 
to 20 percent of PFMP case files at 10 Air Force bases found 13 percent 
of monthly expenditures go to car payments, 11 percent to credit cards, 
16 percent to rent/mortgage, 6 percent to other installment loans, 5 
percent to utilities, 2 percent of AAFES Delayed Payment Program, with 
the remaining 47 percent going to food, insurance, gas, clothes, phone, 
entertainment, etc.
    A July 1996 through November 1997 survey of Keesler AFB technical 
school students found 2726 trainees in debt; equating to 29 percent of 
the total 9,308 trainees. The average debt was $8,142 per person. 
Separately, Lackland AFB technical schools surveyed 5902 trainees in 
1997 and found that 2,604 (44 percent) had debts averaging $5,337 per 
individual. Credit cards and auto loans were the two primary types of 
debt reported at both schools.
    The 1997 DoD Enlisted Career Intentions Survey (ECI) found that 
about 70 percent of E-4s and E-5s said discretionary income was 
available at least sometimes.
    There is no evidence that problems with personal finances impact on 
the operational readiness of individuals.
    Although personal finances sometimes require time off from work, 
this trend is improving. In the 1995/1996 Family Support Needs 
Assessment Survey, 18% of Air Force people reported needed time off (in 
the past month) due to financial problems--finances ranked third after 
family member health and transportation. In the 1997 survey, only 15% 
reported needing time off--finances ranked sixth.

                     Recruiting Enlisted Personnel

    Question. The services recruit over 190,000 Active duty personnel 
each year. Recruiting quality enlisted members is becoming more 
challenging, because the services are having to deal with a decline in 
youth interest in the military at a time when the military is 
experiencing additional personnel reductions, budget constraints, and 
an increase in the number of deployments. What is your recruiting goal 
for non-prior and prior service accessions for 1998? Are your 
recruiters achieving their mission and/or monthly goals?
    Army Answer. The 1998 annual recruiting goal is 67,950 non-prior 
service accessions and 4,000 prior service accessions. Through March, 
the Army has accessed 27,492 soldiers, or 99.7 percent of the 
recruiting mission to date (27,555). In the aggregate, the Recruiting 
Command has not achieved its monthly contract mission (number of 
applicants who enter the Delayed Entry Pool (DEP)) since September 
1996, but has achieved its monthly accession missions (number of 
recruits who come on Active duty). The effect of meeting accession 
goals, while not meeting contract goals is that the size of the DEP 
gets smaller. As the DEP gets smaller, the recruiters must work harder 
to get contracts ``in close,'' and overall recruiter productivity goes 
down.
    Navy Answer. For 1997, 48,009 were non-prior service and 1,116 
prior service for a total of 49,125. For 1998, our goal is 54,872 non-
prior service and 1700 prior service for a total of 56,572. For fiscal 
year 1998, the Navy is not making its monthly goals. Through March, 
Navy has missed accession goal by 2,548.
    Marine Corps Answer. The non-prior service and prior service (total 
force) accession goal for 1997 was 40,369. The Marine Corps accessed 
40,716, 100.9% of its goal for the year. The Marine Corps has exceeded 
the Department of Defense quality goals of 90% Tier I's and 60% I-3A's. 
During Fiscal Year 1997 the Marine Corps accessed 96.2% Tier I's and 
66.4 I-3A's. The non-prior service and prior service accession goal for 
Fiscal Year 98 through February was 14,905. The Marine Corps has 
accessed 14,988, 100.6% of its assigned goal. In fact, we have exceeded 
assigned goals for the past 33 consecutive months. To date in fiscal 
year 1998, we have contracted 96.0% Tier I's and 66.3% I-3A's. This is 
ahead of where we were at this time last year. Marine Corps recruiting 
is on track to meet or exceed all quality and quantity goals for fiscal 
year 1998.
    Air Force Answer. Our fiscal year 1997 non-prior service recruiting 
goal was 30,200 and the prior service goal was 110. Both goals were 
achieved.
    Question. Give some examples of the Military Occupational 
Specialties (MOS) you are having problems enlisting personnel into. Are 
these MOSs defined as low skill, mid-level skill, or high-skill job 
areas?
    Army Answer. Currently, the Army is overcoming challenges in 
recruiting for the combat arms and combat arms mechanic MOSs. Based on 
initial-entry aptitude requirements, these MOSs are considered low 
skill when compared to other MOSs. Command emphasis and an increase in 
monetary incentives have directly contributed to an improvement in 
recruiting and operating strengths in these MOSs. The table, below, 
displays year-to-date recruiting and strength data for the seven most 
critical combat arms and combat arms mechanic MOSs:

                              [In percent]
------------------------------------------------------------------------
                                            YTD recruiting
 Military skills Operations  -------------------------------------------
          strengths             Fiscal     Fiscal     Fiscal     Fiscal
                               year 98    year 97    year 98    year 97
------------------------------------------------------------------------
Infantryman.................        100         96         94         60
Field artillery crewmember..        107        101         92         54
Armor crewmember............        110        104         99         70
Tank turret mechanic........         88         77        106         38
Bradley turret mechanic.....         77         69        102         31
Tank systems mechanic.......         96         91        100         93
Bradley systems mechanic....         94         86        110         60
------------------------------------------------------------------------

    Navy Answer. Navy is having difficulty recruiting Nuclear Field 
candidates, Fire Control technicians, and General Detail Sailors 
(GENDET). Nuclear Field and Fire Control Technicians are high skill job 
areas while GENDET is a low skill job area.
    Marine Corps Answer: Enlisted recruits are given enlistment 
guarantees in the form of enlistment programs, which are groupings of 
various skills or military occupational specialties (MOS). The ``high 
tech'' occupational fields of Data/Communications Maintenance, 
Communications Electronics, Signals intelligence, and Aviation 
Operations occupational programs present a challenge to our recruiters 
due to their higher line score requirements. The Marine Corps is 
addressing this challenge by offering a $2,000 and $3,000 enlistment 
bonus as incentives to those individuals enlisting for these hard-to-
fill programs. Additionally, the Commanding General, Marine Corps 
Recruiting Command has placed additional leadership focus on filling 
these high tech programs and tasked the Region Commanding Generals and 
District Commanding Officers with filling 100% of the ``high tech'' 
program requirements.
    Air Force Answer: Some examples include Combat Control (1C2X1), 
Pararescue (1T2X1), Crypto--Linguists (1N3XX--Germanic, Romance, Far 
East, Mid-East, and Slavic), and Explosive Ordinance Disposal (3E8X1). 
All of these career fields are considered high skill areas. Although 
recruiting these individuals is challenging, we continue to meet 
targets for all of these career fields except Combat Control. In fiscal 
year 1995 and fiscal year 1996, we achieved 78 percent of our Combat 
Control recruiting target and improved to 99 percent in fiscal year 
1997. We've implemented a number of initiatives to enhance Combat 
Control and Pararescue recruiting to include targeted advertising, 
specialized recruiting teams, and additional point of sales material.
    Question. What is the average cost for each of the services to 
recruit and train a new service member?
    Army Answer. The following data is based on fiscal year 1997 Active 
Army accessions.

Recruiting Cost:
    Recruiting Cost Per Accession............................\1\ $10,163
    Military Entrance Processing Command......................   \2\ 720
        Total Recruiting Cost.................................    10,883
Training Cost:
    Reception Station (3 days)................................   \4\ 600
    Basic Training (8 weeks).................................. \4\ 8,900
    Advanced Individual Training \3\..........................\4\ 17,500
        Total Training Cost...................................\4\ 27,000
        Total Cost............................................    37,883

\1\ This cost includes Army College Fund, Enlisted Bonus, Loan Repayment 
Program, Military Pay Army, civilian pay, advertising, communication, 
computer (ADP), recruiter support, and facilities. Because this is an 
average cost per accession, it can vary significantly from year to year 
based on total number of accessions.
\2\ This cost includes Military Pay Army, civilian pay, communication, 
ADP, supplies, facilities, physical exams and Armed Services vocational 
Aptitude Battery test.
\3\ This is based on 10 weeks average.
\4\ This cost includes student's salary, base support, medical, 
ammunition, and facilities.

    Navy Answer. The average cost to recruit a Navy sailor is 
approximately $6,800 for fiscal year 1998.
    Marine Corps Answer. The average cost to recruit an enlisted 
Marine:

Fiscal year 1998..............................................    $5,018
Fiscal year 1999..............................................     5,108

    This cost is determined by the Office of the Assistant Secretary of 
Defense for Accession Policy.
    The average cost to train an enlisted Marine for his/her first 
permanent duty station is as follows:

------------------------------------------------------------------------
                                          Fiscal year 98  Fiscal year 99
------------------------------------------------------------------------
O&MMC...................................          $1,799          $1,847
MPMC....................................          17,910          17,910
PANMC (AMMO)............................             (*)           1,246
                                         -------------------------------
      Total.............................          19,709         21,003
------------------------------------------------------------------------
* Ammunition data prior to Fiscal year 1999 does not allow for a
  breakdown of costs down to the individual school. Fiscal year 1999
  costs are only for enlisted entry level MOS producing courses.

    These costs do not include costs budgeted by other armed services 
to train Marines at other service locations.
    Air Force Answer. The average cost to recruit a new enlisted member 
into the Air Force is $4,400. On average, it then costs $27,502 to 
train that new recruit. This includes $12,654 for Basic Military 
Training and $14,848 for advanced training. Costs include fixed and 
variable military pay, civilian pay and O&M in fiscal year 1998 
dollars.
    Question. Most enlistees enter the Delayed Entry Program (DEP) 
before reporting to duty. The services use the DEP to control the flow 
of recruits into training; the average time in the DEP is approximately 
four months. Does your service have to reach into the DEP sooner than 
anticipated because you are not making your recruiting mission? If so, 
explain how this impacts your overall recruiting mission.
    Army Answer. The Army has not had to reach into our DEP this fiscal 
year to make its accession requirements. We did reach into our DEP last 
fiscal year so we can talk to the impacts. First, a decreased DEP 
creates a ``just in time delivery'' recruiting environment in which 
recruiters are potentially recruiting large numbers of individuals in 
the same month they need to access to training. This can cause 
recruiters and all levels of the command to focus on recruiting markets 
that are available to access now and potentially lose track of 
investing time in other recruiting markets, such as High Schools. 
Secondly, reaching into the DEP reduces the ``carry over'' into the 
next fiscal year, which adds to the overall recruitment mission for the 
coming year--not only would the command need to make its annual 
requirement, but it must also rebuild the DEP to acceptable levels. 
Both of these circumstances affect other aspects of recruiting in terms 
of command focus, resource requirements, advertising strategies, and 
use of the incentive program, to mention a few. It can take a year or 
two to recover from a decreased DEP. This fiscal year is a recovery 
year for Army recruiting. One of the major objectives this year has 
been to establish a stable recruiting environment for our recruiting 
force. The Army is on track this year to accomplish these goals.
    Navy Answer. The Navy reached into its DEP for fiscal year 1997 
mission attainment and continues to do so for fiscal year 1998. The 
Navy now goes into each month without a sufficient number of identified 
accessions forcing recruiters to find individuals who can access in 
that month. The current average time in DEP is 3 months but with many 
accessions shipping to RTC within the month. This is not an efficient 
way to recruit nor do the recruits have an opportunity to participate 
in DEP functions and the associated training.
    Marine Corps Answer. The extent to which we must reach out farther 
than desired in the DEP to make shipping numbers varies with the time 
of the year. There is a definite yearly recruiting cycle that drives 
the degree to which we must move recruits up in the shipping queue. In 
the summer shipping months, we are shipping recruits who just graduated 
from high school and who have been in the DEP since the previous 
summer. These applicants typically want to ship as soon after high 
school graduation as possible, making the demand for June, July and 
August shipping slots high. As a result, we do not have to reach out in 
the pool to move up recruits. As we enter into the winter and spring 
months, we often move up recruits to avoid large direct-contracting/
shipping requirements.
    We are not reaching into the DEP sooner than anticipated--we track 
pool development closely and are able to anticipate well in advance 
what actions are required to meet shipping requirements in any given 
month. It is fair to say that in the winter and spring months, we will 
reach farther into the DEP than we would like to, but not farther than 
we anticipate. The effects, however, of moving recruits up in the 
shipping queue during these months are generally good. First, moving 
recruits up reduces their chance of attrition from the DEP. Second, it 
helps reduce recruit depot attrition since we can then avoid shipping a 
recruit who essentially has no time in the DEP (more time in DEP 
equates to better chances of succeeding in recruit training). Third, 
moving them up helps the individual recruiter quality of life since it 
takes them out of the direct market. And finally, it helps improve 
overall quality of recruits since recruiters are given more time to 
find a quality applicant to ship later and are less inclined to work 
with marginally qualified applicants in a rush to meet direct shipping 
requirements.
    Air Force Answer. No, it has not been necessary to reach into the 
DEP. Our goal is to enter the fiscal year with 43% of the enlisted 
accession goal already in the DEP. We entered fiscal year 1997 with 
43.3 percent and fiscal year 1998 with 44.1 percent in the DEP.
    Question. Have you had to lower your original recruiting goals for 
1998? If so, by how much?
    Army Answer. The Active component recruiting mission for 1998 is 
71,950. In October 1997, the 1998 mission was 77,500 (5,500 more). The 
Army's recruiting goal is ``floated'' throughout the year to ensure a 
``fixed'' Army end strength is achieved by the end of the fiscal year. 
Retention and attrition efficiencies have helped the Army to lower its 
recruiting mission. Current projections show that a recruiting mission 
of 71,950 will enable the Army to achieve its end strength goal.
    Navy Answer. The Navy has not lowered its recruiting goals for 
fiscal year 1998, however, the Navy recognizes that it will not make 
its recruiting goals.
    Marine Corps Answer. The Marine Corps has not had to lower its 
recruiting mission this year. The Marine Corps has accomplished its 
recruiting mission and goals for 33 consecutive months. We have, in 
fact, increased our regular accession mission by 400 for fiscal year 
1998 from the original plan due to changes in the manpower plan.
    Air Force Answer. No. The prior and non-prior service enlisted 
accession goal for fiscal year 1998 is 30,300.
    Question. What percent of recruits change their minds and ask to be 
released from their enlistment contracts?
    Army Answer. As you know, losses occur while enlistees are in the 
Delayed Entry Program (DEP) for a variety of reasons. Last fiscal year, 
9.4 percent of the individuals we contracted to join the service 
changed their minds or dropped out for reasons such as ``buyers 
remorse'' or a civilian job or educational opportunity. There are other 
valid reasons for an enlistee not to meet his or her commitment for 
enlistment. Many delayed entry enlistees may fail to graduate from high 
school, may incur medical conditions or test positive for drugs or 
alcohol at the time of physical examination, or may incur a legal 
problem or other factor that disqualifies them from military service. 
These are acceptable losses from a practical point of view. We do seek 
to minimize losses of any type by maintaining the qualifications of our 
DEP members and by reconfirming the commitment of those who become 
concerned with their decision to enlist. We do, however, honor the 
decision of those applicants who firmly decide not to fulfill their 
contractual commitment. We feel this is consistent with our all 
volunteer force.
    Navy Answer. From fiscal year 1996 to fiscal year 1997, 8 percent 
of Delayed Enlistment Program personnel (DEPpers) declined enlistment. 
The gross number of contracts was 116,963, with 19,629 attrition from 
the DEP (16.8 percent) (to include medical and drug reasons) of which 
9,592 DEPpers declined enlistment (8 percent).
    Marine Corps Answer. Approximately 10 percent of contracted 
recruits in the Delayed Entry Program (DEP) change their minds and are 
categorized as Refusal to Ship (RTS). RTS composes approximately 35 
percent of total DEP attrition. The remainder of DEP attrition is due 
primarily to failure to graduate; pursuit of higher education; pursuit 
of officer program; overweight; failure of the initial strength test; 
drug violation; medical disqualification; and police involvement.
    Air Force Answer. In fiscal year 1997, 15.9 percent of recruits in 
the delayed entry program (DEP) dropped from the program before 
entering active duty. The average DEP drop rate from fiscal year 1990 
to fiscal year 1997 was 15.3 percent.
    Question. Have your recruiters seen any evidence that the quality 
of recruits is declining among the enlisted accessions? Are we 
enlisting recruits with average or above-average aptitude levels and 
reading skills?
    Army Answer. The Army continues to meet the quality standards set 
by the Army and the Department of Defense. We have seen an increase in 
competition for the youth that we define as our ``Prime Market''--that 
is, the group that contains High School Diploma Graduates, scores in 
the top 50 percent of the Armed Services Vocational Aptitude Battery 
(ASVAB) test, and that also meets all physical and moral 
qualifications. Of all recruits, 67 percent must score in the top 50 
percent of the ASVAB. These recruits are above the national reading and 
math norms as measured on the ASVAB. Finding these prime market 
prospects is increasingly difficult. Our recruiters have to wade 
through thousands of applicants who do not meet the requirements for 
entry into military service to find the prospects who do meet the 
qualifications. The quality of our recruits has remained high through 
our recruiters' hard work and through the programs that support the 
recruiting effort.
    Navy Answer. The Navy is recruiting five percent of non-High School 
Diploma Graduates and 65 percent Test Score Category I-IIIA. This is 
similar to fiscal year 1996 and fiscal year 1997 quality attainments. 
The Navy is enlisting recruits with average or above average aptitude 
levels and reading skills.
    Marine Corps Answer. The Marine Corps Recruiting Command continues 
to consistently exceed the quality standards of 60 percent Mental 
Category I-IIIA and 90 percent Tier I recruits set by the Department of 
Defense. During fiscal year 1997, the Marine Corps contracted over 66% 
Mental Category I-IIIAs (scoring above the 50 percentile on the Armed 
Forces Vocational Aptitude Battery) and 96% Tier Is (high school 
graduates/equivalents). Although the Marine Corps does not specifically 
isolate and report reading skills scores, our high school graduate 
percentages and ASVAB test scores indicate that we are recruiting a 
high quality applicant.
    Air Force Answer. The Armed Forces Qualification Test (AFQT) scores 
and the percent of recruits with High School diplomas are the Air 
Force's primary measures of accession quality. The AFQT measures an 
applicant's aptitude to include arithmetic reasoning, mathematics 
knowledge, word knowledge, and paragraph comprehension. The overall 
quality of Air Force accessions remains high. In fiscal year 1997, over 
99% of enlisted Air Force accessions had a high school diploma and 79% 
scored above average on the AFQT (Categories I-IIIA). This is well 
above the DoD floor of 90% High School graduates and 60% AFQT Cat I-
IIIA. In fiscal year 1998, we have noted a slight drop in the percent 
of enlistees scoring above average on the AFQT (78%), but are 
maintaining a 99% High School diploma enlistment rate.
    Question. The military has a number of career fields with require 
greater responsibility and a more diverse workload. Since the majority 
of accessions are young high school graduates, the military is often 
their first full-time job. Do you have any concerns that high school 
graduates will be able to perform the more complex or difficult tasks 
with our increasing weapons technology?
    Army Answer. No. Today's recruits continue to meet our expectations 
for quality and our recruiting standards will continue to be strictly 
enforced. In addition, the more complex weapon systems are designed 
with the participation of our soldiers to ensure they can be operated 
and maintained appropriately.
    Navy Answer. Navy recruits, to include high school graduates, 
continue to perform very well especially in highly technical skills and 
have expressed that skill training and responsibility is one of the 
most important reasons to join the Navy.
    Marine Corps Answer. All research conducted over the past 20 years 
indicates that applicants with a traditional high school diploma have 
the highest likelihood of completing their first term of enlistment. 
Graduating from a traditional high school demonstrates a certain degree 
of responsibility and shows that an individual is capable of success in 
a structured environment. As such, this is the best indicator of a 
recruit's ability to succeed in a military environment.
    To identify specific attributes, we administer the Armed Services 
Aptitude Battery (ASVAB) to all applicants. The results of this test 
are used to determine an applicant's suitability for specific technical 
and non-technical fields and to place recruits in job specialties where 
they are qualified and will likely succeed. This combined with the 
self-discipline and sense of responsibility instilled in recruit 
training adequately prepares young recruits for the difficult 
requirements of a technologically advanced military.
    Air Force. Answer. No. In fiscal year 1997, 99% of all enlistees 
were high school graduates and 79% scored in the top half of the Armed 
Forces Qualification Test. Just as in civilian industry, our enlisted 
personnel must be trained and experienced before being put to work. 
Each Air Force Specialty Code (AFSC) has five skill levels: apprentice, 
journeyman, craftsman, superintendent, chief enlisted manager; also 
referred to as one, three, five, seven, and nine skill levels.
    Each graduate of basic military training completes training 
tailored to a specific AFSC before being assigned to their first duty 
station. Some training leads to award of the ``3-level'' upon 
completion; others will need to continue on-the-job training at their 
first duty station to earn award of their ``3-level.'' Once a member 
completes a training level, they enter upgrade training for the 
subsequent level, provided they have attained the associated rank for 
that skill. The proper training foundation; supervised and certified 
up-grade training on the job or at technical schools; and grade-skill 
linkages ensure individuals are given the appropriate tools to perform 
the increasingly more complex and difficult tasks set before them.
    Question. Has the moral character or physical standards of new 
recruits declined in recent years?
    Army Answer. Rise in youth crime, reduced fitness of the youth 
population and other medically or morally disqualifying conditions 
(e.g. asthma, ritilin usage, tattoo policies, etc.) certainly make the 
individual recruiter's job more difficult, but we have not lowered our 
recruiting standards to accommodate these trends. The Army has, in 
fact, increased the standards for enlistment. Our threshold for certain 
waivers has increased as medical policies have been reevaluated or the 
law has changed. Our waiver trends for both moral and physical 
standards are low and have remained unchanged. Additionally, to assist 
enlistees in preparing for the physical requirements of basic training, 
we include physical fitness programs as a mandatory component of our 
Delayed Entry Program (DEP) training events.
    We do need your help in obtaining legislation that requires the 
release of criminal history information from all local jurisdictions. 
Release should include juvenile as well as adult criminal records.
    Navy Answer. The Navy has not experienced a decline in moral 
character or physical standards since all who enlist must meet set 
standards. The Navy most recently raised standards by requiring the 
drug and alcohol test at time of enlistment as well as upon arrival at 
Recruit Training Center.
    Marine Corps Answer. The moral character of our recruits has not 
declined in recent years. Our moral standards and associated waiver 
procedures continue to be the basis for training our recruiters and 
keeping them focused on the right types of applicants.
    Consistent with youth trends in general, the marijuana usage rate 
among applicants has risen in recent years and correspondingly more 
waivers are being granted for experimental marijuana use than in 
previous years. Applicants with experimental drug use are carefully 
screened and granted waivers only if they are otherwise exceptionally 
well qualified.
    The waiver process is investigative in nature and is designed to 
collect comprehensive information (both good and bad) from a variety of 
sources before a waiver determination is made. We look at the ``whole 
person'' when evaluating a waiver. Those who receive moral/drug waivers 
are considered to have favorable qualities that outweigh their past 
indiscretions and as such are considered to be of sufficiently sound 
moral character to successfully make the transformation into a United 
States Marine.
    The physical conditioning of our recruits starts immediately upon 
enlistment into the Delayed Entry Program. Anywhere from 5-10% of 
applicants cannot pass an Initial Strength Test (IST), requiring our 
recruiters to work with them during their time in the DEP to prepare 
them physically for recruit training. Prior to shipping to recruit 
training, all recruits are required by Marine Corps Order to pass the 
IST. The percentage of recruits failing the IST at the recruit depots 
is small. Those failing are put into a physical conditioning platoon 
where they typically make quick strides and enter training in less than 
three weeks. Clearly our recruiters are faced with a more sedentary 
recruiting market. This challenge is overcome through proper screening 
and progressive preparation of the recruit while in the Delayed Entry 
Program.
    Air Force Answer. No. The moral character and physical standards of 
new recruits appears to be increasing. The number of Air Force recruits 
requiring moral waivers have been declining since fiscal year 1993. The 
Air Force experienced a 17 percent drop in moral waivers from fiscal 
year 1993 (23.5 percent) to fiscal year 1997 (6.5 percent). We've also 
experienced a 12 percent decline since fiscal year 1995 in the number 
of recruits that attrit from basic military training for medical or 
physical reasons.

                            Recruiter Force

    Question. Describe to the Committee the size of your recruiting 
force, the number of recruiting stations you have across the country 
and overseas, and the percent of your stations you operate that are co-
located with another recruiting service.
    Army answer. The U.S. Army Recruiting Command is authorized 5,400 
but is staffed at 5,961 on production Regular Army recruiters and 1,358 
on production Army Reserve recruiters working from 1,568 recruiting 
stations worldwide. Outside of the Continental United States (OCONUS) 
recruiting locations include Alaska, Hawaii, South Korea, Japan, 
Panama, Puerto Rico, American Samoa, Guam, the Virgin Islands, and 
Germany. Of the 1,568 recruiting stations, 400 are Army only recruiting 
stations. The remaining 75 percent are co-located with at least one 
other recruiting service. The Army additionally has recruiters 
positioned at selected Army installations and other locations to meet 
other recruiting requirements, such as our medical specialty missions, 
our Special Forces officer and enlisted missions, our Army Reserve 
Chaplain missions, and our Regular Army and Army Reserve technical 
warrant officer missions.
    Navy Answer. The number of on board production recruiters as of mid 
March is 3,668. The projected number by the end of the fiscal year is 
4,000. There are 1,1195 recruiting stations and 91 percent are co-
located with another recruiting service.
    Marine Corps Answer. The recruiting force consists of 2,650 
production recruiters, with 744 support personnel. Our 2,650 recruiters 
work out of 1,458 Recruiting Sub-Stations (RSS) located across the 
country. 11 percent of the RSSs are Marine Corps only offices, 16 
percent are located with one other service, 22 percent are located with 
two other services, and 51 percent are located with three other 
services.
    Air Force Answer. With the recent addition of 80 new recruiter 
authorizations and the transfer of recruiters from overhead positions 
to production positions, we've increased the number of enlisted program 
recruiters from 1,093 to 1,209. Our production recruiters are at 1,093 
locations nation-wide. Eighty-three percent or 895 of these locations 
are shared with recruiters from other services.
    Question. What is the percentage of the Department of Defense (DoD) 
Active duty and Reserve mission your recruiters must recruit?
    Army Answer. This fiscal year, the Army must recruit 71,950 Active 
duty enlisted soldiers, 47,940 Army Reserve soldiers, and 56,638 Army 
National Guard soldiers for a total of 176,528. The DoD enlisted 
recruiting requirement for this year exceeds 337,000. The Army must 
recruit over 52 percent of the total DoD enlisted recruiting goal to 
meet our requirements. The Active Army recruiting goal is almost 38 
percent of the total Active duty DoD enlisted requirement, and the 
Reserve component goal is almost 72 percent of DoD's total requirement.
    Navy Answer. The fiscal year 1998 active duty Navy requirement is 
28.7 percent of the DoD active duty requirement. The fiscal year 1998 
reserve Navy requirement is 10 percent of the DoD requirement.
    Marine Corps Answer. Regular mission is 84.46 percent of total 
force mission; reserve mission is 15.54 percent of the total force 
mission. The Marine Corps' regular mission is 17.6 percent of total DOD 
active duty accessions during fiscal year 1998.
    Air Force Answer. The active Air Force portion of the overall 
fiscal year 1997 active DoD prior and non-prior service recruiting goal 
is 15.3 percent (DoD goal: 197,081, Air Force: 30,310). In fiscal year 
1998 the Air Force's share of the overall goal is 15.7 percent (DoD 
goal: 192,465, Air Force goal: 30,300).
    The Air National Guard (ANG) does not have a DoD mandated accession 
goal. Their fiscal year recruiting goals are based on projected 
programmed end strength, current vacancies, and projected losses for 
the upcoming fiscal year. For fiscal year 1998 the ANG goal is:

Officers:
    Prior Service.................................................   800
    Non Prior Service.............................................    50
        Total.....................................................   850
Enlisted:
    Prior Service.................................................  5500
    Non Prior Service.............................................  2850
        Total.....................................................  8350
                                                                  ______
          Total Projected ANG Gains for fiscal year 1998.......... 9,200
                        =================================================================
                        ________________________________________________

    The Air Force Reserve (AFR) does not have a DoD mandated accession 
goal. In fiscal year 1997, the AFR accessed 8,314 personnel (7254 were 
enlisted and 1060 officers). Of the total number accessed over 7200 
were prior service. For fiscal year 1998, the AFR recruiting goal is 
11,069.
    Question. Describe the time demands on a recruiter in order to have 
a successful recruiting mission. How many days/hours a week do they 
work? Are they under a great deal of stress?
    Army Answer. Our recruiters report that, on average, they spend at 
least 60 hours each week on the job. In general, they work six days a 
week. The job our recruiters are asked to do is a tough one. They are 
accountable for recruiting individuals who are fully qualified for 
military service, for maintaining their qualifications, and for 
mentally and physically preparing these enlistees for their basic 
training experience. At the same time, these noncommissioned officers 
must also remain tactically and technically proficient in their own 
right. All of this takes time.
    Recruiting is a stressful job. Most of the stress of recruiting 
relates to the job itself and the environment in which our recruiters 
operate. Our recruiters are selected from the Army's best 
noncommissioned officers (NCOs). Even under the best circumstances, 
they are told ``no'' more than they are told ``yes.'' This alone is 
stressful to NCOs accustomed to success. To address this we have a 
first class training program to prepare our recruiters for the work 
they are asked to perform, and we have a sustainment training program 
to help them maintain their proficiency. Our recruiters do not have the 
luxury of standing down to train. It is something we have to make part 
of our day-to-day work. This has been a point of special emphasis this 
past year. Success is a large part of a person's attitude toward their 
work. Training and leading our recruiters to success has a direct 
impact on morale.
    In the past several years, the Army has also made substantial 
investments in establishing a robust quality of life network and other 
programs to tackle the issues of recruiter and family support. These 
have been essential in ensuring we take care of the needs of our 
soldiers and families who are separated from the established military 
programs at our installations.
    Navy Answer. Recruiters do put in a lot of time. The 1996 DoD 
Quality of Life Recruiter Survey reported that 56 percent of recruiters 
(all services) worked 60 hours a week or more. 69 percent of recruiters 
reported voluntarily not taking leave due to job demands. Although the 
current environment of low unemployment and low propensity towards 
military service has made it difficult for recruiters, the Navy is 
actively working to enhance quality of life for Navy recruiters and 
their families.
    Marine Corps Answer. The typical recruiter's day starts at 0730 and 
ends around 1900-2000 in the evening. The evening period (1800-2000), 
while clearly beyond ``normal'' working hours, is critical to the 
recruiter's success. It is during this period when potential applicants 
are home from school or work and when parents are home to discuss 
enlistment options with their children. The typical recruiter also 
works a half day on Saturday . . . often this time is used to work on 
the physical conditioning of recruits in the Delayed Entry Program. 
Operations on Sunday are very limited, but are occasionally necessary 
when recruiters have to take applicants or shippers to the MEPS for 
Monday morning processing or participate in planned Family Day 
activities as part of our transformation program.
    The latest DoD Recruiter Survey supports the observation that our 
recruiters work very hard. According to the survey, Marine Corps 
recruiters were the largest group, by percentage (77 percent), to 
report having worked more than 61 hours per week. As a result, 
recruiter quality of life (QOL) remains a concern. The Marine Corps is 
making progress in many areas to better the recruiters QOL and make 
recruiting duty a more sought after assignment. Major initiatives 
include enhanced awards and recognition programs, cost of living (COLA) 
offsets, enhanced medical, dental and child care, and preferential 
housing and spouse employment programs.
    Air Force Answer. Recruiters face a challenging environment. 
Propensity to enlist in the Air Force has stabilized, but remains low. 
The robust economy with low unemployment creates intense competition 
for high quality youth. The typical recruiter works up to 6 days a 
week. Most recruiters work well into the evening and on weekends to 
accommodate prospective applicants. A recent DoD survey of recruiters 
reported that more than \1/3\ of Air Force recruiters work 60 or more 
hours a week. This is a 32 percent increase since 1989.
    The Air Force has taken a number of actions to address the 
challenging recruiting environment. We've more than doubled our 
advertising budget since the early 90s ($7.7 million FY93 to $17.1 
million FY98). Through the addition of 80 new authorizations and the 
transfer of recruiters from overhead positions, we've increased the 
number of enlisted program recruiters from 1,093 to 1,209.
    In addition, we've pursued a number of initiatives to improve the 
quality of life for recruiters and their families. Cellular phones and 
lap top computers have recently been acquired to improve recruiter 
connectivity and effectiveness in the field. We recently introduced a 
screening tool for hiring recruiters, call the Emotional Quotient-
inventory questionnaire. Preliminary indications show that this tool 
will be useful in predicting a future recruiter's potential. The ``home 
basing'' program provides priority billeting, medical and dental 
appointments and other red carpet treatment when geographically 
separated recruiters and their families visit Air Force bases. The 
Leased Family Housing Program provides recruiters assigned to a high 
cost area with safe and affordable housing.
    Question. Enlistment bonuses and educational incentives are 
examples of tools used by recruiters to attract personnel to hard-to-
fill skills. Is your Service providing the maximum levels for 
enlistment bonuses and the College Fund program? If so, what is the 
average enlistment bonus provided, and the amount provided for the 
Services' College Fund? What other incentives are you using to achieve 
your ``fill rates''? Has your recruiting mission improved?
    Army Answer. Yes. Both of these amounts are the maximum amounts 
currently allowed under law. We offer the maximum enlistment bonus of 
$12,000 in five of our most critical military occupational specialties. 
We offer the maximum amount of $40,000 for the Army College Fund in 19 
of our priority skills. Both of these incentives require an enlistment 
term of at least four years.
    The average enlistment bonus for fiscal year 1997 was roughly 
$5,400 (budget/bonus takers). However, this amount is misleading as we 
include residual payments to previous year takers in the fiscal year 
1997 budget. In fiscal year 1997, the majority of College Fund takers 
enlisted for four or more years. Payments for the College Fund are 
based on actuary rates, determined by a Department of Defense Board. 
The average payment into the Educational Benefits Trust Fund was 
roughly $3,630 in fiscal year 1997. Through February 1998, that amount 
has increased slightly to $3,930.
    We also offer to pay up to $65,000 of a soldier's qualifying 
student loans through the Loan Repayment Program. Other incentives 
include guaranteed skill training, station of choice, Airborne and 
Ranger training, a guarantee for placement in a future college through 
the Army's Concurrent Admission Program, and accelerated promotion for 
education and scouting accomplishments.
    We have achieved both our quantity and quality marks through March 
1998. We feel that many of the actions we took to boost production in 
fiscal year 1997 have set the conditions for success in fiscal year 
1998.
    Navy Answer. Navy has a range of enlistment bonuses from $1,000 to 
$12,000 for Nuclear Field ratings. Most of our other high technical 
ratings receive a bonus between $7,500 and $9,500 during the winter and 
spring months. The amounts for the bonuses decrease during the summer 
when it is traditionally easier to recruit. The Navy College Fund is 
$40,000 for Nuclear Field ratings and $30,000 for other qualified 
individuals going into other Navy ratings. There are no other 
incentives to achieve ``full rate'' for fiscal year 1998. Second 
quarter has improved over first quarter as far as meeting the 
recruiting mission.
    Marine Corps Answer. The Enlistment Bonus (EB) and the Marine Corps 
College Fund (MCCF) are critical programs used to recruit qualified 
applicants into Marine Corps skill groups. The fiscal year 1998 MCCF 
program is budgeted at $4.1 million. That equates to 1,842 contracts or 
5.4 percent of accessions. The funding also equates to less than 0.70 
college fund programs per recruiter. The fiscal year 1999 MCCF program 
is budgeted at $4.4 million. But with increased funding cost, it 
affords only 1,826 contracts or 5.2 percent of accessions, still less 
than 0.70 college fund programs per recruiter. Due to these constrained 
resources, the MCCF is a tightly controlled program and its 
effectiveness is limited by funding levels. If funds became available, 
an additional $5.9 million would almost double the number of high 
quality recruits, providing for 2,448 enlistments and promoting a 
greater quality spread among all occupational fields.
    Our EB program is funded at $1,000, $2,000 and $3,000 bonus levels. 
The fiscal year 1998 and fiscal year 1999 funding for EB is only $5.1 
million. General enlistment bonuses of $1,000 allow recruiters to 
tailor an enlistment package for an applicant if they are a ``hard 
sell.'' These are few in number, and are not always used, but must 
remain an option for recruiters. February through May (Spring) bonuses 
of $2,000 are essential to making mission during the most difficult 
recruiting trimester. The Spring bonus allows recruiters to sell 
applicants on a ship date to help meet shipping goals, which in-turn 
assists the Marine Corps unit cohesion program and maintains an even 
flow of recruits to follow-on schools for training. Specific 
occupational field bonuses of $2,000 and $3,000 are offered in high 
tech, hard to fill occupational fields like Signals Intelligence, 
Aviation Operations, and Electronics Repair. If funds became available, 
an additional $3.0 million would provide 1,000 enlistment bonuses of 
$3,000 each and would help nullify shortfalls in classification of high 
tech skills and possibly negate the need for SRBs in the future.
    Other enlistment incentives include the Quality Enlistment Program. 
Under this program, recruits meeting certain education or aptitude 
requirements can qualify for guaranteed ``high tech'' occupational 
assignments and/or guaranteed assignment to preferred geographical 
location. Additionally, early promotion to the rank of Private First 
Class (E-2) can be awarded to applicants with exceptional backgrounds, 
such as college education and Junior ROTC experience.
    Marine Corps Recruiting Command's mission attainment has steadily 
improved over the last 33 months through the hard work, determination, 
and personal sacrifice of our recruiters to meet accession 
requirements. MCCF and Enlistment Bonuses have contributed to improved 
attainment of high tech occupational field quotas. Marine Corps bonus 
programs and the MCCF are lean by comparison to the other services; it 
is essential that relative `parity' be maintained among the services in 
these programs to ensure that the playing field remains reasonably 
level and comparative advantages are not created in bonuses or college 
funds. To date, Marine Corps recruiters have successfully met all 
accession quality and quantity requirements for the past 33 consecutive 
months.
    Air Force Answer. The Air Force currently offers a bonus for 
individuals enlisting into Combat Controllers, Pararescue, Explosive 
Ordinance Disposal, and Crypto-Linguist (Germanic, Romance, Far East, 
Mid-East, and Slavic) career fields. The average bonus received is 
$4,000. Although we continue to meet our Crypto-Linguist, Explosive 
Ordinance and Pararescue (PJ) recruitment targets, the Combat 
Controller (CCT) career field still represents a challenge for our 
recruiters. In fiscal year 1995 and fiscal year 1996, we achieved 78 
percent of our CCT goal and improved to 99 percent in fiscal year 1997. 
We've implemented a number of programs to enhance both CCT and PJ 
recruiting including specialized recruiting brochures, posters and 
videos. We have established specific locations and procedures for 
administering the physical aptitude and stamina test required for 
classification in the PJ/CCT career field. Specialized recruiting teams 
were created and PJ/CCT information has been included on the Air Force 
Recruiting Service's World Wide Web page. Finally, we provide 
specialized PJ/CCT recruiting training for our new recruiters.
    We currently do not offer the College Fund Program to new recruits 
but offer the Montgomery GI Bill. Everyone enlisting in the Air Force 
is enrolled in the program unless they make a conscious decision to 
dis-enroll shortly after they enter active duty. Members can use MGIB 
benefits after 36 months of continuous active duty. They are eligible 
to receive up to $439.00 a month for a 36 month period while enrolled 
in a post-secondary program. With a 96 percent participation rate, it's 
proven to be an effective recruiting tool. Another important recruiting 
incentive is the Community College of the Air Force. This program is 
unique to the Air Force and enables airmen to earn an associate degree 
during their first enlistment.

                            Retention Issues

    Question. Career uncertainties, longer periods away from home, pay 
and benefit concerns, quality of life issues, and slower promotions are 
key factors affecting decisions of individuals to reenlist in the 
military. Approximately 51 percent of enlisted personnel have less than 
6 years of service, 45 percent have 6 to 19 years of service, and 4 
percent have more than 20 years. More than half of the enlisted force, 
53 percent, is in pay grades E1 through E4. What is your service doing 
to address and maintain a viable retention program?
    Army Answer. The Army retention program is a commander's program. 
Commanders and Army Career Counselors are required by policy to 
interview soldiers on a regular basis to insure they are properly 
advised as to eligibility criteria, retraining opportunities, benefits 
programs, and other factors impacting on an Army career. Additionally, 
unit reenlistment training is mandated for all soldiers at least once 
annually. Soldiers also desire to be challenged and to pursue civilian 
education opportunities. Commanders throughout the Army tie education 
incentives into local reenlistment programs. The Army offers choice of 
duty station, either in the continental United States or overseas, and 
retraining options, consistent with available vacancies in the 
soldier's specialty. The Army has also shifted an additional $10,00,000 
into the Selective Reenlistment Bonus budget at the start of this 
fiscal year to influence reenlistments in shortage and critical 
specialties and closely monitors promotions to assure soldiers are 
afforded reasonable opportunities to progress. The bottom line is that 
the Army is doing everything possible to keep our force of skilled, 
well trained, and well-led soldiers who are capable of adapting to the 
complex, dangerous, and ever-changing situations that our soldiers face 
today. But this may not be enough. Our young noncommissioned officers 
and leaders are now beginning to ask if it is worth it to stay in the 
military for a 20-year career. The two major concerns that lead to this 
is the ever-growing pay gap between military and civilian sectors and 
the post-1986 retirement system.
    Navy Answer. Navy has undertaken many initiatives to improve 
retention. We know that the most effective retention tools include 
increasing retention bonuses, improving advancement opportunity, 
maintaining PERSTEMPO/OPTEMPO within established goals, particularly 
between deployments, examining compensation effectiveness, and 
continuing our focus on quality of life improvements. We have already 
instituted a number of initiatives which include turning off our early 
out and first term conversion programs; continuing the use of the 
Temporary Early Retirement Authorization (TERA) to reduce overages 
which are stagnating Navy-wide advancement opportunity; and instituting 
a 3-prong effort to strengthen the effectiveness of our Selective 
Reenlistment Bonus program. SRB improvements include: (1) gradually 
increasing the percentage of reenlistees receiving SRB, commensurate 
with pre-drawdown retention requirements; (2) increasing the Navy's 
maximum award levels to the authorized maximum of $45,000; and (3) 
seeking your support to lift the 10 percent cap on the number of 
Sailors to whom we can pay the maximum bonus.
    Marine Corps Answer. We maintain a viable retention program through 
the use of our Enlisted Career Force Controls (ECFC) program. This 
program is designed to actively shape the inventory of Marines by grade 
and MOS. A fundamental element of the ECFC is our First Term Alignment 
Plan (FTAP), whereby we set the number of first term reenlistments 
needed to meet our career force needs. We have met our FTAP goals for 
each of the last four years, and anticipate easily achieving the goal 
this year.
    The Selective Reenlistment Bonus Program (SRBP) assists in 
retaining the required number of first term reenlistments to meet the 
FTAP goal. Without the aid of the SRBP we would not be able to retain 
the requisite number of first term Marines to fulfill our career force 
requirements. Overall, the SRBP and the FTAP work hand in hand to meet 
our retention requirements.
    Air Force Answer. The Air Force is addressing retention issues by 
reducing tempo, improving care for families of deployed personnel, 
emphasizing Quality of Life programs and getting the facts out to our 
members. We're listening to our members--tempo, along with compensation 
and benefits, are cited by members as the most pressing retention 
issues.
    To reduce tempo, we have reduced time in JCS exercises by 15 
percent, initiated post-deployment stand downs and reduced aircraft 
rotations in Air Combat Command from 90 to 45 days. We also plan to 
reduce Operational Readiness Inspections (ORIs) by 10 percent in fiscal 
year 1998 and by 30 percent in fiscal year 1999 through inspection 
credit during real-world deployments. Quality Air Force Assessments 
were also terminated in fiscal year 1998.
    Recently, Air Force leadership revalidated our seven Quality of 
Life priorities to help our troops--pursue fair and competitive 
compensation and benefits; balance the impact of high tempo; provide 
access to quality health care; provide access to safe, adequate and 
affordable housing; preserve a stable retirement system and benefits; 
enhance community support; and expand educational opportunities.
    The Chief of Staff instituted a NOTAM (Notice to Airmen) program to 
get the word to the field on key issues. ``People First'' articles in 
each base paper also continue to spread the word on personnel programs.
    There is no magic cure for retention. The combination of many 
programs are what will influence our people to stay.
    Question. What incentives are needed to retain high quality 
personnel in each service?
    Army Answer. Retaining quality soldiers requires a competitive 
benefits and entitlement package, coupled with job satisfaction and a 
reasonable quality of life. Incentives vary with the individual soldier 
and often with the soldier's occupational specialty. Adequate Selective 
Reenlistment Bonus budgets are essential to induce soldiers in arduous 
or highly technical specialties to remain in the Army. Spousal 
satisfaction is a major factor among married soldiers. Adequate 
housing, medical care and post facilities, coupled with a competitive 
pay and benefits and retirement package, are the foundations upon which 
the retention program is based. The only incentives other than monetary 
are those geared toward soldiers' desires, such as a continental United 
States and overseas stations of choice, training of choice, and local 
education incentives. All these programs are subject to constraints of 
mission, occupational speciality, and budget.
    Navy Answer. The strong civilian economy and historic low 
unemployment have created a highly competitive civilian job market. 
These conditions, coupled with an increasing gap in pay and overall 
compensation, help push Sailors toward civilian jobs. We support 
soundly based Navy-wide compensation initiatives, as well as lifting 
the cap on the number of high tech Sailors to whom we can offer top 
Selective Reenlistment Bonuses. Additionally, as navy transitions to a 
steady state force, force shaping tools will still be necessary. 
Extending authorization for the temporary early retirement (TERA) 
program would be highly beneficial, enabling navy to reduce specific 
rating overages and improve Navy-wide advancement opportunity. Low 
advancement opportunity continues to be the number one dissatisfier on 
Navy exit surveys.
    Marine Corps Answer. Currently our career force continuation rates 
meet or exceed our planned fiscal year 1998 estimates. However, with 
the current economic growth and low unemployment rates it is becoming 
exceedingly difficult to compete with the civilian sector.
    One incentive we utilize to the greatest extent possible is the 
Selective Reenlistment Bonus Program (SRBP). Generally, we have 
difficulty retaining our highly technical Military Occupational 
Specialties (MOSs). Offering cash incentives (SRBP) to these MOSs 
assists us in retaining enough Marines to maintain our full combat 
capability.
    Non-monetary incentives are also an important factor in retaining 
quality Marines. Challenging work, real responsibility, and a sense of 
appreciation for their sacrifices are all factors in the retention 
equation.
    Air Force Answer. The Air Force currently utilizes two monetary 
incentives to retain high quality personnel, the Selective Reenlistment 
Bonus (SRB) and Special Duty Assignment Pay (SDAP) programs.
    The SRB program provides monetary incentives encouraging 
reenlistment in certain skills to sustain the career force objectives. 
This program also encourages first-term airmen to retrain into our 
shortage skills.
    The SDAP program provides monetary incentives for those assigned to 
extremely difficult and demanding duties with an unusual degree of 
responsibility (e.g., Combat Controllers, Pararescue, Recruiters, and 
Military Training Instructors).
    These two vital programs encourage high quality personnel to remain 
or volunteer to serve in those specialities.
    The Air Force is participating in an OSD-led Aviation Compensation 
Review and supports a career pay for enlisted aircrew members. The 
fundamental idea behind the Career Enlisted Flight Incentive Pay 
(CEFIP) is to increase compensation for career enlisted aircrew members 
to attract and retain career aviation enlisted personnel.
    Question. What percentage of first and second termers eligible for 
reenlistment does your service try to retain?
    Army Answer. Retention in the Army is not based on a preset 
percentage, but is determined by mandated endstrength, attrition rates, 
and the Recruiting Command's new accessions. The historical (pre-
drawdown) initial term retention rate of 42 percent of soldiers 
reaching their separation date is the generally accepted gauge of 
success. For mid-career soldiers (those who have reenlisted at least 
once, with less than ten years active service), the historic rate used 
is 70 percent. The actual percentage of each category that must be 
retained may actually fluctuate based on factors mentioned above. Since 
fiscal year 1994, the Army has had to retain approximately 48 percent 
of initial termers and 74 percent of mid-careerists to maintain end 
strength.
    Navy Answer. Navy does not have specific reenlistment goals. We 
have long term, steady state goals for 1st, 2nd and 3rd term retention 
of 38 percent, 54 percent and 62 percent. They are not goals for fiscal 
year 1998 or fiscal year 1999 and may not even be achievable by the 
year 2000, depending on uncontrollable factors such as civilian pay and 
unemployment rates.
    Marine Corps Answer. Our first term reenlistments are based on our 
career force continuation rates and career force (E5-E8) structure. The 
Marine Corps ideal force structure is based on a 32 percent enlisted 
career force structure (four or more years of service) and a top 6 
grade structure of 52.2 percent. As such, we need to retain roughly 
4.600 first term Marines annually. Approximately 21-24 thousand first 
term Marines are eligible for reenlistment; therefore, our annual first 
term reenlistment goal is between 19 and 22 percent.
    Since our first term reenlistments are based on career force 
continuation rates we have no second term reenlistment goal. Career 
force Marines may be granted reenlistment authority as long as they 
continue to meet our high reenlistment standards and service limit 
criteria.
    Air Force Answer. Our overall reenlistment goal for first term 
airmen who are reenlistment eligible is 55 percent and 75 percent for 
second term airmen.
    Question. Are the percentages for reenlistment declining? If so, 
explain how it has changed.
    Army Answer. Prior to fiscal year 1992 (fiscal years 1984-1991), 
the Army's initial term average retention rate was 42 percent. The mid-
career average retention rate was 70 percent.
    In fiscal year 1992, the rates fell to 30 percent and 62.5 percent, 
respectively, which was expected since various drawdown programs 
purposely reduced retention. Rates rose in fiscal year 1993, again as 
expected, since soldiers who did not voluntarily participate in early 
out programs were inclined to reenlist. The fiscal year 1993 rates rose 
to 46.1 percent and 75.6 percent, respectively. Initial term rates have 
remained steady since then, steadily increasing to the current 54 
percent.
    Mid-career rates have remained at or above the pre-drawdown 70 
percent level since fiscal year 1993, but there are some concerns. 
After a high rate of 75.6 in fiscal year 1993, the rate declined to 
73.8 percent in fiscal year 1994 and 72.8 percent in fiscal year 1995.
    In fiscal year 1996, the rate fell to the pre-drawdown level of 70 
percent. Bonus reductions and slow promotions, caused by Military 
Personnel Account shortfalls were major factors in the rate decline. 
Bonuses were increased in fiscal year 1997 and fiscal year 1998 and 
promotions have also been on track since fiscal year 1997. We also 
permitted soldiers in grades E4 to remain on active duty an additional 
two years (10 years rather than 8 years). All these factors resulted in 
higher mid-career retention in fiscal year 1997 (75 percent) and fiscal 
year 1998 through the first quarter (79 percent). The Army believes 
rates will level off. Volatile endstrength and outside factors are 
always a concern, but the recent higher rates have been encouraging. 
However, the caution light is still flashing and we must continue to 
watch and assess. The current pay package, coupled with the retirement 
system of post-1986, is beginning to cause noncommissioned officers to 
question if it is really worth it to stay in for a 20-year or more 
career.
    Navy Answer. Reenlistment rates for first, second and third termers 
all dropped from fiscal year 1995 thru fiscal year 1997. First quarter 
fiscal year 1998 reenlistment figures are on an upward trend for first 
and second termers, while third term reenlistment rates were impacted 
by the front loading of almost one thousand fiscal year 1998 TERA 
retirements:

                              [In percent]
------------------------------------------------------------------------
                                     1st term     2nd term     3rd term
------------------------------------------------------------------------
Fiscal year 1995.................         57.7         60.3         92.3
Fiscal year 1996.................         54.0         58.7         84.9
Fiscal year 1997.................         50.4         57.3         82.9
Fiscal year 1998 thru December...         59.2         60.6         81.2
------------------------------------------------------------------------

    Marine Corps Answer. Our first term reenlistments are based on our 
career force continuation rates and career force (E5-E8) structure. 
Consequently, the Marine Corps only reenlistment goal is for first term 
Marines. With a relatively stable career force structure (52.2 percent 
in the top 6 enlisted ranks) our first term reenlistment goal remains 
relatively constant between 19 and 22 percent of our first term EAS 
population. Over the past four years we have achieved our first term 
reenlistment goal and our current statistics indicate that we will 
attain our fiscal year 1998 goal.
    Air Force Answer. Yes. The first-term reenlistment rate is down 5 
percent over the past 5 years (fiscal year 1993: 61 percent to fiscal 
year 1997: 56 percent), but still above the goal of 55 percent. The 
first-term reenlistment rate for the first two quarters of fiscal year 
1998 is steady at 56 percent.
    The second-term reenlistment rate has declined 11 percent over the 
past 5 years (fiscal year 1993: 82 percent to fiscal year 1997: 71 
percent), dropping below the goal of 75 percent in fiscal year 1997. 
The second-term reenlistment rate for the first two quarters of fiscal 
year 1998 is 70 percent.
    The career airmen reenlistment rate has declined 2 percent over the 
last five years (fiscal year 1993: 97 percent to fiscal year 1997: 95 
percent) and has held steady at the goal of 95 percent into the first 
half of fiscal year 1998.
    We're closely monitoring second-term reenlistment--the caution 
light is on, but we're not hitting the panic button. The Air Force has 
more than doubled the number of skills eligible for Selective 
Reenlistment Bonuses (fiscal year 1995--41 skills using $24 million, 
fiscal year 1998--88 skills using $33 million) to help encourage 
members to reenlist. We are also aggressively working various Quality 
of Life programs. The combination of all these programs are designed to 
help alleviate the reenlistment problem.
    Question. At what percentage do you need to maintain your second 
term reenlistment rates in order to avoid gaps in your mid-level 
experienced people?
    Army Answer. The actual retention rate needed to sustain the mid-
level force fluctuates somewhat. Based on recent experience, however, a 
retention rate of 74 to 75 percent appears to be the rate at which 
desired manning levels can be achieved. Currently, the Army is 
attaining desired retention rates, but bonus and incentive programs 
must be maintained at or above current levels to sustain those rates. 
Additionally, to maintain the right force structure, we must have 
soldiers in the right Military Occupational Specialties and skill 
levels reenlist.
    Navy Answer. Navy does not manage to specific reenlistment rates. 
Second term retention is about four percentage points less than 
desirable in the steady state, however, Navy is still carrying a 
surplus of Sailors with nine years or more of service. We will continue 
our force shaping initiatives, including judicious use of the Selective 
Reenlistment Bonus, to target specific skill shortages.
    Marine Corps Answer. The Marine Corps maintains a second term 
reenlistment rate of approximately 60 percent. If there are any 
fluctuations in second term reenlistments, the Enlisted Career Force 
Control manager adjusts the first term reenlistments as necessary. As 
such, the Marine Corps' first term reenlistments are based on our 
career force continuation rates and career force (E5-E8) structure. 
Currently our career force continuation rates are relatively high and 
our career force top 6 structure remains constant at 52.2 percent. 
Consequently, the Marine Corps focuses its reenlistment efforts on the 
first term force.
    First term reenlistments are governed by the First Term alignment 
Plan (FTAP). The annual FTAP determines the number of first term 
Marines (by MOS) required to reenlist to support our career force 
needs. Over the past two fiscal years the FTAP reenlistment requirement 
has remained steady at approximately 4,600 Marines.
    The Selective Reenlistment Bonus Program (SRBP) assists in 
retaining the required number of first term reenlistments to meet the 
FTAP goal. Without the aid of the SRBP we would not be able to reenlist 
the requisite number of first term Marines to fulfill our career force 
requirements (FTAP). Overall, the SRBP and the FTAP work hand in hand 
to meet our retention requirements.
    Air Force Answer. From an aggregate perspective, our goal is to 
retain 75 percent of our reenlistment eligible second term members.
    Question. What impacts do high turnover rates have on unit cohesion 
and readiness?
    Army Answer. High turnover rates impact on the ability to keep 
combat ready teams and crews together for an extended period of time. 
However, Army planning takes the historical turnover rate into account.
    Currently, the Army is forced to pay special attention to the 
recent increased rates of unit deployment tempo (DEPTEMPO) which have 
resulted from an increased number of contingency operations, such as 
Bosnia and Kuwait. Careful management of both the units selected for 
training and operational deployments, and the programs that assign 
soldiers to/from those deploying units, has minimized the adverse 
impact of DEPTEMPO and turnover rates on either unit readiness or 
quality of life.
    Navy Answer. Clearly, a high turnover rate can be disadvantageous, 
however, its impact is dependent upon the size of the unit. Individual 
units work very closely with the Navy's distribution system, as well as 
their Fleet type commanders, to minimize the impact of personnel 
turnover on unit readiness.
    Marine Corps Answer. The Marine Corps is, by nature, a young force. 
Over 69 percent of our enlisted Marines are serving in their first 
term, resulting in a high turnover rate which is detrimental to unit 
cohesion. To counter this, we have implemented a ``Unit Cohesion 
Program'' to foster unit integrity, improve training and enhance 
readiness. The Unit Cohesion Program seeks to optimize the initial 
enlistments of our young, first term force by stabilizing the Marines 
in a unit for the duration of their initial enlistment. We have found 
that the productive life-cycle of an infantry Marine (after boot camp 
and follow-on MOS training) is about 42 months. To foster cohesion 
during this life-cycle, we are forming squads of Marines in boot camp 
and keeping them together through MOS training and subsequent 
assignment to an infantry battalion where they are likely to 
participate in two, six-month deployments.
    The majority of Marines enlist for a four year contract and most of 
these Marines do not seek reenlistment. Therefore, it is unlikely that 
most young people would be willing to commit to a longer initial 
contract of five or six years.
    Air Force Answer. High turnover rates increase turbulence and the 
training burden in an operational unit. While this has a minor impact 
on unit cohesion and readiness, it has a large impact on the overall 
workload in a unit. Our people must pick up the slack for their fellow 
workers who are in-processing, out-processing, in-transit, or in 
training. In a time of already high TEMPO this additional workload is 
difficult to manage.

                             Deployment Pay

    Question. Last year, the Authorization Conference included language 
in their bill (Section 605) that created a new ``deployment pay'' for 
service members. This new pay is intended to protect a member's loss of 
compensation when they are on temporary duty (TDY), when they 
participate in training exercises, or while under field conditions at 
their permanent duty station. Are you aware of this new ``deployment 
pay'', and if so, would you give us your opinion on whether or not this 
additional compensation is needed or necessary?
    Army Answer. The Army is aware of the language found in Section 605 
and its mandate that the total amount of a service member's elements of 
compensation shall not be less when a member is temporarily assigned 
away from their permanent duty station or in duty under field 
conditions at their permanent station. Although this language did not 
create a new pay, it does require the services to ensure a member's pay 
is not lowered due to the temporary assignment. This mandate was 
difficult for the services to comply with due to conflicting language 
found in Section 602. The Department of Defense, therefore, redefined 
field duty, and the Army is preparing implementing guidance. 
Coincidentally, the Department of Defense's language for both Basic 
Allowance for Subsistence Reform and Basic Allowance for Housing 
Reform, ensured that soldiers would no longer be treated inequitably 
due to deployment. These inequities would have ceased at the end state 
of BAS Reform. Thus Section 605 placed an unforeseen cost and 
administrative burden on the Services, and the Army believes this 
Section of law was not needed.
    Navy Answer. Section 605 mandates that the total daily equivalent 
amount of a member's elements of compensation shall not drop when a 
member is deployed TDY away from their permanent duty station (PDS) or 
in duty under field conditions at their PDS. A member's compensation is 
defined as being made up of Basic Pay, Basic Allowance for Subsistence 
(BAS) and Basic Allowance for Housing (BAH). Congressional intent with 
regard to Section 605 was to provide service members with continuous 
entitlement to both BAS and BAH.
    This compensation initiative was necessary to prevent some enlisted 
Sailors (BAS--E-9 and below, BAH--E-4 and below) from taking a ``pay 
cut'' while deployed. In the past, these Sailors lost their BAS and 
BAH. This practice specifically affected enlisted Sailors in support of 
deployed Air Wings, Helo Dets, Seabees, SEALS, and the Fleet Marine 
Force.
    Marine Corps Answer. Section 605 of the 1998 National Defense 
Authorization Act provides language that ensures the total pay and 
allowances of a service member will not be reduced when the service 
member is assigned to field duty at home station or to temporary duty 
away from home station. The Marine Corps strongly supports section 605 
and believes it is a necessary, positive step in providing parity among 
the Services in deployment benefits, and in maintaining the quality of 
life of our deployed Marines and their families. This legislation will 
prevent Marines from losing their Basic Allowance for Subsistence (BAS) 
when deployed. To support this legislation the Marine Corps just 
published an administrative message (ALMAR 120/98) protecting Marine's 
BAS when deployed, thereby protecting total compensation (i.e., Marines 
will be charged for meals available at a discounted rate when 
deployed).
    Air Force Answer. Section 605 does not authorize deployment pay. 
Rather, it mandates that the total daily equivalent amount of a 
member's elements of compensation shall not drop when a member is 
deployed TDY away from their permanent duty station (PDS) or in duty 
under field conditions at their PDS. A member's compensation is defined 
as being made up of Basic Pay, Basic Allowance for Subsistence (BAS) 
and Basic Allowance for Housing (BAH). Section 605 also protects 
``other pay and allowances under this title'' to which a member may be 
entitled. The net effect of Section 605 was to ensure members maintain 
their BAS when they deploy. No other additional compensation is 
provided as a result of Section 605.
    Question. The Committee understands this is to reimburse a service 
member for loss of his Basic Allowance for Subsistence (BAS) during 
training conducted under field conditions. Is the reduction in BAS 
payments during these training periods causing a financial hardship on 
the service member? Explain.
    Army Answer. The soldier who loses his BAS has greater than the 
cost of food deducted from his pay. This allowance in many cases is 22 
percent of the soldier's salary. Yes, our enlisted soldiers believe 
that loss of the allowance creates a hardship. Although the purpose and 
intent is to provide an allowance for the cost of meals for our 
soldiers, it becomes much more than that--it provides food for the 
entire family. Although members have been losing their BAS under these 
circumstances, guidance is forthcoming that will ensure that all 
members retain their BAS and be charged the discounted rate for meals 
provided. This will ensure that members receiving full BAS will keep 
the pay portion of their BAS. This total comes to about nine dollars a 
month.
    Navy Answer. The purpose of Section 605 was to avoid reductions in 
service members' pay when they are TDY away from their Permanent Duty 
Station (PDS) or in duty under field conditions at their PDS. However, 
Section 602 prohibited payment of BAS when members are in a sea or 
field duty status, but allowed the Secretary of Defense to redefine 
these statutes. The Secretary of Defense recently redefined the 
definition of sea and field duty for the purpose of BAS. The new 
definition allows members to maintain their current BAS payment.
    However, if a member is entitled to full BAS at their PDS and 
perform temporary duty in a sea or field duty status, they are required 
to pay for meals consumed. Charges are based on the basic Government 
meal rate and will allow members to retain a portion of their current 
BAS payment, thus satisfying the dual compensation statutes. Military 
members consider the BAS payment an integral part of their pay, and 
reduction or elimination of the allowance affects their ability to meet 
monthly financial commitments.
    Marine Corps Answer. Section 605 has resulted in the decision to 
allow all Marines to retain BAS while deployed, although they will then 
be charged the discounted rate for meals available. What this means for 
individual Marines is that they retain their $7.43 per day BAS payment, 
but then get charged $6.00 per day for meals that are provided when 
deployed. So the Marine nets $1.43 per day, or about $43 per month. 
This is important because BAS is an integral part of the family budget. 
Previously, when BAS was forfeited entirely during deployment, the 
family budget suffered even though the Marine was being provided meals. 
This new approach will go a long way toward dispelling the notion that 
Marines ``lose pay'' when they deploy.
    Air Force Answer. The stated purpose of Section 605 was to avoid 
reductions in service members pay when they deploy TDY away from their 
permanent duty station (PDS) or in duty under field conditions at their 
PDS. However, Section 602 prohibited payment of BAS when members are in 
field duty or sea duty, but allowed the Secretary of Defense to 
redefine these duties. Secretary of Defense recently redefined field 
duty and sea duty for the purpose of Basic Allowance for Subsistence 
(BAS). The new definition allows members to maintain their current BAS 
payment. However, if a member is entitled to full BAS at home station 
and performs temporary duty in a field duty or sea duty status, they 
are required to pay for meals consumed. Military members consider the 
BAS payment an integral part of their pay, and reduction or elimination 
of the allowance effects their ability to meet monthly financial 
commitments. Maintaining their BAS during deployments helps mitigate 
any negative financial impacts associated with the deployments. 
Allowing members to keep their BAS provides stability in financial 
planning and eliminates any perception that pay is reduced when a 
member deploys.
    Question. The Committee understands that the Department is studying 
how this pay will be implemented and when it will go into effect. When 
will those issues be decided by OSD? Please provide for the record the 
details of who is to receive such pay and the estimated cost of the 
program.
    Army Answer. Section 605 did not create a new allowance nor require 
a report. However, Section 619 revised Section 305 of Title 37 and 
created a special pay for duty at Designated Hardship Duty Locations, 
and directed the Secretary of Defense to prescribe implementing 
regulations. The Department is currently studying the implementation 
procedures for Hardship Duty Location Pay. All services are represented 
in the study and temporary duty and permanent duty quality of life 
issues are being analyzed. The Department believes the study will be 
complete and have guidance distributed by January 1999.
    Navy Answer. Section 605 did not authorize a ``deployment pay'' and 
as such no study is being conducted. As previously stated, this 
compensation initiative was necessary to prevent some enlisted Sailors 
(BAS--E-9 and below, BAH--E-4 and below) from taking a ``pay cut'' 
while deployed. In the past, these Sailors lost their BAS and BAH. This 
practice specifically affected enlisted Sailors in support of deployed 
Air Wings, Helo Detachments, Seabees, SEALS, and the Fleet Marine 
Force.
    Preliminary estimates show that approximately 34,000 Sailors will 
benefit from this new initiative when deployed at an approximate cost 
of $9.97 million due to increased payments of BAS and BAH.
    Marine Corps Answer. Section 605 of the National Defense 
Authorization Act 1998 requires that service members' total 
compensation not be reduced during their deployment. Section 605 did 
not create a new deployment allowance. In the past when Marines 
deployed, they lost their Basic Allowance for Subsistence (BAS). On 
March 11, 1998 OSD issued guidance to the services requiring them to 
discontinue the practice of checking service members' BAS when they 
deploy away from their primary duty station. As such, effective 
immediately, Marines will no longer lose their BAS when deployed 
thereby protecting total compensation (Marines will be charged for 
meals available at a discount rated when deployed). The cost to the 
Marine Corps will be approximately $6 million for the remainder of 
fiscal year 1998 and $8 million for fiscal year 1999. We feel that 
section 605 is a necessary, positive step in providing parity among the 
Services in deployment benefits, and in maintaining the quality of life 
of our deployed Marines and their families.
    Air Force Answer. Section 605 did not authorize a deployment pay, 
but it did introduce the requirement that a member's pay does not drop 
as a result of a TDY deployment. This initiative was part of the fiscal 
year 1998 National Defense Authorization Act and is in effect today. 
The stated intent of Section 605 was to ensure members retained their 
Basic Allowances for Housing (BAH) and Basic Allowance for Subsistence 
(BAS) when they deployed.
    This is a positive move for deployed people. In the past, 
individuals deployed in field conditions lost their entire BAS 
entitlement and meals were provided at no cost. As a result of Section 
605, the member retains their full BAS entitlement. Since current law 
prohibits receiving a subsistence entitlement and free meals, a portion 
of the BAS is withheld to pay for meals provided in the field. The 
remainder of the BAS is retained by the individual--a positive step for 
our deployed personnel. There should be no additional costs to the Air 
Force associated with implementation of Section 605.
    Question. Do you have an estimate now of how much it will cost the 
Services to implement this special pay?
    Army Answer. We do not have an estimate of the cost to implement 
this program at this time.
    Navy Answer. No special pay was authorized under Section 605. 
However, as stated above, preliminary estimates show that 34,000 
Sailors will benefit from this new initiative when deployed at an 
approximate cost of $9.97 million due to increased payments of BAS and 
BAH.
    Marine Corps Answer. Section 605 of the 1998 National Defense 
Authorization Act did not create a new deployment pay. Instead, it 
provides language that ensures that total pay and allowances of a 
service member will not be reduced when the service member is deployed. 
In accordance with OSD guidance of 11 March 1998, the Marine Corps 
published an administrative message (ALMAR 120) protecting Marines' BAS 
while they deploy. As a result, Marines total compensation will now be 
protected while on deployment. It is estimated section 605 of the 1998 
NDAA will cost the Marine Corps approximately $6 million for fiscal 
year 1998 and $8 million in fiscal year 1999.
    Air Force Answer. No special pay was authorized under Section 605. 
When deployed, most Air Force members are in a TDY status and are 
receiving Basic Allowance for Subsistence (BAS). We expect no increases 
to the BAS account resulting from this change.

                            Personnel Tempo

    Question. The increase of unscheduled deployments in the past few 
years for domestic disasters, contingency operations, or Military 
Operations Other Than War (MOOTW), clearly stresses military personnel 
and their families. Gentleman, what is the average time your soldiers/
sailors are on temporary duty, or away from home during the year for 
training, exercises or deployments?
    Army Answer. For normal training exercises, the deployment tempo 
(DEPTEMPO) of the average Army Active Component (AC) unit is 4.5 days 
per month. As would be expected, specific units and Military 
Occupational Specialities (MOSs) experience dramatically greater 
deployment rates. Infantry, Armor, and Special Forces units report the 
highest DEPTEMPO rates, all exceeding six days per month or 70 days per 
year. United States Army, Europe, infantry units have approached 90-day 
annual DEPTEMPO rates. Some units accrue DEPTEMPO rates in excess of 
200 days per year. An example of this type situation would be units 
deploying to Bosnia, Kuwait, or the Sinai for 180-day deployments, 
which necessitates conducting pre- and post-operational mission 
training deployments, often at home stations. This reflects unit 
deployments. When looked at in terms of the individual soldier, the 
average time deployed for those soldiers on temporary duty or temporary 
change of station orders was 125 days in fiscal year 1997.
    Navy Answer. The average Navy unit spends approximately 41 percent 
of the time away from home. This number is within the Navy's goal of 
spending less than 50 percent away over a five-year period.
    Marine Corps Answer. By nature, Marines are deployers, and are 
readily able to respond when the nation calls. To monitor this, the 
Marine Corps measures and tracks unit deployment tempo (DEPTEMPO) in 
relation to the scheduled cycle. DEPTEMPO is defined by the Marine 
Corps as the time accumulated by a unit in periods 10 days or greater 
away from their home station during a given period.
    Marine Force Commanders monitor the DEPTEMPO of their forces, 
taking appropriate action to adjust or change schedules when necessary. 
Schedules are reviewed over the course of a three-year period; the 
current year and two ahead. This enables a balance in the projected 
schedule with DEPTEMPO evenly distributed throughout the operating 
forces. Marine Corps' schedules are geared to ensure the continuing 
provision of forward deployed forces to support CINC requirements, 
maintaining a rotational training and deployment cycle.
    Marine Corps (and Navy) deployments encompass 6-month periods with 
a minimum turnaround ratio of 2 to 1 between them, although a 3 to 1 
ratio is the preferred goal. Individual Marine time away from home is 
dependent upon Military Occupational Specialty (MOS), location and size 
of MOS populations.
    Air Force Answer. The Air Force desired maximum tempo rate is 120 
days TDY per individual, per 12 months. In fiscal year 1997 Air Force 
people averaged 31 days TDY away from home while aircrew members 
averaged 50 days TDY away from home. The average number of Air Force 
members deployed at any given time in fiscal year 1997 was 14,600.
    Question. Explain how your service manages personnel tempo 
(PERSTEMPO) so it does not have an impact on individual unit readiness 
and training of your people? What systems are in place to track 
PERSTEMPO information?
    Army Answer. The Army's PERSTEMPO measurement is a combination of 
skill tempo (SKILLTEMPO--individual training) and deployment tempo 
(DEPTEMP--unit deployments). SKILLTEMPO, reported in the Standard 
Installation/Division Personnel System (SIDPERS), is the percent of 
time spent on ``out of station operational deployments'' by individual, 
Military Occupational Specialty, and skill level. DEPTEMPO, reported on 
the Unit Status Report, records the average number of days within a 
one-month period that unit personnel have spent ``away from their 
bunks'' on training, exercises, or operational deployments.
    SKILLTEMPO is primarily used to shape the force, i.e. insure that 
the Army possesses the correct number of soldiers by rank and MOS to 
fully man its units while also supporting both force educational 
requirements and the institutional Army, such as the Training and 
Doctrine Command and the Recruiting Command. SKILLTEMPO includes those 
individual soldier deployments requiring SIDPERS entries. It is best at 
capturing the amount of time a particular rank or MOS is deployed for 
special duty, TDY, individual schooling, and other individual soldier 
type deployments.
    DEPTEMPO is used to preclude any unit from being subjected to too 
high a deployment rate. DEPTEMPO includes all deployments (unit, small 
element, and individual soldier), except those for professional 
development, which are captured by SKILLTEMPO.
    In fiscal year 1997, the Chief of Staff of the Army (CSA) 
established a DEPTEMPO goal (unit deployments) of no more than 120 days 
per year. All units projecting 120 days deployment or more over any 12-
month period are individually monitored by Headquarters, Department of 
the Army. Army units projecting annual deployment rates exceeding 180 
days require CSA approval to execute deployments.
    The Army continues to spread deployment requirements across the 
force, but with the recognition that some units and soldier 
specialties, by virtue of their mission and skills, will be required to 
deploy more frequently. Army policy, as of February 23, 1998, provides 
a period of stabilization for soldiers returning from an operational 
deployment away from their permanent duty station. Soldiers deployed as 
individuals or within units for a period of at least 30 days as part of 
an operational mission will, to the greatest extent feasible, be 
provided a stabilization period upon return equal to one month of 
stabilization for each month of deployment. In the case where a soldier 
is reassigned from outside the continental United States to within the 
continental United States (CONUS), the soldier retains the unused 
portion of stabilization authorized prior to the soldier's return from 
overseas and will carry it over to the gaining CONUS commander. 
Implementation and management of this policy is the responsibility of 
commanders in the field.
    Navy Answer. The Navy's PERSTEMPO program has been in effect since 
1985. This unit-level system consists of three guidelines:
           A maximum deployment of six months, portal to 
        portal.
           A minimum Turn Around Ratio (TAR) of 2.0:1 between 
        deployments.
           A minimum of 50 percent time in homeport for a unit 
        over a five-year period (three past/two projected).
    CNO personally approves PERSTEMPO exception requests, which are 
submitted only after Fleet CINCs have first exhausted all available 
options.
    Units in excess of 55 percent out of homeport over 5 years are 
placed on a CNO watchlist for close monitoring.
    Marine Corps Answer. The Marine Corps' rotational unit deployment 
schedule has been successful in keeping Personnel Tempo (PERSTEMPO) at 
manageable levels by using scheduling to ensure minimal impact on 
personnel. The PERSTEMPO of all Marines is therefore spread equally 
throughout our deploying forces. Although the Marine Corps does not 
specifically track PERSTEMPO, it tracks unit Deployment Tempo 
(DEPTEMPO), every Marine's accumulated deployed time (ADT) and overseas 
control date (OCD) are tracked within our assignment process. These 
measures enable manpower planners to establish a queuing process for 
future dependents-restricted overseas assignment tours.
    By controlling unit DEPTEMPO through effective scheduling, the 
tempo of individual Marines will also be controlled. The Marine Corps 
depends upon our local unit commanders to assign Marines to deploying 
detachments in an equitable manner in order to ensure that individuals 
are not over-deployed. The Marine Corps tracks and displays its 
DEPTEMPO data as part of the Joint Monthly Readiness Review (JMRR) 
process, which is also displayed in the Quarter Readiness Report to 
Congress (QRRC).
    Air Force Answer. The Air Force recently developed the Tempo 
Tracking System to collect tempo data on all personnel. We established 
a desired maximum tempo rate of 120 days per individual, per 12 months. 
The Tempo Tracking System is available to the Chief of Staff, Air Force 
and all commanders down to the unit/squadron level. It allows 
leadership to sort tempo data by Air Force Major Command, or unit in 
addition to specific Air Force Specialty Codes (AFSC) (officer and 
enlisted), Mission Design Serious (major weapon system) or individual 
member.
    To manage high tempo rates, the Air Force has implemented global 
sourcing of our low density/high demand assets which spreads the 
deployment burden throughout the Air Force; continued use of Reserve 
component volunteers; reduced time in JCS exercises by 15 percent; 
initiated post-deployment stand downs; reduced standard aircraft 
rotations in Air Combat Command from 90 to 45 days; reduced Operational 
Readiness Inspections by 10 percent in fiscal year 1998 and plan to 
reduce another 30 percent by fiscal year 1999; eliminated Quality Air 
Force Assessments and awarded units inspection credit for real world 
deployments.
    Question. Are there certain units or mission skills that are being 
continually stressed with either normal deployments, training, 
exercises, or for contingency operations? If so, describe which skills 
or units are being ``stretched thin.''
    Army Answer. The Department of Defense Global Military Force Policy 
(GMFP) office was established in 1996. The objective of GMFP is to 
define the maximum peacetime deployment tempo level that can be 
sustained indefinitely by low density, high demand (LDHD) assets 
without adverse impact on readiness. The Army currently has seven 
capabilities on the GMFP list: Patriot, Special Forces, Rangers, Civil 
Affairs, Psychological Operations, Special Operations Aviation, and 
Special Operations Signal.
    The Army internally monitors low density units and Military 
Operational Specialities (MOSs) for high demand. As of December 1997, 
the following units and MOSs had the highest skill tempo rate of those 
deployed. It is important to note, however, that MOSs move in and out 
of this group depending on the type of deployments being conducted. The 
units include: Military Police; Postal; Engineer (Heavy Construction); 
Medical; Water Purification; and Movement Control. The MOSs include: 
77W (Water Treatment Specialist); 37F (Psychological Operations 
Specialist); 67S (OH-58, Helicopter Repairer); 93B (Aeroscout 
Observer); 96H (Imagery Ground Station Operator); 51K (Plumber); 13R 
(Field Artillery Firefighter Radar Operator); 27K (Patriot Missile 
Repairer); 35C (Surveillance Radar Repairer); 52F (Turbine Engine 
Driven Generator Repairer); 97E (Interrogator); 45B (Small Arms/
Artillery Repairer); 51R (Interior Electrician); 67V (Observer/Scout 
Helicopter Repairer); and 62F (Crane Operator). MOS 88M (Transportation 
Specialist) and MOS 55D (Tech Escort) are on the bubble. They are 
making it right now, but any additional requirements will add them to 
the list.
    Navy Answer. Yes. Although we are generally remaining within 
personnel tempo (PERSTEMPO) requirements, our forces are being 
stretched because of limited assets to carry out an increasing number 
of missions. We no longer have the flexibility to add new contingencies 
or delay maintenance schedules without gapped presence or straining 
PERSTEMPO and OPTEMPO goals. While this is true for all forces, 
including ships and submarines, certain aircraft types and squadrons 
are currently being stretched the most. With the retirement of the Air 
Force's EF-111, the EA-6B Prowler is becoming the sole provider of the 
Joint-Suppression of Enemy Air Defenses (SEAD) mission. To accomplish 
this, the EA-6B fleet is operating at surge tempo. In 1997, eight of 
twelve active duty squadrons were involved in six-month deployments. 
Personnel have been away from their homeport of Whidbey Island, 
Washington, half of each year. Tactical Electronic Warfare Squadron 138 
has been deployed to Korea and the Persian Gulf over the past three 
Christmases. Similarly, demand for Maritime Patrol (P-3), Airborne 
Early Warning (E-2C), and Special Project Unit (RP-3, EP-3) aircraft is 
outpacing resources as they struggle to meet commitments to theater war 
plans, counter-drug operations, and intelligence-collecting missions.
    Because of manning shortfalls, certain key enlisted ratings 
(specialities) are being stretched. In order to keep deploying carrier 
battle groups and amphibious ready groups adequately manned, we often 
have to ``crossdeck'' people from one ship or aircraft squadron to 
another before deployment. The specific ratings being crossdecked 
change often but recently it has mostly been in critical technical 
ratings, such as operations specialists and fire control technicians 
CINCLANTFLT conducted a study on the impact of reduced manning on 
readiness and unit daily operations. Manning of 51 ships and aircraft 
squadrons in two battle groups/ARGs (one deployed, one in work ups, and 
one ship in overhaul) was analyzed. Representatives from CINCLANTFLT 
and the TYCOMs developed a survey to assess the impact of reduced 
manning at the ``deckplate'' level. Fifteen of the 51 units were 
surveyed. The study found that Fleet sea-manning fell from 98 percent 
in October 1994 (fiscal year 1995) to 90 percent where it remains. The 
average manning of the deployed units studied was 89 percent while the 
average for those in non-deployed units was 85 percent. The deficit 
centers in the junior pay grades. Sea duty E3-4 billets make up 55 
percent of the force, but are only 85 percent manned. The study 
concluded that working hours for our Sailors have increased both at sea 
and in port regardless of where the unit was in the deployment cycle. 
Critical manning of selected ratings (e.g., FC, DS, ET, IS, AO, STG, 
ABE, SH, MS and GENDETs) contributes to an increased workload for 
sailors and results in a re-touring of personnel in mess and 
housekeeping duties. The Intelligence Specialists (IS) is an example of 
a skill in great demand for exercises and contingency operations and in 
which Fleet sea manning is low (88 percent of billets in LANTFLT sea). 
In the case of aviation units, additional training to meet deployment 
certification requirements necessitates increased time away from home 
as squadron detachments are sent to locations such as Fallon, NV and 
Key West, FL.
    More maintenance is being conducted by sailors due to reduced 
maintenance dollars and fewer dedicated periods for IMA/Depot level 
maintenance. Interdeployment commitments have not been reduced in 
proportion to the decrease in force structure. The Navy continues to 
take steps to improve interdeployment efficiency and quality of home 
life. While efforts have been taken to improve home life between 
deployments, the overall manning shortfall in all Fleet units, deployed 
and non-deployed, is what proportionately affects the workload of 
sailors.
    Marine Corps Answer. The Marine Corps does not have any units or 
MOSs that are continually stressed from deployments, training, 
exercises or contingency operations. With that said, there are times 
that uplanned contingencies may exacerbate the stresses felt by our 
lower density, high-tempo skills. For example, our linguists, some 
communications skills and the EA-6B aircraft community would fall into 
this category. These specialized Marines are highly technical and/or 
require lengthy training pipelines, both of which make it difficult to 
sustain healthy inventory levels.
    Generally, the communication, intelligence, and some aviation MOSs 
are ``stretched thinner'' when compared to the remainder of their 
fellow Marines. The communications MOS high tempo can be explained by 
the leaps in computer technology and the Marine Corps' effort to 
exploit these new capabilities.
    Air Force Answer. Air Force manages TEMPO by systems and by skills. 
Of the 43 major combat systems evaluated, 34 were identified for 
management attention during January 1-December 31, 1997. The top five 
most-used Air Force systems were: U-2, EF-111, MH-60, Airborne Command 
and Control Center (ABCCC), and C-17. Of the 730 skills evaluated, 25 
were identified for management attention during January 1-December 31, 
1997. The top five most-used Air Force skills were: Communications 
Cable Systems, Pararescue, Ground Tactical Aircraft Control, Combat 
control, and Airborne Tactical Aircraft Landing Systems.
    Question. Personnel tempo also affects those personnel who remain 
behind at the home station when units deploy. Describe some of those 
impacts. For instance, are they working more hours per week?
    Army Answer. There is a readiness bill associated with all 
contingency operations. When we deploy an Army unit to a potentially 
hostile environment where its performance could dramatically affect 
national policy and prestige, that unit is provided all of the 
training, personnel, and equipment resources needed to maximize its 
chances of success. It is brought to the highest standard of readiness 
which time and resources allow. The bill payers are the non-deploying 
units. This readiness bill is the price we pay for accomplishing our 
Nation's policy of shaping the international security environment in 
ways favorable to U.S. interests. Individual soldier augmentation of 
contingency operations with key leaders and soldiers possessing unique 
Military Occupational Specialists (MOSs) also impacts upon non-
deploying unit readiness.
    Given the smaller force structure of today's Army, the effects of 
contingency operations upon non-deploying units can be especially 
severe. In effect, contingency operations result in personnel shortages 
within non-deploying units and, in some instances, increased work loads 
due to those units assuming the home station responsibilities of the 
deployed units. However, the Army's chain of command and 
noncommissioned officer support channel pro-actively manages the 
effects of contingency operations upon both deploying and non-deploying 
units. The objective is to maintain a trained and ready force while 
minimizing the impact of operational deployments upon units, soldiers, 
and Army families.
    Navy Answer. In addition to the personnel crossdecks, people are 
working harder to get ships and aircraft squadrons ready for 
deployment. While deployed unit readiness is good, we are keeping the 
deployed ships and aircraft ready at the expense of non-deployed 
forces. Budget and personnel shortfalls mean that people are doing more 
with less, and it is increasingly getting harder to ``ramp up'' unit 
readiness prior to deployment. The biggest problem is in aviation. 
Several related challenges--personnel and spare parts shortfalls, 
increased cannibalization rates, decreased mission capable rates (MC/
FMC)--are making people work harder and leading to job dissatisfaction 
and lowered retention.
    Marine Corps Answer. During these challenging and busy times, the 
Marine Corps continues to answer each time the nation calls. Yet high 
operational tempo has a price--higher usage of aging equipment results 
in increased maintenance, and increased man-hours spent repairing 
equipment which equates to less time and money available for training, 
and possible degradation of readiness.
    Marines performing maintenance duties frequently work twelve to 
sixteen hours per day, six to seven days per week on overlapping and 
rotating shifts, in order to sustain the ninety-two percent ground 
equipment and seventy-seven percent aviation equipment readiness we are 
currently attaining. Aviation maintenance Marines work around the clock 
to provide safe and mission capable aircraft to support their buddies 
on the ground. Our motor pools, artillery gun parks and amphibious 
vehicle ramps are busy places. They find Marines working long hours to 
maintain the high readiness on equipment that is older than most of the 
mechanics working on it. The ``maintenance tempo'' is high; but again, 
through the hard work and dedication of our Marines, we remain ready 
despite high operational tempo.
    Air Force Answer. Since 1986, the Air Force has downsized by nearly 
40 percent, while experiencing a four-fold increase in our operational 
commitments. Meanwhile, at home, our airmen are working extended duty 
days and expanded duty weeks with more intense hours to keep our CONUS 
bases running despite the void left by those who are deployed. 
According to the fiscal year 1997 Quality of Life Survey, the average 
work hours per week increased from 47 in fiscal year 1996 to 50 in 
fiscal year 1997. This is significant when you realize that current 
manpower standards are built on a 43 hour work week.
    Question. Explain the personnel policies that are in place for your 
service which minimizes redeploying an individual or a unit soon after 
returning to their home station.
    Army Answer. On February 23, 1998, the Army implemented a 
Deployment Stabilization Policy. The new policy seeks to avoid 
repetitive deployments, enabling our soldiers to enjoy a period of time 
to become reacquainted with their families and to readjust to their 
living and working environment.
    Soldiers placed on Temporary Tour of Duty/Temporary Change of 
Station (TDY/TCS) for at least 30 consecutive days, participating in 
specified operations will, to the greatest extent feasible, be provided 
a period of stabilization equal to one month of stabilization for each 
month of TDY/TCS. During the period of stabilization, soldiers cannot 
be involuntarily placed on TDY/TCS away from their home station for any 
of the specified operations. Stabilization of some critical low 
density, high demand Military Occupational Specialties will not be 
possible; therefore, the first general officer in the chain of command 
may terminate the period of stabilization.
    Stablization will not keep eligible soldiers from being reassigned 
in a Permanent Change of Station. However, unused periods of 
stabilization authorized prior to the soldier's return from overseas 
will be carried over to the gaining commander.
    We must ensure continued readiness of the force, and the care of 
our soldiers and their families. This stabilization policy helps limit 
the adverse effects of continual and repetitive deployments.
    Navy Answer. In October 1985, the Secretary of the Navy, the Chief 
of Naval Operations (CNO) and the Fleet Commanders in Chief (FLTCINC's) 
initiated a concerted effort to eliminate excessive operating tempo 
(OPTEMPO) for ships and aircraft squadrons as well as achieve long 
standing personnel tempo of operations (PERSTEMPO) limits. A PERSTEMPO 
program was institutionalized, at that time, for all U.S. Navy units. 
The program's goal is to balance support of national objectives, with 
reasonable operating conditions for our naval personnel, while 
maintaining the professionalism associated with going to sea with a 
reasonable home life. The PERSTEMPO program is built around three 
specific goals:
          Maximum deployment length of six months.
          Minimum 2.0:1 Turn Around Ratio between deployments.
          Minimum of 50 percent time in homeport for a unit over a five 
        year period.
    FLTCINC's are required to submit a quarterly report to CNO 
encompassing the five year PERSTEMPO cycle. If a unit is projected to 
violate Turn Around Ratio or exceed deployment length maximum, an 
exception message with detailed justification will be forwarded to CNO; 
the message will also include a recommended course of action for any 
units in this category.
    Marine Corps Answer. The Marine Corps' rotational approach to 
deployments and its scheduling process has been successful in managing 
and meeting our commitments. This scheduling effort minimizes having to 
re-deploy Marines soon after they have returned home and ensures a 
minimum goal of a turn-around ratio between unit deployments of 2:1.
    For individual Marines, our unit commanders are relied upon to 
assign Marines to deploying detachments in an equitable manner. To 
assist in the management of this aspect, Marines amass Accumulated 
Deployed Time (ADT). T/AD is earned for each period of 10 days or 
greater away from home station. Upon amassing 365 days ADT, Marines 
receive a new overseas control date, and are eligible for reassignment 
to a non-deploying billet.
    Air Force Answer. We aggressively manage tempo to ensure time away 
from home is minimal and deployments are fairly distributed. The Air 
Force desire is to limit the total number of days Temporary Duty (TDY) 
for each individual, within a 12 month period, to less than 120. The 
Tempo Tracking System enables commanders at all levels to effectively 
manage their resources.
    To manage high tempo rates, the AF has implemented global sourcing 
of our low density/high demand assets which spreads the deployment 
burden throughout the Air Force; continued use of Reserve Component 
volunteers; reduced time in JCS exercises by 15 percent; initiated 
post-deployment stand downs; reduced standard aircraft rotations in Air 
Combat Command from 90 to 45 days; reduced Operational Readiness 
Inspections by 10 percent in fiscal year 1998 and plan to reduce 
another 30 percent by fiscal year 1999, eliminated Quality Air Force 
Assessments and awarded units inspection credit for real world 
deployments.
    Question. We are relying heavily on the Reserve components to 
support the ongoing operations in Bosnia and Southwest Asia. Can you 
describe how their level of participation in operations in recent years 
has risen?
    Army Answer. Recent deployments for the Reserve component have 
included soldiers from both the Army National Guard and United States 
Army Reserve. Specific instances include participation in various joint 
exercises and in ongoing operations, such as Joint Guard and Operation 
Southern Watch. As part of our ``Total Force'' concept, the Guard and 
Reserve are indispensable to U.S. military operations. The Reserve 
component's participation in operations has risen as the Active force 
structure has reduced and the employment of the military has increased. 
Examples of the Guard and Reserve providing valuable support include 
the counter-drug effort, Partnership for Peace, and the overseas 
deployment training program. Over 2,000 mobilized reservists supported 
operations in Haiti, during 1994-1995. Since December 1995, nearly 
16,000 Guard and Reserve soldiers have mobilized in support of 
operations in Bosnia. Only recently, 65 Army National Guard volunteers 
returned from Macedonia, where the soldiers provided engineer, military 
police, and aviation support for six months to Task Force Able Sentry. 
Currently, there are 205 Reserve component soldiers mobilized to 
support operations in Southwest Asia.
    Navy Answer. The Naval Reserve remains an active participant in 
Operation Joint Guard. To date, 523 Selected Reservists (Navy) have 
been mobilized under the current Presidential Selected Reserve Callup 
(PSRC) Authority. The Navy is limited to 150 Selected Reserves on PSRC 
in support of Joint Guard at one time and has sustained that level 
throughout the operation.
    To date, Navy has not mobilized (involuntary) Reservist for 
Southwest Asia. The PSRC authority is in place should we require its 
utilization. ``AT'' and ``ADT'' are to be used for training only 
(annual training, active duty for training), not support of contingency 
operations. The Navy does use Active Duty for Special Work in support 
of contingencies (Operation Joint Guard).
    Marine Corps Answer. The Marine Corps Reserve is an essential part 
of the Marine Corps Total Force. Over the past several years the Marine 
Corps has increased its use of reserve forces in operational missions 
and contingency operations. The Marine Corps relies on Reserve 
component members to augment and reinforce our active forces due to 
increased OPTEMPO. For example, Reserve Marines participated in 
Operations such as Restore Hope (116 Reserve Marines), Sea Signal (535 
Reserve Marines), and Uphold Democracy (49 Reserve Marines). Today, the 
Marine Corps is providing Reserve augmentation to Operation Join Guard 
(105 Reserve Marines) and the Iraq Crisis (41 Reserve Marines). Reserve 
forces are integral to the accomplishment of the Combatant Commands' 
mission requirements.
    Air Force Answer. Since the end of the Cold War, our reliance on 
the Reserve Component has increased dramatically.
    Air Force Reserve--From 1953 to 1990 the Air Force Reserve 
participated in a total of 11 contingencies. Over the last seven years, 
participation has risen 76 percent as the Air Force Reserve engaged in 
34 contingency operations spanning the globe. Reservists are 
participating an average of 80-120 days of military duty per year, 
(depending on their mission area) in addition to their civilian jobs.
    Air National Guard--The Air National Guard has used Volunteerism 
since Operation Desert Shield/Storm for all operations in Southwest 
Asia. The number of Guardsmen and Guardswomen deployed has risen 
exponentially since 1991. On any given day, the Air National Guard has 
at least 1,000 people deployed.
    In Bosnia, up until June 1996, we used volunteers for Operation 
Joint Guard, the peacekeeping mission in the former Republic of 
Yugoslavia. In our Air Traffic Control (ATC) function, we quickly 
exhausted our volunteer resources making it impossible to sustain a 
prolonged ATC presence that was required. That, combined with the fact 
that the Air National Guard owns a majority of the Air Force ATC 
resources, left us no other choice than to execute a structured, 
rotational Presidential Selected Reserve Call-up (PSRC), that continues 
to this day.
    Question. What is your perception of the impact these continuing 
deployments have had on Reserve personnel, their families, and their 
jobs?
    Army Answer. The Army Reserve conducted several soldier retention 
studies that focused on the question of deployment impact. Generally 
the level of impact and effects on retention are influenced by a 
combination of issues, e.g., soldiers' families, employment situation, 
and employer support along with each deployment. Findings from the 
study, surveys and focus groups over the last two-year period reflect 
that deployment alone has not been a sole reason for leaving the US 
Army Reserve. However, they are concerned about repeated deployments 
for operations other than war and the length of deployments, both of 
which affect their intent to remain in the Reserve.
    Generally, Army National Guard families do very well during 
mobilization and deployments. A number of factors contribute to this 
situation: trained volunteers; involved State Family Program Staff; 
soldier screening through personal interviews; and an active 
communication network. Guard families have continued to come far since 
Desert Shield and Storm, responding well to the demands of Guard 
deployments. This situation is attributed to the broad-based Guard 
Family Program instituted prior to Desert Shield and Storm. The 
National Guard Family Program invests a great deal of time and money to 
maintain the Guard family in a ready state in preparation for 
deployment. Additionally, ``Soldier-Screening'' is conducted 
immediately upon mobilization to identify soldiers and families of 
greater risk, who may not fare well during deployment. Investigation of 
the individual situations and, if appropriate, reassignment is 
practiced on a case by case basis. Units are brought back to authorized 
strength by ``cross leveling,'' using suitable volunteers from 
neighboring states and units to ``backfill'' those who cannot deploy 
due to temporary family factors. Hence, most potential problems are 
identified and mitigated before actual deployment. Through a combined 
strength of over 20,000 paid and volunteer staff, the communications 
network provides adequate coverage to ensure the quick flow of 
information, up and down, as well as laterally through the Family 
Program communication chain. This extensive family support network and 
infrastructure allows us to meet deployment family needs and hereby 
support the mission.
    During recent deployments, many Quality of Life issues have been 
identified and resolved. Unresolved issues are identified and are 
incorporated into the Army Family Action Plan and Guard Family Action 
Plan when not tasked to the proponent area of interest for resolution. 
Quality of Life issues are at the forefront of Army Guard concerns and 
will continue to be so.
    There does seem to be a point at which we will not be able to go 
back to the well.
    Navy Answer. The overall impact is a positive one. Although the 
recall authority is involuntary, the Navy has been successful in 
attaining Reservists who volunteer for these demanding assignments, who 
upon completion of their duties, often request to extend under Active 
Duty for Special Work (ADSW). The Reserve community embraces the 
opportunity to seamlessly integrate with the active Navy.
    Marine Corps Answer. There have not been any negative effects that 
have been observed on Reserve personnel, their families, and their 
jobs. Presidential Selected Reserve Callups total less than one percent 
of Marine Corps Reserve end strength and have been sourced with 
volunteers.
    Air Force Answer. Air Force Reserve--The Air Force Reserve 
conducted a command-wide survey in December and January to determine 
what impact high OPTEMPO is having on reservists, their families and 
their jobs. Overall, the survey indicated that employer and family 
support has remained relatively stable between 1994 and 1997. However, 
aircrews are experiencing a disproportionately higher level of stress 
resulting in greater job conflict, increased family problems, and 
decreased willingness to volunteer for reserve duty.
    Specifically, 10 percent of all respondents (including 17 percent 
of aircrew) are considering leaving the Air Force Reserve because of 
problems their participation is causing in their civilian employment. 
Twenty percent of respondents (including 44 percent of aircrews) 
indicated the Reserve is demanding too much additional time away from 
their civilian job. Thirty-five percent of respondents indicated the 
amount of time absent to perform Reserve duties is causing some family 
problems (only 2.5 percent indicated serious problems). Fifty-seven 
percent of aircrews indicated family problems (only 5.0 percent 
indicated serious problems). Aircrews are slightly less willing to 
volunteer as often or for as long a period as indicated in 1994. 
Despite these problems, over 69 percent of respondents (including 76 
percent of aircrews) are very satisfied with their reserve jobs. Fewer 
than 3 percent of respondents indicated they are very dissatisfied.
    Air National Guard--Other than the personnel who are called up for 
Presidential Selected Reserve Call-up (PSRC), there is minimal impact 
on our personnel, their families, and their jobs since they are 
volunteers. We have, on occasion, had an employer who did not like the 
fact that their individual was volunteering to go overseas for 30 to 90 
days. We work very closely with our employers through the Employer 
Support for the Guard and Reserve (ESGR) program to address these few 
instances.
    Our primary concern is in some PSRC situations. A case in point is 
our Bosnia deployment. Because the Air National Guard owns 70 percent 
of the Combat Communications and 62 percent of the Air Traffic control 
assets across the Air Force, we had to deploy these personnel under the 
PSRC. They have been deployed since June 1996 and some units have had 
to deploy twice. When we task personnel for a second 120 day tour 
within a two year period, in a military operation other than war, we 
begin to lose family and employer support.
    Question. Do you believe Reserve recruiting and retention will 
suffer as the result of the Bosnia deployment, for instance?
    Army Answer. Currently there are no documented analyses into the 
effect these deployments have on Army Reserve recruiting. 
Notwithstanding the absence of hard data, there still exists a 
widespread perception that multiple deployments of units over time does 
have negative effects on local recruiting markets, although the effect 
on the national market is negligible. The major effects appear to be 
limited to markets that surround the more heavily deployed units. The 
impact of repeated deployments on soldiers, their families, and their 
employers could eventually have a negative effect on retention as well. 
Over time this could cause a serious erosion in deployability of the 
very units that are most needed.
    Navy Answer. No. The overall sense of accomplishment is high and 
the Active and Reserve component are working side by side to provide 
valuable, real-time support to the war-fighting CINCs.
    Marine Corps Answer. No. We do not believe that Marine Corps 
Reserve recruiting and retention will suffer as a result of the Bosnia 
deployment, primarily because of the limited numbers of reserves that 
have been committed to the mission. The Marine Corps Reserve deployment 
in Bosnia consists of only 10 Civil Affairs Marines and limited staff 
support.
    Air Force Answer. Air Force Reserve--People are the heart and soul 
of any organization. This is especially true for the Air Force Reserve 
where each reservist is a patriot and volunteer. The Air Force Reserve 
Command's stated goals are to recruit and retain men and women who are 
best qualified and able to meet mission requirements; provide them with 
opportunities for development and advancement and a safe working 
environment; and ensure they communicate effectively with families and 
employers. Additionally, quality of life is a significant factor.
    In addition to their civilian jobs, our citizen airmen perform 80-
120 days of military duty per year, depending on their mission area. 
This puts stress on families and employers, which puts stress on 
Reservists, which, in turn, affects their job performance.
    We do not believe overseas deployments have negatively impacted 
reserve recruiting efforts. Successfully competing in a demographically 
changed marketplace with limited resources is our greatest challenge.
    Air National Guard--The only place we anticipate recruiting and 
retention problems is with our Air Traffic Controllers who have been 
under Presidential Selective Reserve Call-up (PSRC) since June of 1996. 
We have spread this tasking among all our units; however, we are 
starting to call on the same personnel for another 120-day tour. To 
alleviate the stress on our ATC community, we must very carefully 
determine how long we can continue to fill this requirement.

                      Readiness of Enlisted Forces

    Question. Gentlemen, are the enlisted forces suffering readiness 
problems because personnel, dollars, and other resources are being 
diverted to peacekeeping missions such as the open-ended operations in 
Bosnia and Southwest Asia?
    Army Answer. During a period of diminishing resources, we must work 
very hard to ensure that training, equipment and personnel strengths 
are constantly adjusted to ensure that the proper state of readiness is 
maintained. Some degradation to active component forces have occurred; 
however, the Army has taken great steps to ensure minimal readiness 
impact on our soldiers as we fulfill our wartime mission requirements 
consistent with the National Military Strategy.
    Navy Answer. No. since the Navy has received funding to support the 
incremental costs of these operations to date, we have not encountered 
readiness degradation as result. However, unfunded contingencies result 
in funds being diverted from non-deployed forces to deployed. Such 
action negatively impacts the balance of current readiness across the 
force by delaying vital equipment repairs and disrupting quality 
training.
    Marine Corps Answer. Marine enlisted forces are not suffering 
readiness problems because personnel, dollars and other resources are 
being diverted to peacekeeping operations. Readiness is the Marine 
Corps' first priority and as such, we take care of funding current 
readiness first. It is critical, however, that we be reimbursed for the 
cost of contingency operations and storm damage. If not, we will have 
to absorb the costs in support of our operating forces (ie, reductions 
to training and equipment maintenance), and the already underfunded 
area of base and station support.
    The Marine Corps is committed to Quality of Life (QOL) issues which 
do ultimately tie to readiness of the force. Marines can better focus 
on the mission if their families are taken care of and their housing 
and recreation needs are properly attended. In the past several years, 
we have made great progress in QOL areas with the help of both Congress 
and DoD. Increased Morale, Welfare and Recreation (MWR) funding has 
allowed us to refurbish old and build new fitness centers with 
permanent staff trainers onboard, improve base libraries with internet 
access, and refurnish the recreation rooms in each barracks with big 
screen televisions, better furniture, video games and in some cases 
mini-gyms. Child development care funding is on track to meet the 
sixty-five percent of requirement goal by fiscal year 2002. Within the 
limited resources we have available for maintenance of real property 
and military construction, we have placed a great deal of emphasis on 
bachelor enlisted quarters (BEQs). As currently planned, we will 
eliminate all inadequate barracks by fiscal year 2005 and will 
eliminate the backlog of maintenance and repair for the remainder of 
our barracks by fiscal year 2004. We will also reduce our current 13.6 
year replacement cycle for barracks furniture to a 7 year replacement 
cycle in fiscal year 2002.
    As long as unfunded contingency costs are reimbursed to the Marine 
Corps, QOL programs which are so vital to our Marines and ultimately to 
our continued readiness will be funded and ultimately readiness will be 
maintained.
    Air Force Answer. Our enlisted people, in fact all Air Force 
members, are feeling the impact of our sustained high TEMPO. This high 
TEMPO is a direct result of having to concurrently support a number of 
long term contingency operations under bare-based conditions for which 
we are not manned or resourced. Right now, the Air Force has over 
13,000 people deployed. That's equivalent to three large Air Force 
wings worth of people. These Airmen, and much of the equipment that 
supports them, must be taken out of hide. This means that not only are 
our deployed folks stressed, but those left behind must work longer and 
harder to keep up with the added ``workload'' created at home. While 
this extra effort has admirably maintained our readiness to meet our 
mission requirements, it is taking a toll on our people and we are 
seeing the results as decreased retention.
    Question. Do you have units experiencing shortages in personnel as 
a result of dramatic cuts to force structure or increased troop 
deployments overseas? If so, are we seeing more units falling into the 
``C3'' or ``C4'' category due to under-manning of units, lack of 
equipment or loss of training because of increased deployments?
    Army Answer. We are not seeing units falling dramatically in 
readiness because of increased deployments. Some units have experienced 
spot personnel shortages, but that was due to a recruiting shortfall in 
certain specialties (particularly infantry), coupled with a temporary 
strength shortfall. This situation was more pronounced during the 
latter half of 1997. The recruiting problem has been corrected and the 
programmed temporary strength shortfall is improving. We do not 
anticipate that personnel shortfalls will be a problem for the Army in 
1998. We are succeeding in bringing force structure and end strength 
into better balance. Consequently, the latest Unit Status Reports 
indicate that unit-manning levels are measurably improving. However, 
this will continue to be a balancing act by our personnel command to 
ensure that the right soldier at the right grade, Military Occupational 
Specialty, and skill level is at the right unit at the right time. With 
a force structure of 480,000, there is no room for error.
    Navy Answer. The shortfalls the Navy is experiencing today can be 
attributed primarily to a conscious decision a few years ago to reduce 
accessions, especially accessions of unskilled Sailors, to achieve 
mandated force level reductions yet keep faith with our career force.
    The Navy is working hard to fill these shortfalls in a very 
difficult recruiting environment--characterized by a strong U.S. 
economy, low unemployment and a low propensity for enlistment age young 
adults to join the military.
    The Navy has submitted to Congress a significant fiscal year 1998 
reprogramming request to move additional funds into the Military 
Personnel, Navy (MPN) account. Among the things this reprogramming will 
provide are:
          1. Increased funding to the Permanent Change of Station (PCS) 
        move program--which helps improve distribution.
          2. Increased funding to the Selective Reenlistment Bonus 
        (SRB) program--which helps retain Sailors with critical skills.
          3. Increased funding to the Enlistment Bonus Program, 
        advertising, and Navy College Fund programs--tools which will 
        assist Navy recruiters in attracting prospective recruits.
    With regard to ``C'' ratings, personnel shortages, when they occur, 
are normally experienced among our non-deployed forces. Because of our 
cyclical readiness posture, we expect non-deployed readiness (or ``C'' 
ratings) to drop soon after units return from deployment. This is a 
direct result of units entering the Inter-Deployment Training Cycle 
(IDTC) where ships and aircraft undergo various levels of maintenance. 
During the IDTC, proficiencies migrate to a basic level due to crew 
turnover and the reduced opportunity to train while conducting 
maintenance. Personnel shortages among units within the IDTC can be 
permitted without adversely affecting a unit's ability to achieve 
combat ready status in time to support their next deployment.
    Marine Corps Answer. The Marine Corps does not have personnel 
shortages as a result of force structure cuts or troop deployments 
overseas. The force structure cuts mandated by last year's Quadrennial 
Defense Review (QDR) did not make major cuts to the Marine Corps' 
endstrength. A recent USMC self-imposed force structure review has 
streamlined the Marine Corps for the future and also mitigated the 
effects of the QDR force structure reductions. Marine deployments have 
not significantly increased due to Bosnia or Southwest Asia, as Marine 
contingency responses are absorbed primarily by our normally scheduled 
forward deployed forces, such as our Marine Expeditionary Units (MEUs) 
and Unit Deployment Program (UDP) forces.
    Air Force Answer. We planned our force structure reductions to 
avoid personnel shortages in units. While the deployment of people to 
contingency operations results in shortages at the home base and may 
temporarily drive a degraded readiness level, of greater concern is the 
decline in our core enlisted experience base as a result of lower 
retention. TEMPO is identified as the primary reason our personnel 
elect to separate. We can increase our recruiting goals to make up for 
the loss of personnel, but we can not immediately replace the 
experience which departs with them.
    There is no one leading cause for units reporting degraded 
readiness levels. A rash of unforeseen engine problems, some shortages 
in spare parts, the aforementioned personnel shortages which result 
from extended and recurrent deployments, and other factors contribute 
to the recent decline in overall readiness levels.
    Question. Generally, how would you characterize the readiness 
levels of the active duty enlisted forces? Are they staying proficient 
for their warfighting mission?
    Army Answer. There has been no major change in the overall level of 
readiness within the Army. While the Army is smaller, it is no less 
combat ready than five or six years ago. Those forces needed to fulfill 
the Army's role in national defense are capable of accomplishing their 
assigned missions. The others maintain a level of readiness 
commensurate with their assigned defense roles
    The requirement to train and perform peace operations does degrade 
warfighting Mission Essential Task List (METL) skills of combat and 
combat support units. Combat service support units suffer far less 
readiness degradation because peace operations tasks closely relate to 
those type units' wartime METL tasks. The cross leveling requirement is 
especially demanding on non-deploying units, which must provide leaders 
and combat service support soldiers to deploying units. However, a 
temporary decrease in combat readiness in selected units is an 
unavoidable price for the Army's execution of our Nation's policy of 
engagement. Moreover, the Army has taken great steps to ensure the 
minimization of readiness degradation due to peace operations through 
deployable training packages, distance learning initiatives, 
simulations, and other training related initiatives.
    Navy Answer. Satisfactory. Due to the Navy's cyclical readiness 
posture, proficiencies differ during the Inter-Deployment Training 
Cycle (IDTC). Upon entering the IDTC, proficiencies migrate to a basic 
level due to crew turnover and the reduced opportunity to train while 
conducting maintenance. We have found that this cyclical posture makes 
the most efficient and effective use of constrained resources. However, 
as a unit approaches its next deployment, training opportunities and 
proficiencies increase to a level that will ensure personnel achieve 
combat ready status in time to support their next deployment.
    Marine Corps Answer. The readiness levels of our active duty 
enlisted forces are good overall, especially in our forward deployed 
forces and those preparing to deploy. The Marine Corps practices and is 
resourced for a cyclical approach to readiness. During normal peacetime 
operations our operating forces have some units that are forward 
deployed, some that have returned from deployment, and some preparing 
and training to deploy. This rotational cycle of Marine Corps elements 
is best described as one-third out, one third back, and one-third 
preparing to deploy.
    Upon a units return from deployment, their readiness rating slowly 
drifts down as resource priorities are more appropriately allocated to 
those units working up for deployment. When a unit moves to within six 
months of a Marine Expeditionary Unit (Special Operations Capable) 
deployment or within 3 months of a Unit Deployment Program (UDP) 
deployment to Okinawa/Iwakuni in Japan, manning and resource priorities 
are raised. A typical infantry battalion will be resourced above 90 
percent in personnel prior to and during their deployment, and their 
equipment will be at the highest readiness level.
    This cyclical readiness cycle is mirrored in most of our combat, 
combat support, and fixed- and rotary-wing squadrons. It is a proven 
and effective system. Cyclical readiness provides the theater Combatant 
Commanders with fully mission capable forward presence forces, and 
allows an efficient prioritization for personnel assignment, repair 
priorities and expenditure of increasingly tight Operations and 
Maintenance dollars.
    Overall, Marines are staying proficient with their wartime mission 
requirements, which is consistent with the Marine Corps' cyclical 
readiness approach as described above.
    Air Force Answer. My assessment is that our active duty enlisted 
forces are definitely ready to perform their wartime missions. However, 
to fully appreciate the effort necessary to maintain the required 
readiness levels, it is important to understand the tasks that confront 
them and the environment in which they operate. Our deployed airmen 
have been supporting several consecutive contingency actions for nearly 
eight years now. Many of our contingency bases began as bare base 
installations, where sustainment meant having to bring in most of the 
equipment and base support people. Meanwhile, back at home base, our 
remain behind airmen are working longer and more intense hours to keep 
the base running . . . filling the void left by those who are deployed. 
Every one of our aviation bases must still be guarded, aircraft still 
need to be flown and maintained, our troops and families still need 
base support services, and our people still need to train. Normal work 
stress becomes acute across the force when the deployed mission 
includes the need to rotate units, time and again, over an extended 
period.
    Airmen and their families are telling us they are getting tired of 
a way of life that cycles between 4-6 months per year TDY, and 55-plus 
hour work weeks when they are back home. As a result, more and more of 
our experienced airmen and officers are deciding to leave us, and it is 
left to our inexperienced people to shoulder the load.
    Again, my assessment is that Air Force people . . . enlisted, 
officer, and civilian alike . . . are doing the Nation's national 
security work well and with great pride. You will feel that when you 
visit the troops. You will see great teamwork and a serious sense of 
purpose. They will never let you down, no matter what. But, I suspect 
in a private moment, many of our airmen would tell you they are 
becoming professionally frustrated over the poor prognosis for a more 
managed way of life for them and their families.
    Question. As the senior enlisted for the Services' total force you 
monitor your Guard and Reserve components. How would you describe their 
overall readiness levels? Are they experiencing any personnel 
shortages, recruiting and retention problems, training deficiencies, 
etc.?
    Army Answer. In general, the readiness of both the Army National 
Guard and the Army Reserve have remained constant or improved slightly 
over the last three to five years.
    Historically, the Army Reserve's most significant overall readiness 
challenge has been attaining appropriate levels of Duty Military 
Occupational Skill Qualification (MOSQ) among it's soldiers. Through 
the Army's tiered resourcing management model, United States Army 
Reserve (USAR) units identified as ``first to fight or first to 
support'' on war plans received the greatest priority for funding and 
allocations in MOSQ producing schools. This provides the highest 
readiness levels feasible for Reserve Component tiered units to fully 
support the National Military Strategy. While the USAR annually 
experiences recruiting and retention challenges, they have not recently 
been at a level which directly deteriorates or impacts unit readiness.
    Overall strength and readiness of the Army National guard improved 
in 1997. However, there is a growing delta between requirements and 
resources in personnel funds to support schools and special training, 
and in operations to support minimal unit readiness of lower priority 
units. Even though some relief has been provided in this area by 
Department of the Army and the Office of the Secretary of Defense, it 
has not been enough to reverse the downward trend that is beginning to 
develop within the lower priority (later deploying) units.
    Navy Answer. The recruiting environment remains intensely 
competitive as a result of an excellent overall economy, declining 
military awareness, and a lower propensity of youth to join the 
military. Also, the inventory of Sailors leaving active duty does not 
match up well with the manpower requirements of the Naval Reserve, 
therefore we have had to rely on the more difficult recruiting programs 
such as the Advanced Pay Grade (APG) and Accelerated Initial Accession 
(AIA) programs to make goal. Despite the challenges we face, we 
anticipated making both officer and enlisted goals in fiscal year 1998. 
Retention in the Naval Reserve has been steady.
    Marine Corps Answer. The readiness of the Reserves to execute its 
role in augmenting and reinforcing the Active Component continues to 
increase. In addition, COMMARFORRES is implementing a readiness 
campaign plan to achieve C-1/C-2 readiness in all units assigned to 
CINC operational plans by 2003.
    Personnel--Regarding recruiting and retention and personnel 
shortages, during the past two years (fiscal years 1996-1997) the 
Marine Reserve has met its authorized/target end strength (42,000). We 
are on target to meet the fiscal year 1998 endstrength goal. We are 
focusing our main efforts on increasing the Military Occupational 
Specialty (MOS) match rates within Selective Marine Corps Reserve (SMCR 
units).
    Training--Our unit training levels are high. Of the 56 Mobilization 
Operational Readiness Deployment Tests or MORDTs conducted in fiscal 
year 1997, all were found to be mobilization capable. Regarding the 
Marine Corps Combat Readiness Evaluation System (MCCRES) conducted on 
Reserve units in fiscal year 1997, 15 of 15 units passed on the first 
attempt giving clear evidence of the combat effectiveness of Marine 
Reserve units. Also, more than 7,300 Marine Reservists participated in 
five Combined Arms Exercises at MCAGCC 29 Palms. Marine Forces Reserve 
constantly seeks training opportunities that enhance training while 
improving motivation and troop morale fostering a higher retention.
    Air Force Answer. Yes, we closely monitor our readiness levels. Air 
National Guard Readiness capability continues to exceed 90% despite 
steadily increasing deployment commitments to support contingency 
operations. At this time, the steady increase in deployment commitments 
has not degraded our readiness, but we continue to closely monitor our 
PERSTEMPO in order to minimize or eliminate any future consequences. 
Our Readiness capability continues to be significant in that it 
consistently parallels the Readiness capability of the Active 
Component. We experience ongoing but insignificant shortages in 
recruiting and retention programs as they relate to readiness. The 
recruiting market continues to shrink on the non-prior and prior 
service front, and the constantly increasing deployment requirements 
continue to challenge our retention force to maintain our trained 
assets. We are also currently experiencing a minor force drawdown, 
which enables us to focus on precision recruiting and retention, i.e., 
recruiting primarily for valid vacancies and diversity goals, and 
retaining the right individuals through member satisfaction and 
incentive programs to assist in our overall effective manning and 
diversity objectives. However, this in itself poses additional 
challenges to our recruiting and retention force that require 
additional time and resources. The Air National Guard experiences 
cyclical shortfalls in training due to occasional lack of funding and 
resources that have a minor impact on the overall readiness of this 
force.

                Child Care and Family Advocacy Programs

    Question. The military has approximately 550,000 enlisted parents, 
with a total of 1.1 million children. The enlisted forces are 
approximately 78 percent of the total child care users in the 
Department of Defense (DoD), with 15 percent being officers, and 7 
percent DoD civilians. What percent of your force is married with 
dependents? What percent of your force is single parents with children?
    Army Answer. Forty-five percent of all soldiers are married and 
have dependent children. Single parents make up four percent of the 
Army.
    Navy Answer. Data from the 1997 Navy-wide Personnel Survey and the 
1997 Quality of Life Survey show that 41 percent of all Navy personnel 
are married with dependents and four percent are parents with children.
    Marine Corps Answer. Of the Marine Corps enlisted force, 26.90 
percent is married with children. Less than half of one percent (0.44 
percent) of our enlisted force are single parents with custody.
    Air Force Answer. Active Duty Air Force--Currently, 46 percent of 
Officers are married and have children in-household, while 35 percent 
of Enlisted members are married and have children in-household. 
Overall, 37 percent of active duty Air Force members are married and 
have children in-household.
    ``Single'' defined as: Single, Divorced, Widowed or Annulled--1 
percent of Officers are ``single'' parents with children in-household, 
while 3 percent of Enlisted members are ``single'' parents with 
children in-household. Overall, 2 percent Air Force members are 
``single'' parents with children in-household.
    Question. Do you believe the quality of the child development 
programs and the availability of spaces in the child care facilities is 
adequate for your service? If not, why not?
    Army Answer. Yes. The Army has made tremendous strides in improving 
the quality of child care. Eighty-three percent of our child 
development centers are nationally accredited. The Army is currently 
meeting 65 percent of the potential demand for child care, which is the 
DoD goal. In addition to child care facilities, we must provide child 
care through Family Child Care Homes in government quarters and 
alternative programs to ensure that soldier-parent needs are met. Each 
installation has its own child care availability plan to meet unique 
local requirements.
    Navy Answer. The quality of the Navy child development program is 
outstanding, and this is acknowledged by those who use the service. Our 
program is in full compliance with the quality standards prescribed by 
the Military Child Care Act. Our program managers conduct annual 
inspections of all child care activities to measure and assure 
compliance with the act.
    Currently, we do not have sufficient capacity to support the DoD 
goal of meeting 65 percent of the potential need. However, we have a 
funding plan in place and are pursuing initiatives, described below, to 
achieve this goal by fiscal year 2003.
    Our current capacity and future plans include: At the end of fiscal 
year 1997, Navy's child care capacity was 38,600 children; this 
included child development centers (14,360 spaces), family child care 
(12,114 spaces), and school age care (12,126 spaces). This permitted us 
to meet 52 percent of the potential need. Currently the 65 percent 
potential need goal for children ages 0-5 is 36,421 spaces and 11,807 
spaces for children ages 6-12. Our child care expansion plan is 
programmed to meet 65 percent of the potential need by fiscal year 
2003.
    We are testing a number of innovative approaches to expand child 
care capacity more quickly, and possibly reduce the cost per space. 
These initiatives include resource and referral, expansion of in-home 
family care to off-base homes of Navy personnel, subsidies for in-home 
family child care to help increase the number of care givers, and 
contracting for spaces in off-base civilian centers with subsidies, as 
necessary.
    Marine Corps Answer. The child development programs offered by the 
Marine Corps are of excellent quality. We are still working to expand 
the availability of these services and have yet to reach our goal for 
providing for 65 percent of the requirement. Full funding to support 
this will not be available until fiscal year 2002 as currently planned. 
In the interim, we are implementing cost effective measures to ensure 
the best use of current resources. Our greatest unmet need is for 
infant care which is also the most costly service for us to provide.
    Air Force Answer. Currently, the Air Force is able to meet 58 
percent of the need for child care for children 0-12 years of age of 
single parents, dual military, and dual working families of active duty 
and DoD civilian families. Through Congress' generous support, we have 
construction funded to meet 65 percent of the need by 2002. Of the 
remaining 35 percent of the need, we expect that some of it can be met 
through more informal child care arrangements including spouses working 
different shifts. We will continue to request Military Construction 
projects to meet the remaining need, especially at remote and overseas 
locations where parents have no other options than to use on-base 
centers. In addition, we are using youth centers and DoDDs schools to 
provide school age care programs and expanding our family child care 
program.
    Question. Is the growing number of single parents and dual-military 
parents a concern to commanders?
    How do single parents and dual-military parents manage their 
parental responsibilities when required to deploy, participate in field 
exercises, or work extended hours?
    Army Answer. This issue has been brought up to me as I visit the 
units. Commanders are concerned. The Chief of Chaplains and I are now 
looking at the readiness impacts of pregnant soldiers and single 
parents. Commanders know that an increase in the number of single 
parents and dual-military parents is a reality of today's Army. They 
provide support to these families by enforcing the standard that all 
soldiers with dependents develop workable family care plans, monitoring 
the plans continuously, and insuring that those plans can be executed 
by soldiers in a timely manner should the need arise.
    However, the primary responsibility lies with the single parents 
and dual-military couples with dependents who are required by Army 
policy to maintain family care plans. These plans outline how 
dependents will be cared for during eventualities such as deployments, 
field exercises, and so forth. The Army has developed a standard form 
which soldiers use to develop these plans. Use of this form insures 
that all aspects of family care are systematically addressed when the 
Family Care Plan is created. Providing for care of Army family members 
is the responsibility of the soldier. Commanders have the 
responsibility of enforcing the standard that all soldiers with 
dependents develop workable family care plans, continually monitoring 
those plans, and insuring that they can be executed by soldiers in a 
timely manner should the need arise.
    Navy Answer. The growing number of single parents and dual-military 
parents has been and remains a concern to commanders. With these 
growing numbers comes an increased demand for outside normal working 
hours child care, i.e. duty and shift workers. As we begin to 
restructure our child care to focus on providing infant care through 
family child care in private homes, we are creating more flexibility 
for new parents as they adjust to their parenting role. Navy child 
development centers have never fully addressed these needs, so 
alternatives must be found as the PERSTEMPO remains high. With the 
demands being placed on our people's time there is a related increase 
in the number of family advocacy cases. This is also directly related 
to both increased awareness and better communications between commands, 
security and the family advocacy program to identify problems and 
quickly address family needs. Our commanders definitely face increasing 
challenges in dealing with the growing number of personnel issues 
relating to these two topics, coupled with decreasing flexibility in 
assigning personnel while still treating all members equitably.
    As required by DoD policy, the Navy has developed a family care 
policy to assist single parents and dual-military couples in developing 
workable family care plans. Single parents and dual-military couples 
are required to complete a Family Care Certificate which details the 
care provisions for their dependents when they are unavailable due to 
deployment, temporary duty, extended work hours, or any other 
circumstances which requires their absence.
    Marine Corps Answer. Yes, Marine Corps commanders are keenly 
concerned that all members of their command be ready for deployment at 
any time. The personal readiness of Marines is directly affected by the 
arrangements they have made for the care of their families when they 
deploy, particularly in the case of single parents with custody of 
children, and dual military couples. To ensure a high state of 
readiness, these Marines are required to complete a comprehensive 
``Family Care Plan'' that provides provisions for all possible 
contingencies, both short and long term. The family care plan must 
include a signed agreement with a designated caregiver, as well as 
arrangements for financial, logistical, and medical care. The family 
care plan becomes part of the Marine's Service Record Book and is 
reviewed upon checking into a new unit, during annual audits, and 
during pre-deployment checks. The Inspector General of the Marine Corps 
is tasked with verifying that family care plans are included in the 
inspection process.
    Marine Corps Order 1740.13A requires single parent Marines, or dual 
military couples with dependents to have a Family Care Plan. This plan 
outlines responsible care arrangements for their children in the event 
of rapid deployment situations. Several options are available to 
parents for managing their parental responsibilities, i.e., Child 
Development Centers which are normally open for ten or twelve hours a 
day, and meet most parents' routine needs. For Marines required to 
participate in field exercises, or work extended hours, the Family 
Child Care homes offer a variety of options, to include night and 
weekend care, as well as, routine full day and part day care.
    Air Force Answer. The single parent/military couple issue has not 
surfaced as a significant concern. Less than 8 percent of single 
members are parents with children in-household, and 26 percent of 
military couples are parents with children in-household.
    All Air Force members with families (Regular Air Force, US Air 
Force Reserve [including individual mobilization augmentees and 
Individual Ready Reserve], and Air National Guard) are required to make 
family care arrangements for both short- and long-term deployments. 
These plans must detail who, when, where and how someone will care for 
their dependents in the event of a deployment and provide for a smooth, 
rapid transfer of responsibilities to designated individual(s) during 
the absence of the military member(s). The individual, Squadron 
Commander, and First Sergeant all share in monitoring this 
responsibility.
    Single parents, dual military couples with family members, and 
members with civilian spouses who have unique family situations (as 
determined by their commander) are required to complete a written plan 
in accordance with Air Force Instruction 36-2908. The plan is 
maintained by the members' commander or First Sergeant and is reviewed 
at least annually for accuracy and workability. Family care plans can 
be and sometimes are reviewed and tested during major inspections.

                Department of Defense Dependents Schools

    Question. The Department of Defense Dependents Schools (DoDDS) 
program operates 162 schools in 14 countries world-wide and reaches 
over 80,000 students. What feedback have you received from the enlisted 
personnel about the quality of the DoDDS education program, 
particularly at overseas bases? How well do they believe it compares 
with other schools?
    Army Answer. Overall, enlisted parents are satisfied. Feedback from 
past parent surveys (DoDDS Report Card), visits to schools, and 
Community and Family Support Center (CFSC) parent forums have validated 
parental satisfaction. Parent forums have surfaced student transition 
concerns, such as inadequate career planning and college search, 
scholarship information for juniors and seniors in overseas areas, and 
loss of credits for graduation. Recently, staff has been assigned to 
identify DoDDS and public school family member education issues and 
develop solutions. Parents are encouraged to be proactive in the 
schools. This increases the level of satisfaction.
    Navy Answer. Most of feedback from Sailors on the quality of DoDDS 
education program has been very positive. At smaller schools overseas, 
there are some concerns about the depth of the academic programs and 
availability of extracurricular activities.
    Marine Corps Answer. DoDDS impacts Marine Corps families mostly in 
Okinawa. The school system is seen as the President's own and is very 
much attuned to Department of Education goals 2000. DoDDS is 
overwhelmingly seen as a high quality program--with standardized test 
results consistently above the national percentile. In comparison to 
other schools, DoDDS is working to increase the number of minority 
teachers employed by the system to bring the racial balance closer to 
that of the student population. DoDDS is also working very effectively 
to improve communication with families and the Services. The School-
Home Partnership is a prime example of this.
    In the past year, the only parent issue was one case of a spouse 
being unable to register a child in school when the service member was 
not present. Department of Defense Education Activity was contacted to 
correct the school's misunderstanding and no further complaints have 
arisen. Difficulties that have been cited include the sharing of DoDDS 
classroom facilities with Voluntary Off-Duty Education Programs. This 
was surfaced by a third-party Military Installation Voluntary Education 
Review (MIVER), when the MIVER team visited Camp Butler and Camp 
Foster. Additionally, high school facilities, particularly specialized 
science and language laboratories, could not be used for evening 
college classes.
    Air Force Answer. Overall, enlisted parents are satisfied. Feedback 
from past parent surveys (report card), visits to schools and parent 
forums by Advisory Council members, and occasional Congressional 
inquiries, include: (1) Long bus rides to and from school is a problem 
in some overseas locations. (2) Juniors and seniors attending schools 
in overseas areas do not get the same career planning and college 
search information as they would receive in the U.S. (3) Athletes miss 
the opportunity of being watched for potential scholarships. (4) More 
programs for talented and gifted students are desired. (5) Parents were 
not always informed of curriculum changes. (e.g. Math program 1995).
    In 1995 and 1996 (the latest data readily available), DoDDS 
students compared favorably to national averages on standardized tests. 
On the Comprehensive Tests of Basic Skills, DoDDS students consistently 
exceeded the national average in all 5 disciplines of reading, 
language, social studies, math, and science for all 3 tested levels 
(grades 3, 7, and 11). In 1994 and 1995, DoDDS students outscored the 
national average on the verbal component of the Scholastic Aptitude 
Test (SAT), a common college entrance exam.
    There are no reports of DoDDS not being comparable to a local 
stateside school district.
    Question. What do you see as the major strengths and weaknesses of 
the DoDDS schools?
    Army Answer. Specified strengths and weaknesses were based on 
school visits and parents forums conducted during site visits. 
Identified strengths include strong military-school partnerships, 
diversity of the student body, and a strong School-Home Partnership 
Program which strengthens parent/school communication and parent 
involvement.
    Several weaknesses were also identified. There is a need for DoDDS 
to be more aggressive in bringing the American culture together with 
the culture of the host country. The bus time between some locations is 
extensive, and most routes lack bus monitors. There are too few 
vocational/technical courses to balance a pre-college curriculum. There 
is also a lack of sporting events and sufficient honors courses. 
Stateside school facilities are in need of repair, and teacher's aide 
positions in stateside schools are not consistent with most local 
schools.
    Navy Answer. The major strengths of DoDDs schools include the 
education level of teachers, 65 percent possess master's degrees, 
foreign language programs and intercultural experiences. Also, DoDDs 
students perform above the national average on standardized tests.
    Major weaknesses of DoDDs schools occur mostly at smaller schools 
with less than 450 students. The depth of academic programs is less 
than at larger schools and extracurricular activities are not as 
extensive. Also, teachers at smaller schools are required to teach 
multiple subjects and teach more than one grade level. Affecting all 
DoDDs schools to some degree are the interruptions caused during the 
school year by PCS transfers.
    Marine Corps Answer. The DoDDs school system is seen as the 
President's own and is very much attuned to Department of Education 
goals 2000. DoDDs is overwhelmingly seen as a high quality program--
with standardized test results consistently above the national 
percentile. Sharing of DoDDs classroom facilities with Voluntary Off-
Duty Education Program was cited as an issue by the third-party 
Military Installation Voluntary Education Review (MIVER), when the 
MIVER team visited Camp Butler and Camp Foster. High school facilities, 
particularly specialized science and language laboratories, could not 
be used for evening college classes.
    Air Force Answer. The major strengths of DoDDs schools are a strong 
military-school partnership, a strong emphasis on staff development, 
and a diverse student body. Since there is always room for improvement, 
increased cultural interaction (with the host country) could enrich the 
DoDDs students' educational experience.

                       Gender Integrated Training

    Question. In June 1997, the Secretary of Defense appointed the 
Federal Advisory Committee on Gender-integrated Training and Related 
Issues to assess the current training programs of the Military Services 
and determine how best to train a gender-integrated, all volunteer 
force. The recommendations of the December 1997 Kassebaum Report center 
on the quality of recruits and the need to instill discipline 
throughout the training process. The report also recommends 
establishing separate barracks for male and female recruits. The 
January 1998 Defense Advisory Committee on Women in the Military Report 
highlights some of the same issues as the Kassebaum Report but adds 
that the services need to establish and enforce clearer gender related 
policies in areas such as fraternization. The Committee understands the 
military services are developing their recommendations independently on 
the Kassebaum Report. Would you please give the Committee an indication 
of your position?
    Army Answer. The Army must train as it fights. Male and female 
soldiers are integrated in non-combat units and work together to 
complete missions. The ability of soldiers of different genders to work 
together in troop units is a soldierization issue which we must begin 
to address at the level with the most control--Basic Combat Training 
(BCT). Gender-integration of soldiers at squad level should continue in 
BCT, so that we do not pass the mission of training soldiers how to 
live and work together as a team on to the war-fighting force. 
Discipline, values, teamwork, dignity and respect for others are all 
training objectives in Initial Entry Training (IET). The expansion of 
BCT by one week will build on those objectives and includes 27 hours of 
human relations training for recruits covering the Army policy on 
unprofessional relationships and fraternization.
    The Army is modifying current IET barracks configurations to 
provide physical separation of sexes by a lockable barrier. Training 
and Doctrine Command (TRADOC) is currently conducting a study to 
determine the total costs associated with this configuration. All 
soldiers deserve and should reasonably expect a ``safe and secure'' 
environment. However, separating soldiers of different genders into 
different buildings prevents team building, cohesion, and esprit 
necessary for molding soldiers.
    Navy Answer. I believe that the recommendations of the report are 
essentially on target, and I am proud that the Navy had initiatives 
already underway to address many of the recommendations before they 
were identified by the report. I am not in agreement however, that it 
is best to train young men and women Sailors separately. We subscribe 
to the basic tenant that Sailors should train the way they fight. They 
will fight side by side, and they will berth on the same ship in 
separate berthing compartments. Berthing young men and women Sailors 
the way we currently do at RTC, in the same barracks but in separate, 
secure compartments, closely approximates the way they will live aboard 
ship. The last thing as a command master chief of a gender-integrated 
ship that I would want is for young Sailors reporting to their first 
ship to not be accustomed to the idea that they will work and live in 
proximity to each other.
    Marine Corps Answer. Discussion: On December 16, 1997, the Federal 
Advisory Committee on Gender-Integrated Training and Related Issues 
completed their six-month assessment of the armed forces' initial entry 
training programs and provided their recommendations on how best to 
train the young men and women of today for tomorrow's missions. 
Specifically, the Committee reviewed the armed forces' recruiting 
practices, basic training, and advanced training--what the Marine Corps 
calls Making Marines. The Marine Corps appreciates the efforts of 
Senator Kassebaum Baker and her commission in their scrupulous review 
of the process by which we transform America's youth into your Corps of 
Marines. Their insights are valuable and their recommendations timely, 
as we face the many emerging challenges on the chaotic battlefield of 
the post-Cold War world.
    The two most important things that the Marine Corps does for the 
Nation are to make Marines and to win battles. Two years ago, we 
implemented changes and improved the process by which we make Marines. 
The young man or woman who now desires to be a U.S. Marine undergoes a 
veritable transformation. This transformation is not just a new block 
of instruction or a new event at recruit training; it is a process that 
begins with the first contact with the Marine recruiter and continues 
through a Marine's entire time with the Corps. The transformation now 
consists of four phases--recruiting, recruit training, cohesion, and 
sustainment--each of which is essential to the process.
    In their report, the Commission also addressed the training process 
as a continuum, and generally their recommendations revalidate the 
Corps' transformation philosophy. In many instances, their 
recommendations can strengthen and refine the process. We have 
thoroughly reviewed the commission's recommendations. Our detailed 
comments follow:
    detailed review on gender-integrated training and related issues
1. Recruiting policy
    Recruiting is the future of the Marine Corps. Our ability to 
conduct nonprior service recruiting directly affects our readiness for 
combat. By design, the Marine Corps is a relatively junior force, with 
68 percent of our Marines serving their first term of enlistment. As a 
result, we must replace over 20 percent of our non-prior service 
regular enlisted force and over 14 percent of our reserve non-prior 
service enlisted force each year. Two decades ago, the Marine Corps 
reorganized recruiting to establish a key link between recruiting and 
recruit training. The operational commanders at each recruit depot were 
given responsibility for recruiting in sufficient quantity and quality, 
in addition to their previous responsibilities for recruit training. 
This linkage is critical to maintaining quality standards throughout 
the recruiting and recruit training process.
    a. Recommendation: ``Decrease the emphasis on monetary incentives 
in advertising and public relations campaigns and emphasize more 
motivational themes of challenge and patriotism.''
    Comment. Concur. Since the late 1970's, the Marine Corps has 
embraced a marketing strategy in line with the committee's 
recommendations. Marine Corps advertising strongly emphasizes the theme 
of the smart, physically fit, tough warrior. The purpose is to 
establish a relationship between the prospect's needs and the 
intangible benefits the Marine Corps offers and expects--honor, 
courage, and commitment. The Marine Corps directs its primary enlisted 
recruiting effort toward the 16-19 year old males and females. We 
portray the individual Marine and Marine Corps as something special and 
seek to reinforce those qualities that constitute ``what a Marine is 
made of.'' The cornerstones of the strategy are honesty and integrity, 
an appeal to the ``intangibles'' of Marine Corps service--mental and 
physical challenges, leadership skills, self-discipline, and the 
concept of a tough and smart Corps consisting of men and women of 
character.
    b. Recommendation. ``Link recruiter's full credit for a recruitment 
to the recruit's performance in basic training.''
    Comment. Concur. For evaluation purposes, the Marine recruiter is 
directly linked to a recruit from initial contact through the recruit's 
graduation from training. Recruit attrition, by recruiter, is tracked 
within the Marine Corps Recruiting Command at all levels. It is 
considered for awards, meritorious promotions, and fitness reports.
    c. Recommendation. ``Utilize the Delayed Entry Program to better 
prepare recruits mentally and physically.''
    Comment. Concur. The Marine Corps Delayed Entry Program (DEP) is 
the key to preparing future recruits for the rigors of recruit training 
and setting them on the proper course for their first term of 
enlistment. Recruiting is, in fact, the first phase in the 
Transformation of a civilian into a Marine. It is here in the DEP that 
we will begin to build the prospective recruit physically; teach them 
our core values; and prepare them mentally for what they will face in 
recruit training. Once in the DEP the recruiter is required to maintain 
weekly contact with prospective recruits and lead them in the 
installation of core values. Recruiters are expected to provide regular 
physical fitness training for their prospective recruits and remedial 
training for those who require it. Drill instructors (DI's) are often 
in attendance at ``pool'' functions in order to provide first hand 
information to the prospective recruits on what to expect in recruit 
training and answer questions they or their parents may ask. Of 
particular importance is the use of female DI's at these events to 
answer questions and speak to the female recruits as a group. We 
require that all recruits pass the Initial Strength Test of pullups 
(flexed arm hang for females), situps, and a 1.5 mile run (1.0 mile for 
females) prior to reporting to the recruit depot. In addition, the DEP 
serves another purpose. It provides the Marine Corps with an 
opportunity to observe and monitor the recruit and ``cull out'' those 
who use drugs, become involved with the police, fail to graduate from 
high school, are not at the desired level of physical fitness to begin 
recruit training, or simply do not have the ``heart'' to be a Marine.
    d. Recommendation. ``Improve recruiter training so that recruiters 
provide more informed, up-to-date, and consistent information to 
potential recruits.''
    Comment. The Marine Corps is committed to ensuring recruiters 
provide recruits with the most accurate, up-to-date, and consistent 
information available. To that end, recruiters are thoroughly trained 
before assignment to a Recruiting Station and throughout their tour.
    After careful initial screening, prospective recruiters must pass a 
seven-week course of instruction at Recruiters School, MCRD San Diego. 
The Basic Recruiter Course prepares prospective recruiters for the 
demanding task of canvassing recruits. The course consists of the 
following instructional areas: Sales Training; Communications Skills 
Training; Systematic Recruiting Process/Recruiting Station Operations; 
Quality Enlistment Procedures; and Product Knowledge.
    Classes in Leadership, Recruiter Ethics, Legal Responsibilities, 
and Financial Management add to the Program of Instruction for 
recruiter training. Graduates of the school are considered to be 
``basic recruiters'' in a trainee status.
    During the first nine months after a recruiter arrives at the 
Recruiting Station, the command group ensures a positive transition 
with additional training and assistance through a series of training 
sessions and recruiter evaluations. These include, Proficiency and 
Review Training, Proficiency and Review Evaluation, and quarterly 
recruiter evaluations. Throughout the recruiter's three year tour, the 
training and evaluation are one continuous process. Since the 
recruiters are in the direct chain of command of the recruit depot 
Commanding Generals, they receive continuous updates through 
conferences, training events, briefings by Recruit Training Regiment 
personnel, and visits to the recruit depots themselves.
    e. Recommendation. ``Increase the number of female recruiters.''
    Comment. We are seeking to increase our numbers of female 
recruiters and concur with the committee's recommendation. In addition 
to recruiting, there are increased demands for female Marines in other 
critical billets, such as DI and instructor duties at follow-on 
schools. There are approximately 8,063 female Marines on active duty, 
but only 25 percent are career Marines who qualify for the numerous 
Special Assignment requirements (which include recruiting duty). As we 
have increased the number of women in the Marine Corps, we are making a 
concerted effort to have our recruiter population reflect that growth. 
We are not there as of yet. However, more females are now assigned to 
recruiting duty than ever before. Last year we began the assignment of 
female majors as recruiting Station Commanding Officers and the 
assignment of female company grade officers as Recruiting Station 
Executive Officers and Operations Officers. Four of our seventy-one 
Officer Selection Officers are currently female officers. We are 
actively seeking more female NCOs to join our career recruiter force. 
The simultaneous competing demands for DI's, recruiters, and Marine 
Security Guard Battalion personnel, all chosen from the best of our 
female NCOs and SNCOs, add to the challenge of keeping as many females 
on recruiting duty as we would like. Our recruiting stations augment 
their female recruiters by using female Marines from around the Marine 
Corps, including DI's, to attend functions with members of the DEP. 
Their express purpose is to speak directly with prospective female 
Marines and answer their questions.
    f. Recommendation. ``End extended leave for basic training 
graduates in the recruiter's assistant program.''
    Comment. Non concur.
    Marine Recruiters face historically low levels of both unemployment 
and propensity to enlist. Propensity has consistently declined from its 
peak in the mid-1980s, leveled at a historic low and shows little sign 
of increasing in the near term. Military service is not seen by large 
percentages of the youth market as a sound career option, and perhaps 
most importantly, those who influence a potential decision--parents, 
relatives, teachers, coaches--themselves have no military experience. 
The assignment to a recruiting substation of new Marines--through the 
Permissive Recruiter Assistance Program (PRASP) for a period of up to 
30 days--provides a role model in the community who is a living example 
of the ``Transformation.'' PRASP is a sound investment during a period 
of reduced propensity and limited resources. Last year PRASP Marines 
accounted for approximately 4,000 contracts. To attain these same 
numbers of recruiters in the field would require a commensurate 
increase in facilities, vehicles, support costs, and a reduction of 
career Marines available for assignment to the operating forces.
    During fiscal year 1996, 5,649 Marines participated in PRASP in 
their hometowns at no expense to the government. This time was in 
addition to their boot leave. Those 5,649 Marines netted the Marine 
Corps 1,608 individuals who joined the Marine Corps. During fiscal year 
1997, with a change to our process for approving participation in the 
program, 14,263 new Marines participated in PRASP and increased the 
number of individuals joining the Marine Corps to over 4,000 contracts. 
We are seeking all means to reduce the time awaiting training. PRASP, 
however, is a means for turning that time into productive effort.
    The Marine Corps shares the Committee's concern with the negative 
effects that extended leave can have on a recent recruit graduate. We 
are renewing our efforts to sustain the discipline, military bearing, 
and physical conditioning to those Marines assigned to PRASP.
2. Training cadre
    Marine Corps DI's epitomize the title ``Marine.'' The DI's sole 
responsibility is to take American men and women and transform them 
into Marines, as they are both a role model and a mentor to recruits 
while they are in recruit training.
    a. Recommendation. ``Improve screening of training cadre candidates 
prior to selection.''
    Comment. The Marine Corps agrees with the committee that a 
``thorough and uniform'' screening of potential DI's is essential to 
providing an effective training cadre. To that end, there is extensive 
screening of all prospective Marine Corps DI's prior to and during 
their training program. A four-phase screening process begins with an 
initial screening at the Enlisted Assignments Branch, HQMC with a 
thorough review of the Marine's official military personnel file. In 
accordance with MCO 1326.6C Selecting, Screening, and Preparing 
Enlisted Marines for Drill Instructor, Recruiter, and Independent 
Duties, the second and most critical screening is undertaken by the 
Marine's Commanding Officer (CO). It is the CO who knows and works with 
the candidate and truly plays the most important role in the screening 
process because of their personal knowledge of the individual, access 
to the Marine's service records, and performance information not 
readily available to HQMC. The CO's screening is designed to assess 
whether the potential DI has the maturity, leadership, and judgment 
required for making Marines. The CO's screening encompasses the 
following areas: Education (DI education should equal the majority of 
recruits), Disciplinary record, and Medical qualification, importantly, 
a chance to interact with recruits. Upon completion of DI school, new 
DI's are assigned to ``veteran'' teams which allows for mentoring and 
the continuing development of younger, less experienced DI's.
    c. Recommendation. Increase the number of training cadre (in the 
Army, Navy, and Air Force).
    Comment. Not applicable.
    d. Recommendation. ``Increase the number of female trainers.''
    Comment. The Marine Corps recognizes the need to increase the 
number of female Marine trainers at Marine Corps Recruit Depot Parris 
Island. During September 1997, the Commandant of the Marine Corps 
directed that the number of female DI's at Parris Island be increased 
from 76 to 80, in order to accommodate increasing accession of females 
and to improve the quality of life for female DI's. To support the near 
term increase and long term fiscal year 1999 increases, the following 
actions are being taken:
    (1) On October 30, 1997, the Commandant of the Marine Corps wrote a 
personal letter encouraging prospective female DI's to volunteer for 
this critical duty.
    (2) Reinstated the DI Screening Team. This team briefs and recruits 
female Marines for DI duty. The team includes the Commanding Officer 
and Sergeant Major of 4th Recruit Training Battalion, as well as two 
working DI's and the DI Monitor from the Personnel Management Division.
    (3) The Enlisted Assignments Branch (MMEA) has instituted a search 
that has identified and screened career female Marines who meet the DI 
requirements. These Marines will be screened by the DI Screening Team 
or during MMEA Command Visits, with the intent of increasing our 
numbers of qualified DI's.
    Increasing the number of female trainers will take the concerted 
effort described above because the number of female Marines available 
is limited. As mentioned in the response to recommendation 1(e) above, 
there are approximately 8,063 female Marines on active duty, but only 
25 percent are career Marines who qualify for the numerous Special 
Assignment requirements (which include DI duty). In addition to DI 
duty, there are increased requirements for female Marines in other 
critical billets, such as recruiting and instructor duties at follow-on 
schools.
    The increased number of female DI's will enable the Marine Corps to 
maintain an optimum instructor-to-recruit ratio. Female platoons in the 
female battalion begin training with 45-60 recruits, supervised by 
three female DI's. This DI to recruit ratio of 1 to 15/20 has proven 
effective in conducting and supervising training at the platoon level 
and is comparable to the ratio in male recruit platoons. The majority 
of recruit training takes place at the platoon and series level, and is 
normally conducted by the all-male or all-female platoon or series 
staffs. Although recruit training is gender segregated, male and female 
platoons may encounter one another in the course of training. 
Scheduling often creates ``concurrent training'' opportunities, such as 
weapons instruction, marksmanship qualification, gas chamber, close 
combat, or combat water survival training. These training opportunities 
expose both male and female recruits to DI's of both sexes in positions 
of authority and establishes them as positive role models.
    Following graduation from recruit training, all non-infantry 
Marines are assigned to Marine Combat Training (MCT), where they are 
organized into ``partially gender integrated'' units. This 
organizational structure consists of a single female platoon in an 
otherwise all male training company. The female platoon level staff has 
four female squad leaders and a male infantry staff noncommissioned 
officer as a platoon commander. The company level staff is a 
combination of male and female officers and staff noncommissioned 
officers. Marines are exposed to a gender integrated chain of command 
and observe professional interaction between male and female leaders.
    Upon graduation from MCT, all Marines report to follow-on Military 
Occupational Specialty (MOS) schools. With the exception of combat arms 
training, all remaining MOS schools are ``fully gender integrated'' 
with no instructor gender restrictions. Young Marines are exposed to 
male and female instructors as coequals and positive role models.
    e. Recommendation. ``Encourage volunteers by improving incentives 
and rewards so that a training assignment is career-enhancing.''
    Comment. The Marine Corps goes to great lengths to not only screen 
and train DI's, but to provide the prestige and incentives that 
maintain the 8511 Drill Instructor MOS as a career-enhancing 
assignment. With a calendar year 1997 average of 94 percent volunteer 
rate for DI duty, incentives include the following: Clothing Issue: (2 
Campaign Covers, 5 shirts, 4 trousers, 3 sets of utilities); 
Proficiency pay: $275.00 per month; Follow-on duty station assignment 
option; DI Ribbon; DI of the Year Award Eligibility; ``Pride and 
recognition'' of being a Marine DI; Meritorious Promotion.
    Promotion statistics confirm that DI duty is career enhancing in 
the Marine Corps. In fiscal year 1997 for example, the promotion rate 
for those NCO's with DI experience in zone was 73 percent, compared to 
a rate of 58 percent for all NCO's in zone.
    f. Recommendation: ``Clarify trainers' authority.''
    Comment. The Marine Corps believes that its DI training program 
clearly defines its ``training philosophy'' and establishes concise 
parameters for ``trainer's authority''.
    (1) The DI School syllabus provides DI's with 158.5 hours of 
Standard Operating Procedures and Leadership instruction, clearly 
delineating the DI's authority and span of control. Further, DI's 
receive 354.5 hours of various General Military Subjects, Physical 
Training, Close Order Drill, Field Training, Instructional Techniques, 
and Core Values, which provides the requisite knowledge and confidence 
required for successfully training recruits.
    (2) The overall responsibilities of recruit trainers are explicitly 
laid out in the Standard Operating Procedures (SOP) order at each 
recruit depot, and Marine Corps Order (MCO) 1510.32B, Recruit Training, 
which states; ``All who are associated with recruit training must 
ensure this vital process is conducted in a professional manner. 
Hazing, maltreatment, abuse of authority, or other illegal alternatives 
to leadership are counterproductive practices and are expressly 
forbidden. Marines in supervisory positions are accountable for their 
actions.'' The above documents are provided to all recruit trainers for 
reinforcement and referral. All recruit trainers and non-DI recruit 
supervisors are tested and recertified annually on SOP policies.
    To preclude abuses of power and authority, all recruit training 
activities are conducted and/or overseen by the Recruit Series Officers 
and Chief Drill Instructors. Supervision of the DI's and other Marines 
involved in training recruits is the responsibility of the recruit 
company and battalion staffs. Additionally, per MCO 1510.32B, Recruit 
Training; ``Each recruit will receive an individual and personal 
interview from an officer at least once during the training cycle. This 
interview will provide the recruit the opportunity to discuss personal 
problems, performance levels, and to voice grievance without fear of 
reprimand or intimidation.'' Further, recruits are provided the right 
to Request Mast with commanders within their chain of command without 
fear of prejudice. The above process allows for institutional 
supervision to deter abuse without undermining the trainers' authority.
    Recruit Surveys are not a normal part of Marine Corps recruit 
training. However, when significant training changes occur, such as the 
Crucible, recruits are surveyed to capture relevant feedback.
    g. Recommendation: ``Increase support-group staffing and enhance 
availability to recruits.''
    Comment. We acknowledge the committee's recommendation to ensure 
support group staffing is appropriate to their task at hand. Support 
group staffs at both depots (Chaplains and Depot Inspectors) are 
adequate to provide the necessary services to recruits. The chaplains 
at both recruit depots are closely involved in every facet of training 
and social events, and are integral members of the recruit training 
process. The bulk of chaplain support at each recruit depot is 
dedicated to recruit training, resulting in all Recruit Training 
Regiment (RTR) chaplain assignments being at full strength and employed 
throughout the recruit training battalions. In excess of 3,000 recruits 
attend weekly religious services at each recruit depot, and an average 
of 600 recruits participate in weekly Protestant and Catholic religious 
programs, to include Religious Lay Reader training and supervision. 
Chaplains are a common sight during various recruit training evolutions 
from physical training to the Crucible. They provide additional support 
to the training staff, the recruits, and they gain an opportunity to 
better understand and participate in the recruit training process. The 
RTR chaplains provide support to both recruits and the permanent 
personnel throughout the training cycle, to include:
    (1) Welcome Aboard Lecture.
    (2) Core Values Instruction: (a) Recruit Training (5 hours); (b) 
Drill Instructor School (4 hours); (c) Senior Drill Instructor Course 
(1 hour); (d) Recruit Training Officer Orientation Course (2 hours).
    (3) Religious Programs/Sacramental Rites.
    (4) Counseling.
    Each Recruit Depot Inspector staff consists of seven Marines 
involved with the oversight of recruit training. The inspector staff 
are manned by the following: Depot Inspector (Colonel); Deputy Depot 
Inspector (Lieutenant Colonel); Chief Inspector (Gunnery Sergeant); 
Battalion Inspectors (One per battalion) (Staff Sergeant--Gunnery 
Sergeant).
    In addition to the oversight of training by company and battalion 
staff, each Recruit Depot Inspector ensures the safe execution of 
training. Additionally, the Depot Inspector enforces ``standards of 
conduct'' through unannounced visits to training events.
    The chain of command provides support for recruits on a daily 
basis. As members of the Armed Forces, recruits are permitted to 
request mast with the commanders within their chain of command. 
Recruits are informed of their right to request mast; with whom they 
can request mast; procedures for requesting mast; that request mast is 
a private communication and the subject matter need not be discussed 
with anyone except the person to whom the request is directed; and that 
recruits availing themselves of the right to request mast may do so 
without fear of prejudice.
3. Basic training requirements
    The purpose of recruit training is simple--to make Marines. The 
young men and women who arrive at the recruit depots to begin that 
process are generally away from home for the first time. They have 
brought with them diverse perceptions of right and wrong; equally 
eclectic is their understanding of permissible behavior. Their 
experiences with authority figures may have been good or bad, proper or 
abusive. In general, they arrive with immature, undeveloped, and 
unfocused thoughts on professionalism and professional conduct. The 
only thing they have in common is their desire to be a Marine. By 
capitalizing on that desire, training transforms these individuals from 
many diverse backgrounds into Marines imbued with a common set of 
values and standards.
    a. Recommendation: ``Separate barracks for male and female 
recruits.''
    Comment. This is Marine Corps policy.
    b. Recommendation: ``At gender-integrated installations, organize 
same-gender platoons, divisions, and flights and continue gender-
integrated training above this unit level.''
    Comment. Marine Corps recruit training is gender-segregated at the 
battalion level.
    c. Recommendation. ``Toughen basic training requirements and 
enforce consistent standards for male and female recruits.''
    Comment. The Marine Corps concurs with the committee's 
recommendation. In fact, on 1 October 1996, recruit training for both 
males and females was increased to 12 weeks. Extending recruit training 
provided DI's additional time to teach, mold, and mentor their 
recruits. It also enabled increased core values training, totaling more 
than 50 hours of instruction and discussion. Most importantly, a 
crystallizing experience was developed that brings together and focuses 
all that a recruit has learned in the previous weeks of boot camp. 
Known as ``The Crucible,'' it is a 54-hour field training exercise that 
presents continuous physical and mental challenges. Designed to 
emphasize the importance of teamwork in overcoming adversity, it truly 
is the defining moment of recruit training.
    Marine Corps gender segregated recruit training takes into 
consideration the differences in physical strength and endurance 
between entry level male and female recruits. The recruit training 
physical conditioning program has two primary objectives--to achieve 
and maintain a peak level of physical fitness and to build confidence 
by having each recruit exceed his or her own expectations. As a result, 
physical fitness standards are adjusted to accomplish both goals given 
the starting level of each gender.
    The remaining standards within the recruit training Program of 
Instruction are identical for both male and female recruits. While 
Marine Corps recruit training is gender segregated, male and female 
recruits execute the same training, and are trained to the same entry 
level standards in marksmanship, close order drill, combat water 
survival training, field training, and general military subjects. The 
recruit training culminating ``Crucible'' event is also conducted in an 
identical fashion for both male and female recruits.
    d. Recommendation: ``Toughen physical fitness requirements and 
expand instruction on nutrition and wellness.''
    Comment. The Marine Corps' physical fitness program has been 
thoroughly examined over the past two years, resulting in tougher 
standards for all recruits and Marines. In September 1996, the Training 
and Education Division (T&E Div), Marine Corps Combat Development 
Command, sponsored a Physical Fitness Conference that brought together 
Marines and a host of experts from the physical fitness conditioning 
and research community, to include the Cooper Institute for Aerobic 
Research, U.S. Sports Academy, Naval Health Research Center, University 
of Dayton's Exercise Physiology Department, and the Sports Training 
Institute of New York. The implementation of tougher physical fitness 
training and testing standards are an outgrowth of this continuing 
interaction and has resulted in the following changes to Marine Corps 
fitness standards: Increasing the female physical fitness training 
(PFT) run from 1.5-miles to 3.0 miles (January 97); Implementing 
``deadhang'' pullups for males (January 97); Increasing the female 
situp requirement to the male standard (January 97); Recruit physical 
fitness training serves two purposes:
    (1) First, it physically develops young men and women to a standard 
that allows them to meet the physical demands of duty with the 
operating forces. This training focuses on improving cardiovascular 
endurance, and muscular strength and flexibility. The Marine Corps PFT 
measures these elements by requiring all Marines to complete a 3.0-mile 
run within prescribed time limits, do sit ups for two minutes and do 
pull ups (males) or flex arm hang (females). Passing the PFT is a 
recruit training graduation requirement.
    (2) Second, physical training develops self confidence. As recruits 
continually surpass their previous physical limits, confidence in their 
own abilities grows, as well as attaining a confidence and respect for 
their fellow recruits, helping to develop camaraderie and esprit.
    All recruit training is physically demanding, but nothing tests a 
recruit's physical condition like the 54-hour ``Crucible'' event in the 
eleventh training week. It is a realistic field exercise that is 
highlighted by food and sleep deprivation and mental and physical 
challenges. Successful completion of the ``Crucible'' is also a 
graduation requirement. We believe that Marine Corps physical fitness 
training is effective in developing the body and the mind of recruits 
and prepares them for the rigors of follow-on test, qualification with 
the service rifle, completion of the combat water survival test, 
mastery of general military subjects (academics), passing ``final 
uniform inspection'', and successful completion of the ``Crucible''. 
Recruits who fail any of these events, given that they display a 
desire/potential for completing training, are generally recycled. 
However, repeated failures are routinely discharged.
    (b) DI's continually evaluate each recruit's potential for 
completion of training, adjustment to military lifestyle and 
application of effort. At anytime during training, any DI has the 
``leeway'' to recommend for separation those recruits who either can 
not, or will not, adjust to the recruit training environment. 
Generally, this trait manifests itself early in the training cycle, 
resulting in early separations.
    Based on the above, the Marine Corps believes that current 
procedures provide adequate ``leeway'' for recruit trainers to identify 
and discharge potential failures early in the training cycle.
    g. Recommendation: ``Eliminate use of ``stress cards'' in the Navy.
    Comment. Not applicable.
4. Teaching professional relationships
    a. Recommendation: ``Improve instruction on how males and females 
should relate to each other professionally; eliminate ``no talk, no 
touch'' policies.''
    Comment. Professional Relationships. The Marine Corps is committed 
to developing positive, professional relationships between Marines of 
both sexes. It is believed that these types of relationships are best 
developed through a rheostat approach to gender integrated training.
    (1) Recruit Training:
    (a) The purpose of recruit training is simple--to make Marines. The 
young men and women who arrive at the recruit depots to begin that 
process are, for the most part, away from home for the first time. In 
general, they arrive with immature, undeveloped and unfocused thoughts 
on professionalism and professional conduct. The only thing they have 
in common is their desire to be a Marine. By capitalizing on that 
desire, recruit training transforms these individuals from many diverse 
backgrounds into Marines imbued with a common set of values and 
standards.
    (b) In the Marine Corps segregated recruit training environment, 
the strong, positive role of the DI provides impressionable young men 
and women appropriate role models without the distracting undercurrent 
of sexual attraction. For women, it also removes the stereotype that 
only men can be authority figures. They see strong female role models 
not only in control of them and their group, but also positively 
interacting with male DI's. As a result, women recruits very early in 
their training cycle come to realize that they can be strong, assertive 
leaders and that they do play an integral part in the success of the 
Corps. In short, gender segregated training provides an environment 
free from latent or overt sexual pressures, thereby enabling new and 
vulnerable recruits the opportunity to focus on and absorb Marine 
standards of behavior.
    (2) Marine Combat Training (MCT). Following graduation from recruit 
training, all non-infantry Marines, both male and female, are sent to 
MCT. Called ``Operation Leatherneck,'' it is a 17 day, scenario-based 
training exercise designed around a unit's notional deployment in an 
overseas contingency operation. Through this realistic and demanding 
field exercise, MCT provides Marines with the weapons and fieldcraft 
skills essential to operate and survive in a combat environment. At 
MCT, both male and female Marines are taught and led by male and female 
Marine Officers and Noncommissioned Officers. Both male and female 
Marines see a gender integrated chain of command function, see 
professional conduct between male and female leaders, experience their 
leadership in tough, night and day field conditions, and see both male 
and female leaders emplace machine guns and lead patrols. In sum, male 
and female Marines will see themselves as members of the same team 
committed to performing the same tough duties in the same dirty, 
mentally and physically demanding environment, and from that experience 
will develop an appreciation of each other as professionals.
    (3) Military Occupational Specialty (MOS) schools. Upon completion 
of MCT, all Marines report to follow-on MOS schools. Here, each Marine 
learns the specific technical skills necessary to effectively function 
as a productive member of an operational unit. These schools vary in 
length from weeks to months in duration. In all cases, they are ``fully 
gender integrated'' in that female and male Marines are now members of 
the same squads--the lowest organizational level. This final step in 
the gender integration process takes place only after Marines of both 
sexes have been provided strong, positive role models, both male and 
female; have had institutional standards of right/wrong and acceptable/
unacceptable behavior established and have shared the common hardship 
of simulated combat operations. At this point, they have gained 
sufficient appreciation for each other and have matured enough 
professionally to be organized into units exactly like those they will 
find in the operational Marine Corps.
    Sexual harassment. The Marine Corps is committed to eliminating 
sexual harassment and embraces the committee's recommendation of 
continually reinforcing sexual harassment training throughout the 
training continuum. At present, sexual harassment training exists at 
each step in the entry level training pipeline:
    (1) At recruit training, approximately 50 hours of instruction are 
devoted to teaching core values and standards of acceptable behavior. 
Specific periods of instruction on both sexual harassment and sexual 
responsibility are provided in both a classroom setting and a guided 
discussion format.
    (2) In Marine Combat Training (MCT), Marines receive six hours of 
core values reinforcement training, which include instruction on sexual 
harassment and sexual awareness.
    (3) At MOS schools, Marines receive one hour per week of additional 
core values reinforcement training. Commanders are provided the 
``Marine Corps Values and Leadership Users' Guide'' which allows 
discussion leaders to teach a wide range of subjects, to include sexual 
harassment.
    b. Recommendation: ``Enforce policies to eradicate disparaging 
references to gender.''
    Comment. The Standard Operating Procedures at the recruit depots 
outline the policy regarding ``standards of conduct.'' All Marines 
charged with the recruit training mission are guided by these 
standards. Hazing, maltreatment, abuse of authority, sexual harassment, 
or other illegal and unprofessional behavior are counterproductive 
practices and strictly forbidden. Marines in supervisory positions are 
charged to treat all recruits firmly, fairly, and with dignity, without 
profanity, vulgarity, or other disparaging reference to any group.
    In order to enforce the above policy, all recruit training 
activities are conducted and/or overseen by the Recruit Series Officers 
and Chief Drill Instructors. Supervision of the Series Officers and 
other Marines involved in training recruits is the responsibility of 
the recruit company and battalion staffs. Additionally, each Recruit 
Depot Inspector enforces standards of conduct through unannounced 
visits of training events.
    The importance of enforcing policies designed to eliminate 
disparaging references to gender will be a topic discussed at the 
annual ``Training and Education Conference'', currently scheduled for 
April 1998.
    c. Recommendation. ``Teach consistent rules on fraternization.''
    Comment. The Committee recommends that the term fraternization be 
used only in reference to service policies on this issue. Concur.
    d. Recommendation. ``Enforce tough punishments for false 
accusations regarding sexual harassment and misconduct.''
    Comment. The tradition and practice of the Marine Corps is to 
strictly enforce good order and discipline. Incidents involving false 
accusations of sexual harassment or misconduct are punishable under the 
Uniform Code of Military Justice, Article 107, Making a False Official 
Statement.
5. Advanced school
    a. Recommendation: ``Strengthen discipline continuum from basic 
training into advanced training in order to maintain high standards of 
discipline and military bearing throughout the training cycle.''
    Comment. The Marine Corps believes that the young men and women who 
graduate from recruit training have made the transformation from 
civilian to Marine. Significant efforts are made at MCT and the MOS 
producing schools to sustain that transformation. The Marine Corps 
discipline continuum from basic to advanced training is embodied in the 
Commandant's ``3 R's:'' Retain the spirit gained in recruit training by 
forming teams of Marines immediately after recruit training, assigning 
those teams to follow-on skill producing schools and subsequent 
assigning them to operational fleet units; Reinforce core values of 
honor, courage, commitment; Realize benefits during awaiting training 
time by utilizing training techniques such as distance learning, 
computer based training, and self paced instruction.
    Sustainment of the ``Transformation'' process begun at recruit 
training is the subject of an annual Training and Education Conference 
sponsored by the Commanding General, Marine Corps Combat Development 
Command. The conference provides a forum for periodic review of the 
entry level training continuum. Currently scheduled for late April 
1998, this year's conference will focus on reducing ``awaiting training 
time'' which is a contributing factor to reduced motivational levels 
and increased discipline problems in the MOS schools in particular.
    The committee noted that a Marine Corps ``advanced school'' curfew 
policy appeared to be not ``widely enforced''. School commanders 
establish local policies, to include curfews, based on many variables, 
including location, school curriculum, and class schedules. Enforcement 
of these policies is the responsibility of all Marines. Failure to do 
so is an abrogation of that responsibility and should be dealt with 
appropriately by the commanding officer. The importance of enforcing 
these policies will be a subject of discussion among all school and 
detachment commanders at the annual ``Training and Education 
Conference'', currently scheduled for April 1998.
    b. Recommendation. ``Prepare basic training graduates better for 
lifestyle changes in advanced school and prepare advanced school 
graduates better for the lifestyle changes in the operational units.''
    Comment. The key to building effective, cohesive gender integrated 
operational units is in creating a training environment that builds 
progressively to that end. The Marine Corps believes it has achieved 
that goal through a process that functions much like a rheostat, moving 
from gender segregation at recruit training, to partial gender 
integration at MCT, and finally to full gender integration at 
applicable MOS schools.
    Rape Awareness. During recruit training, instruction is provided to 
all female recruits (in two 30 minute sessions) that is designed to 
familiarize them with rape prevention, awareness, and risk reduction. 
Additionally, a period of instruction titled, Sexual Responsibility of 
the Marine, is presented to both men and women providing greater sexual 
awareness between the sexes. This period of instruction is being 
expanded to include greater sensitivity to rape awareness.
    Alcohol Abuse. Marine Corps Order P5300.12, The Marine Corps 
Substance Abuse Program states that; ``alcohol abuse is contrary to the 
effective performance of Marines and to the Marine Corps mission, and 
will not be tolerated.'' The Marine Corps objective is to eliminate 
alcohol abuse in its ranks. An essential step in achieving this goal is 
to change the attitude of Marines toward the use of alcohol. This is 
begun in recruit training where recruits receive 4 hours of either 
formal instruction or ``locker-box'' discussions on Substance Abuse. 
During Marine Combat Training, new Marines are provided six hours of 
core values reinforcement instruction that includes, among other 
things, Substance/Alcohol Abuse training. Additionally, Marines 
assigned to their follow-on MOS schools receive up to one hour per week 
of core values instruction that also include discussions on Substance/
Alcohol Abuse.
    c. Recommendation. ``Separate barracks for male and female 
students.''
    Comment. At Marine Corps or other service MOS schools, male and 
female Marines (no longer recruits) may be assigned to gender-
integrated barracks. These living conditions and training environment 
are similar to the living and working conditions Marines will 
eventually find at their permanent duty stations and represent a 
logical and proper transition from recruit to unit lifestyle.
    d. Recommendation. ``Review initial entry training curricula to 
shift more training into IET in order to reduce the training 
requirements of the operational units.''
    Comment. The Marine Corps concurs with the Committee's approach.
    Because of the ``expeditionary nature'' of the Marine Corps, each 
Marine must be prepared to deploy upon reporting to an operational 
unit. This requirement explains why Marine Corps entry level training 
is longer than that of other Services, and why Marine Combat Training 
(MCT), is conducted for all non-infantry Marines (male and female) 
following recruit training. This training, in conjunction with follow-
on MOS training, ensures all Marines are trained and able to fight and 
survive in a combat environment. This front-end training concept 
eliminates the requirement for operational units to conduct entry level 
training and allows them to focus on orienting new Marines to unit 
standard operating procedures.
    In 1996, the Marine Corps began a comprehensive training review 
focusing on core competencies. This review has resulted in a 
reorganization and revision of several entry level training programs:
    (1) In October 1996, recruit training became a 12 week regimen for 
male and female recruits. Extending recruit training provided DI's 
additional mentoring time, increased core values instruction provided 
to recruits, and implemented a ``Crucible'' that is the culmination of 
the recruit training experience.
    (2) In January 1997, MCT was restructured into a 17 day training 
program that greatly improved combat skills instruction for non-
infantry Marines. ``Operation Leatherneck'' as it is called, is a 
comprehensive scenario-based training exercise designed around a unit's 
notional deployment in an overseas contingency operation. MCT provides 
all non-infantry Marines with the weapons and fieldcraft skills 
essential to operating and surviving in a combat environment.
    (3) In October 1997, the Program of Instruction at the Infantry 
Training Battalion, School of Infantry, was redesigned to provide a 
greater focus on weapons proficiency, night combat operations, and 
combat in an urban environment. The end result is that basic infantry 
Marines are better prepared prior to their arrival at operational 
units.
    (4) In February 1998, the review of MOS schools curriculum 
continued with an analysis of the Communications (MOS 2500) 
Occupational Field. Ultimately, all occupational fields will be 
reviewed with the goal of reducing training time and providing a better 
trained Marine to operational commanders.
6. Values training
    a. Recommendation. ``Improve values training in all initial entry 
training programs.''
    Comment. We concur that values training and reinforcement 
throughout the entry level training process is a critical aspect of 
making Marines. On 1 October 1996, the recruit depots implemented 
significant changes to the focus and content that included a 
significant increase in core values training, totaling more than 50 
hours of instruction, scenario-led discussions, and training 
reinforcement critiques.
    The most notable enhancement to recruit training is the addition of 
a ``Crucible'' event that is intended to test the mettle of every 
recruit and mark the culmination of recruit training. As a true rite of 
passage from recruit to Marine, the Crucible is a 54-hour field 
training evolution highlighted by food and sleep deprivation and an 
optempo that poses continuous physical and mental challenges, while 
emphasizing core values and the importance of teamwork in overcoming 
adversity.
7. Training resources
    a. Recommendation. ``Increase training resources to improve 
staffing and infrastructure.''
    Comment. The Marine Corps has made a conscious effort in dedicating 
resources to recruit training. Since fiscal year 1992, our investment 
in recruit training infrastructure and base operating support has grown 
from an annual expenditure of $54,700,000 to our current fiscal year 
1999 President's Budget request of $70,800,000. Our investment in 
direct recruit training has also grown from $196 per recruit annually 
to $247 per recruit during the same respective period. We support the 
committee's interest in recognizing the need for DoD to commit funding 
to training and believe that we have been meeting this objective.
    Air Force Answer. The Air Force has conducted gender-integrated 
training since 1976 and continues to look for ways to improve the 
process. During the past 22 years we have fined tuned our program and 
feel our current training system works well. The Kassebaum-Baker Report 
afforded us an additional opportunity to review our programs and make 
further improvements in the way we train. The end result will be a 
great training program made even better.
    Question. What is your understanding of the Secretary of Defense's 
role in coordinating your recommendations with those of the other 
services?
    Army Answer. I know of no plan for the Secretary of Defense to 
coordinate Army recommendations with the other services.
    Navy Answer. It is my understanding that my recommendations will be 
received, discussed and considered then forwarded by my chain of 
command to the Secretary of the Navy, who will provide recommendations 
on the subject to the Secretary of Defense. I am confident that my 
views will be adequately represented and considered in any policy 
decision on this subject that the Secretary of Defense announces.
    Marine Corps Answer. It is expected that each Service will provide 
input to the Office of Secretary of Defense and that some decisions 
will remain services prerogatives, while others will become DoD policy 
and guidelines.
    Air Force Answer. The Air Force understands OSD's role is to 
evaluate the Services' inputs and ensure training programs meet mission 
needs and provide a safe/secure training environment.

                            Training Issues

    Question. With regard to either basic combat training or advanced 
individual training, what is the ratio of recruits to trainers for your 
service? Do you consider this ratio too high or too low at your 
training facilities?
    Army Answer. The ratio of Drill Sergeants is one for every 17 to 20 
recruits in Basic Combat Training, and one for every 50 recruits in 
Advanced Individual Training. These ratios have remained fairly 
constant since the early 1970's. These are probably about right, but 
Training and Doctrine command is conducting a manpower study to 
validate that these ratios are adequate to ensure trainee supervision.
    Navy Answer. At recruit training, the ratio of recruits to Recruit 
Division Commanders (RDCs) is 84:3. For classroom instructors the ratio 
varies depending on the particular course of instruction; the highest 
ratio is 168:1. The 84:3 ratio is adequate but not optimum. The 
classroom ratio is adequate but pushing close to the limit. In some 
high-risk areas (e.g., water safety instructors) it is a challenge to 
maintain an adequate number of specialists.
    In advanced individual training, the classroom ratio is mostly 25:1 
and is adequate.
    Marine Corps Answer. The Marine Corps student to instructor ratios 
vary throughout the training continuum. This continuum begins with 
recruit training, progresses to Marine Corps Training (MCT), and leads 
to specialized skill training that will enable a Marine to perform in a 
certain Military Occupational Speciality (MOS).
    Average examples of student to instructor ratios:
    Recruit Training: 1 Drill Instructor: 15/20 Recruits.
    Marine Combat Training: 1 Squad Leader/Instructor: 12 Students.
    Military Occupational Specialty (MOS): Vary from 1:1 to 1:18.
    MOS: These ratios vary during the months of June thru September 
when the Marine Corps receives the highest number of recruits (as well 
as its highest quality.)
    Air Force Answer. Air Force Basic Military Training (BMT) ratio of 
recruits to trainers is 80 trainees to 1.5 Military Training 
Instructors (MTIs). At Advanced Training the ratio is 57 trainees for 
every Military Training Leader (MTL). The Air Force completed a study 
of manning at both BMT and Advanced Training and decided to add more 
trainers in both areas. Accordingly, we have added 61 more MTIs at BMT 
and 42 more MTLs at Advanced Training into our fiscal year Program 
Objective Memorandum (POM). We are working to fill these positions as 
soon as possible.
    Question. Do you feel that your drill sergeants and other 
instructors are adequately trained and prepared for this job? What 
selection process are they subjected to?
    Army Answer. Yes. I believe they are trained and prepared to do 
their jobs. However, we have taken a close look at the training to see 
where it could be improved. In January, the Training and Doctrine 
Command (TRADOC) completed its review of the Drill Sergeant (DS) 
Program of Instruction (POI) at the Drill Sergeants Course. As a result 
of this review, TRADOC has revised TRADOC Regulation 350-6 to emphasize 
instructor and trainer relationships with trainees. Thirty-nine hours 
of ethics and values training will be added to the DS POI. Training on 
ethics and values will begin in August once Training Support Packages 
have been received at TRADOC.
    The Army has also initiated additional screening requirements to 
ensure only the highest quality personnel are selected for drill 
sergeant duty. Since August 1997, the following new procedures 
concerning drill sergeant selection have been initiated: mandatory 
commander's recommendation (Lieutenant Colonel or higher), mental 
health evaluation to determine emotional stability, screen of each 
candidate's complete official military personnel file (to include the 
restricted portion), and a check of Military Police and Criminal 
Investigation Division's records. The Army is also conducting a study 
to determine the best way to use additional psychological screening as 
tools in drill sergeant selection.
    Navy Answer. Yes. Instructors are screened by their Commanding 
Officers, in accordance with the guidelines of the Enlisted Transfer 
Manual, to ensure assignment of only the highest quality people to 
successfully and safely train our future leaders. Because Recruit 
Division Commanders (RDCs) attend Instructor Training school before 
attending RDC school, they must meet the screening criteria for both 
instructors and RDCs. RDC candidates are given an additional, 
comprehensive screening that covers even more time and aspects of the 
individual's career and character than the baseline instructor 
interview. The RDC process is also in accordance with the guidelines of 
the Enlisted Transfer Manual.
    Marine Corps Answer. The Marine Corps Drill Instructor (DI) 
epitomizes the title ``Marine.'' The DI's sole responsibility is to 
take American men and women and transform them into Marines, as they 
are both a role model and a mentor to recruits while they are in 
recruit training. To this end, the Marine Corps devotes a great deal of 
time and effort in the screening, selection and training of DI's.
    There is extensive screening of all prospective Marine Corps DI's 
prior to and during their training program. A four-phase screening 
process begins with an initial screening at the Enlisted Assignments 
Branch, HQMC with a thorough review of the Marine's official military 
personnel file. In accordance with MCO 1326.6C, Selecting, Screening, 
and Preparing Enlisted Marines for Drill Instructor, recruiter, and 
Independent Duties, the second and most critical screening is 
undertaken by the Marine's Commanding Officer (CO). It is the CO who 
knows and works with the candidate and truly plays the most important 
role in the screening process because of their personal knowledge of 
the individuals and access to the Marine's service records and 
performance information not readily available to HQMC. The CO's 
screening is designed to assess whether the potential DI has the 
maturity, leadership, and judgment required for making Marines.
    The CO's screening encompasses the following areas:
    A. Education (DI education should equal the majority of recruits).
    B. Disciplinary record.
    C. Medical qualification.
    D. Physical fitness (Required 1st Class Physical Fitness Test 
score).
    E. Height/weight and/or body fat standards.
    F. Financial stability.
    G. Family stability (Not currently enrolled in family advocacy 
programs).
    Following acceptance to DI School, the screening process continues 
throughout the course of instruction by the DI School staff (all former 
DI's). The staff evaluates the students vis-a-vis the Marine Corps' 
Individual Training Standards established for the DI MOS (8511), which 
require evaluation through written and/or performance tests. The staff 
also evaluates the students desire, commitment, integrity, character, 
and core values. Early in the training process, the students complete a 
psychological profile administered by the Mental Health Unit (MHU) 
aboard each recruit depot. The profile is designed to identify 
``potential risk drill instructors.'' The MHU staff screens the results 
and has historically directed 10-15 percent of each class to complete 
additional evaluative testing via the MMPI-1 test, which is a more 
comprehensive psychological testing and screening tool. The MHU staff 
screens the results and interviews students who display specific 
indicators which may pose future problems as a DI. Historically, one to 
two students per year at each DI School fail psychological screening 
and are disenrolled. The final screening is an ongoing evaluation 
process conducted by the RTR throughout the DI's three year tour. The 
process includes performance evaluations after each recruit training 
evolution to ensure only quality Marines are training our recruits.
    As a prerequisite to becoming a DI, an enlisted Marine must 
complete an intense 12-week course. During this period of instruction 
DI students undergo both formal instruction, practical application, and 
written examination, totaling 513 hours of instruction in Standard 
Operating Procedures, Physical Training, Field Skills, Leadership, 
General Military Subjects, Weapons, Instructional Techniques, Close 
Order Drill, and Core Values. In essence, each DI candidate completes 
the recruit training syllabus, resulting in intimate understanding of 
the rigors and stresses an experienced by recruits during training. To 
provide hands-on experience (field work), each student is required to 
``observe'' a recruit platoon in training for up to five days. During 
this period the student is given a limited opportunity to engage in 
training and, most importantly, a chance to interact with recruits. 
Upon completion of DI school, new DI's are assigned to ``veteran'' 
teams which allows for mentoring and the continuing development of 
younger, less experienced DI's.
    The screening, selection, and incentives described above have 
served the Marine Corps well by providing Marines of exceptional 
character and ability to serve as recruit trainers.
    Air Force Answer. Yes. Air Force Military Training Instructors 
(MTIs) and Military Training Leaders (MTLs) are adequately trained for 
their jobs, and the Kassebaum Report noted the Air Force's program as 
the benchmark. MTIs undergo a fourteen week program with heavy emphasis 
on field situations. Training includes three weeks of classroom 
instruction followed by eleven weeks of field work under the 
supervision of an experienced trainer. MTI candidates are instructed, 
tested, and evaluated by a certified MTI Instructor School faculty 
member. After certification, MTIs receive two hours of refresher 
training monthly, an annual refresher briefing on sexual harassment, 
and must certify semi-annually that they understand the Air Force and 
command directives on professional and unprofessional relationships and 
conduct.
    MTLs receive one week of local training on a standardized syllabus 
and attend the first two weeks of the MTI school at Lackland. They also 
receive annual refresher training.
    The Air Force complies with all Kassebaum recommended screening 
actions for both MTIs and MTLs. MTI/MTL duty is voluntary, and all 
applicants are screened to ensure they meet requirements, which clearly 
exceed those required for routine assignments accepted.
    Question. What does it cost to train a new recruit, and what 
percentage of your new recruits fail to complete their first tour of 
duty?
    Army Answer. The average cost to train a new service member is 
$18,308. This includes $5,075 for basic combat training and $13,233 for 
advanced individual training. Fiscal year 1997 attrition showed 34 
percent of new service members fail to complete their first tour of 
duty.
    Navy Answer. Expressed in fiscal year 1997 dollars, the cost to 
train a new recruit is $6,692 for 65 days of training, including 
instructor pay and operations and maintenance costs. Approximately 37 
percent of new recruits fail to complete their first Enlistment.
    Marine Corps Answer. The average cost to train an enlisted Marine 
for his/her first permanent duty station is as follows:

------------------------------------------------------------------------
                                                      Fiscal year--
                                               -------------------------
                                                    1998         1999
------------------------------------------------------------------------
Operation and Maintenance, Marine Corps.......       $1,799       $1,847
Military Personnel, Marine Corps..............       17,910       17,910
Procurement of Ammunition, Navy and Marine            (\1\)        1,246
 Corps........................................
                                               -------------------------
      Total...................................       19,709       21,003
------------------------------------------------------------------------
\1\ Ammunition data prior to fiscal year 1999 does not allow for a
  breakdown of costs down to the individual school. Fiscal year 1999
  costs are only for enlisted entry level MOS producing courses.

    These costs do not include costs budgeted by other armed services 
to train Marines at other service locations.
    Approximately thirty-three percent of Marines fail to complete 
their first tour of duty. A third of this attrition occurs at the 
Marine Corps Recruit Depots.
    The attrition rate for fiscal year 1997 was 13.4 percent for 
recruit training (Male and Female combined). Attrition by months of 
service is as follows:

                              [In percent]
------------------------------------------------------------------------
                                               Month        Cumulative
            Months of service                attrition       attrition
------------------------------------------------------------------------
00 to 06................................            11.5            11.5
07 to 12................................             4.8            16.3
13 to 24................................             6.5            22.8
25 to 36................................             6.3            29.1
37 to 45................................             4.0            33.1
------------------------------------------------------------------------

    Air Force Answer. On average, it costs $27,502 to train a new 
recruit. This includes $12,654 for Basic Military Training (BMT) and 
$14,848 for advanced training. Costs include fixed and variable 
military pay, civilian pay and O&M in fiscal year 1998 dollars. The 
average advanced training course is 10.2 weeks long.
    Approximately 33 percent of new recruits fail to complete their 
first tour of duty. Attrition includes approximately 9 percent in BMT 
and 24 percent post BMT.
    Question. With the force reductions the Department has experienced, 
does your service have a shortage of drill sergeants or instructors?
    Army Answer. We believe we have a sufficient number of drill 
sergeants in the training base. However, manpower shortages in the 
Basic Combat Training, Advanced Individual Training, and One-Station 
Unit Training support structure periodically require training units to 
employ drill sergeants in other than drill sergeant duties for a short 
duration. Training and Doctrine Command policy precludes permanently 
assigning drill sergeants to other than drill sergeant duties, and 
training support taskings are kept to the absolute minimum required for 
mission accomplishment. We are working to minimize the use of drill 
sergeants outside of their training responsibilities by increasing 
Initial Entry Training (IET) support structure authorizations to a 
level commensurate with IET workload. We do experience the same spot 
shortage of instructors as we do with other noncommissioned officers in 
the force.
    Navy Answer. Yes, there is a shortage of instructors at recruit 
training. The instructors at recruit training are currently manned at 
only 64 percent of Budget Authority. Recruit Division Commanders are 
currently manned at 80 percent of BA. The Bureau of Personnel (BUPERS) 
is optimistic that by the end of the summer we will be at 100 percent 
for RDCs. Additionally, we are reviewing several alternates designed to 
increase the number of qualified women RDCs.
    In the advanced individuals training there is not a shortage of 
instructors.
    Marine Corps Answer. The small force reduction in the Marine Corps 
has not resulted in a shortage of Drill Instructors. We continue to 
staff our recruit depots at Parris Island and San Diego with the 
necessary number of Drill Instructors, nearly all of whom are 
volunteers for this prestigious Special Duty Assignment.
    Air Force Answer. We recently reviewed our instructor manning and 
decided to add an additional 61 Military Training Instructors and 42 
Military Training Leaders at Basic Military Training and Advanced 
Training. These positions were added to the fiscal year 2000 Program 
Objective Memorandum (POM). In the past, we have had a sufficient 
number of volunteers to fill these positions. The Air Force maintains a 
strong commitment to keeping instructor positions fully manned.
    Question. What is the estimated cost to implement the 
recommendations in the Kassebaum report?
    Army Answer. The Training and Doctrine Command is currently 
conducting a study to determine the costs to provide separate and 
secure living areas by gender. The study will determine the cost of 
improved lighting in and around the barracks, door alarms, and other 
separate and secure related improvements. This detailed study should be 
completed by the Summer of 1998. The upgrade of latrine facilities to 
improve living conditions in separate and secure living areas by gender 
will cost approximately $6.8 million.
    Navy Answer. The total estimated costs to implement the 
recommendation in the Kassebaum report are not available at this time 
since numerous initiatives are still under review.
    Marine Corps Answer. The Marine Corps presently billets its male 
and female recruits separately. There is no additional funding required 
to implement separate barracks as recommended in the Kassebaum Report. 
We do have included in the outyears of the Five Year Defense Plan 
(FYDP), a request for Military Construction funds to build a new Women 
Marine recruit barracks.
    Air Force Answer. Implementing each recommendation of the Kassebaum 
Report would definitely drive a bill for the services. The Air Force 
has completed a very preliminary review of the costs associated with 
the report; however, we have not accomplished a complete analysis of 
this prospect since we are not recommending adoption of each 
recommendation.
    Complete implementation of the report would require additional 
funding for military construction and personnel as well as additional 
recurring cost associated with personnel and modified procedures.
    Preliminary evaluation indicates that an additional $56.5 million 
(one time cost) would be incurred as well as $5.9 million in annual 
recurring costs. This is not an exhaustive list. Additional funding for 
undetermined manpower and additional operating expenses associated with 
changes to current procedures would be required. We are not able to 
fully determine these costs at this time.

                   Military Operations Other Than War

    Question. Most of the contingency operations which have been 
supported by U.S. forces since the beginning of this decade have not 
involved combat. Such Military Operations Other Than War have placed 
new training requirements on the U.S. armed forces since the rules of 
engagement and the basic objectives of these operations differ from 
combat operations. Has the need to prepare your personnel for Military 
Operations Other Than War altered your readiness training programs?
    Army Answer. All training programs contribute to readiness; 
however, the Army maintains a high degree of readiness by training to 
meet and defeat the most dangerous potential threat to our national 
security--high intensity combat operations. Our preparation to meet 
this threat, combined with our outstanding leader development programs 
provides a safety net that allows us to confidently execute shaping 
missions under varying threat conditions. Our experience is that prior 
to deployment for operations other than war we have time to train up 
for the specific threat. The same is true for the reverse. When the 
warplan calls for a unit to deploy for possible engagement in high-
intensity combat, we believe that with a minimum of time to train up, 
there will be no degradation of those skills needed to win on the 
battlefield. However, we are not complacent. We are continually 
modernizing our training strategies to adjust to changing threat 
conditions. As an example, the role of the Combat Training Center 
experience (the ``crown jewel'' of our training system) will be 
changing. We are looking at expanding their role in training for the 
varied threats we anticipate our soldiers will face in the years ahead. 
This training will not dilute or detract from our warfighting focus, 
but it will place additional emphasis on emerging threats, such as 
urban combat and the greater intermingling of combatants and 
noncombatants on the battlefield.
    Navy Answer. No.
    Marine Corps Answer. While some Military Operations Other Than War 
(MOOTW) specific training is conducted prior to and during deployments, 
this has not altered our readiness training programs. The primary 
training that Marines receive to ensure their readiness for deployment 
covers the full spectrum of conflict. This full spectrum training is 
directly applicable to the operational demands encountered in MOOTW. We 
prepare for MOOTW primarily through rigorous training in the more 
exacting standards required of conventional combat operations. This 
approach ensures that Marine units are cohesive and well disciplined to 
operate in any contingency/crisis environment. This training is 
directly applicable to the operational demands encountered in MOOTW.
    Well trained and disciplined Marines with knowledge of standing 
CJCS rules of engagement (ROE) are the key to dealing with MOOTW 
operations. Current Marine Air Ground Task Forces (MAGTFs) are fully 
prepared to function effectively in ``peacetime engagements'' 
including: Disaster relief/humanitarian assistance; Friendly coalition 
building; Noncombatant emergency evacuation (NEO); Counterdrug 
programs; Arms control/treaty compliance; and Military training teams.
    The strategic, rapid response requirements of Marine operating 
forces, however, argue against their significant long term retention 
ashore for MOOTW. Continued long term involvement in peacekeeping or 
similar operations may degrade combat effectiveness. This may occur 
either through insufficient training opportunities in primary combat 
skills for deployed units.
    Air Force Answer. Military Operations Other Than War have not 
significantly altered our training. Our units train and are prepared to 
respond to the full spectrum of taskings required by the National 
Military Strategy.
    Question. If not, how do you prepare your personnel for the rules 
of engagement in circumstances such as those encountered in Bosnia 
which are fundamentally different from combat?
    Army Answer. The rules of engagement are theater-specific and each 
soldier deploying to Bosnia trains to a standard. It is certified by 
trainers from the 7th Army Training Center, or, if conducted at home or 
mobilization stations, by trainers who have been certified through the 
train-the-trainer program.
    Navy Answer. There has not been a change in the way we train our 
forces prior to deployment. During the course of normal preparations, 
exercises such as COMPUTEX (Composite Unit Training Exercise) and JTFEX 
(Joint Training Force Exercise) stress the procedures, policies, and 
rules of engagement for the expected missions which will be encountered 
during deployment. Additionally, our forces train to secondary missions 
which may be required of them dependent upon unexpected contingencies. 
Rules of engagement for all theaters are carried with our battle force 
units so that we retain the flexibility to move wherever required and 
be ready upon arrival.
    Marine Corps Answer. The primary training that Marines receive in 
preparation for deployments overseas and aboard amphibious ships (MEUs) 
covers the full spectrum of conflict. This training is directly 
applicable to the demands encountered in military operations other than 
war (MOOTW). Well trained and disciplined Marines with knowledge of 
standing CJCS rules of engagement (ROE) are the key to dealing with 
MOOTW operations and any applicable supplemental ROE. Today, Marine Air 
Ground Task Forces (MAGTFs) are fully prepared to function effectively 
in ``peacetime engagements'' to include:
          1. Disaster relief/humanitarian assistance;
          2. Friendly coalition building;
          3. Noncombatant emergency evacuation;
          4. Counterdrug programs;
          5. Arms control/treaty compliance;
          6. Military training teams.
    Our maritime nature and multi-dimensional capabilities make Marines 
uniquely suited for MOOTW contingencies. While deployed, many of the 
exercises that Marines conduct are structured around peacekeeping 
scenarios.
    Air Force Answer. Specific training on rules of engagement is added 
to the normal training requirements prior to deployment and is 
constantly reviewed in the theater of operations.
    Question. If so, what effect has this change had on the readiness 
of your personnel to accomplish their wartime missions?
    Army Answer. Contingency and peace operations sometimes enhance or 
degrade a unit's combat readiness, depending upon the type of unit and 
the nature and duration of the mission. Combat Service Support (CSS) 
units, such as medical and transportation units, are the least likely 
to suffer degraded readiness due to participation in peace operations, 
since their wartime mission is usually very similar, if not identical, 
to their peace operation mission. Combat (CBT) and combat support (CS) 
units, such as infantry and signal units respectively, are prone to 
lose warfighting readiness more rapidly during peace operations. This 
is to be expected since CBT and CS wartime missions are dramatically 
different from peace operations.
    Additionally, there is a readiness bill associated with all small 
scale contingency deployments. When we deploy an Army unit to a 
potentially hostile environment where its performance could 
dramatically affect national policy and prestige, that unit is provided 
all of the training, personnel, and equipment resources needed to 
maximize its chances of success. It is brought to the highest standard 
of readiness which time and resources allow. The bill payers are the 
non-deploying units. This readiness bill is the price we pay for 
accomplishing our Nation's policy of shaping the international security 
environment in ways favorable to U.S. interests.
    Marine Corps Answer. Well trained and disciplined Marines with 
knowledge of standing CJCS rules of engagement (ROE) are the key to 
dealing with MOOTW operations and any applicable supplemental ROE. 
Today, Marine Air Ground Task Forces (MAGTFs) are fully prepared to 
function effectively in ``peacetime engagements'' to include:
          1. ROE training;
          2. Disaster relief/humanitarian assistance;
          3. Friendly coalition building;
          4. Noncombatant emergency evacuation;
          5. Counterdrug programs;
          6. Arms control/treaty compliance;
          7. Military training teams;
          8. Civil disturbance;
          9. Battle staff planning for MOOTW.
    Our maritime nature and multi-dimensional capabilities make Marines 
uniquely suited for MOOTW contingencies. While deployed, many of the 
exercises that Marines conduct are structured around peacekeeping 
scenarios. While some Military Operations Other Than War (MOOTW) 
specific training is conducted prior to and during deployments, this 
has not altered our training programs.

             Bosnia and Southwest Asia Supplemental Request

    Question. Gentlemen, as you know, the Department recently sent a $2 
billion fiscal year 1998 supplemental request to Congress to cover the 
costs of ongoing operations for Bosnia and Southwest Asia. In your 
opinion, do you feel we can continue to sustain the U.S commitments 
around the world given the continuous deployments to the Persian Gulf 
and now the extended deployments to Bosnia?
    Army Answer. If we are provided the resources to perform these 
missions and we take care of our soldiers and families at home station, 
we can sustain these missions.
    Navy Answer. Yes. The Navy is supporting these commitments with 
regularly scheduled forward-deploying forces. In the short term, this 
will not affect readiness. However, unfunded contingencies result in 
funds being diverted from non-deployed forces. This negatively impacts 
the balance of current readiness across the force by delaying equipment 
repairs and disrupting training. In the long term, these commitments 
can be maintained but will present the Navy with some challenges. If 
two carriers remain a requirement in the Gulf, a condensed Inter-
Deployment Training Cycle (IDTC) will be required and some work, 
scheduled to be accomplished during upcoming ship and aircraft 
maintenance availabilities, will be deferred.
    Marine Corps Answer. The Marine Corps can continue to sustain its 
requirements to commitments around the world, even when considering the 
ongoing deployments to Bosnia and Southwest Asia. Most contingency 
response requirements are absorbed by the forward deployed units of our 
regularly scheduled rotational forces. While most of the costs 
associated with these deployments are already budgeted, there are some 
additional expenditures which must be reimbursed. Our supplemental 
funding request includes a small amount of incremental funding to 
support costs associated with operations in Bosnia ($2.5 million) and 
Southwest Asia ($9.4 million), as well as $30.8 million to cover storm 
damages.
    It is critical that these costs be reimbursed; otherwise, they will 
have to be absorbed by a combination of operating forces support (i.e., 
reductions to training and equipment maintenance), and the already 
underfunded area of base and station support. The Marine Corps is 
currently ready to meet the taskings of the National Command Authority 
and will remain so as long as possible; funding current readiness first 
and foremost, to the detriment of other areas.
    Air Force Answer. The Air Force is able to fulfill its mission 
taskings. However, several aircraft weapons systems will exceed the Air 
Force desired TEMPO rates. By June 1, 1998, 13 of 27 flying Air Force 
units deployed in support of Operation SOUTHERN WATCH would have an 
average TDY rate for the entire squadron of greater than 120 days. The 
combined effects of contingencies with the need to do exercises, 
inspections, and training back at home to maintain combat readiness, 
are stressing our people--the backbone of Air Force readiness.
    Question. The Service Chiefs have provided the Congress with 
letters detailing some of the impacts to training and near term 
readiness if the Supplemental request is not approved in a timely 
fashion, or if the Supplemental has to be offset within the Department. 
Can you provide us with some specific examples of impacts to the 
enlisted forces if combat training, home station training, depot level 
maintenance, and other quality of life funds are not restored?
    Army Answer. Ground operating tempo (OPTEMPO) must be funded to 
achieve Land Forces Training Readiness objectives at the T1/T2 level in 
order to accomplish the roles and missions assigned in the National 
Defense Policy. The fiscal year 1998 budget is already down 
$220,000,000 from the President's Budget for fiscal year 1998. To delay 
a precipitous fall in readiness and maintain T-1/T-2, funding 
programmed for other necessities would have to be redirected to 
OPTEMPO. Non-essential services will have to be severely curtailed in 
order to maintain funding for training readiness.
    Our Major Commands (MACOMs) expect that they will have to take one 
or more of the following actions: delay needed upgrades of dining 
facilities; deferring Year 2000 fixes; defer purchases of spare parts; 
defer force protection upgrades; limit real property maintenance to 
emergency repairs only; and defer the Hazardous Materials disposal 
program. As in the past, the MACOMs also project that they may have to 
limit the availability of morale and welfare opportunities for soldiers 
and their families. In short, we would have to trade off the quality of 
life for our soldiers and their families.
    Navy Answer. If the Department is required to absorb the cost of 
contingency operations within the Department of the Navy topline, the 
Department would defer approximately 13 ship depot maintenance 
availabilities, 3,300 military personnel Permanent Change of Station 
(PCS) moves, and delay 700 Selective Reenlistment Bonus (SRB) 
contracts. By deferring these requirements, it means our Sailors will 
have to work harder and longer in a condensed period of time to ensure 
they are ready to deploy. Such actions negatively impact the quality of 
life of our Sailors.
    Marine Corps Answer. If the contingency and storm damage amounts 
requested by the emergency supplemental bill are not restored, the 
following represent some of the projected impacts on the Marine Corps 
as the $42.7 million cost is absorbed:
    Delays in equipment maintenance and refurbishment.
    Cancellation of 2 of 10 of this fiscal year's Combined Arms 
Exercises (CAXs), the major training evolution within the Marine Corps.
    A 23 percent reduction in MEU(SOC) training.
    Cancellation of F/A-18 hangar repairs at Miramar Marine Air Station 
in California due to ``El Nino'' storm damage.
    Cessation of bridge repairs at Camp Pendleton, California due to 
``El Nino'' storm damage.
    4 storm damaged messhalls at Camp Pendleton will remain closed due 
to ``El Nino'' storm damage.
    Air Force Answer. If the Supplemental request is not approved in a 
timely fashion, or if the Air Force is required to offset it 
internally, there will be a direct and immediate impact on training and 
near term readiness which will effect both the enlisted and officer 
corps. Specifically, we will be forced to defer programmed depot 
maintenance, terminate non-contingency aircrew training, postpone 
quality of life initiatives, terminate various real property 
maintenance contracts, and begin civilian furlough actions. The impacts 
of such actions would include grounding of aircraft through the end of 
the fiscal year, deferral of programmed aircraft modifications, a rapid 
decline in proficiency and readiness, loss of special combat 
capabilities, increased risks to health and safety, and a reduction in 
quality of life across the board.
    Question. Explain how units, who are not deploying to Bosnia, the 
Persian Gulf, or other operations, have been affected by the shortage 
of funds.
    Army Answer. In executing the National Military Strategy, the 
``shaping and preparing'' pillars are funded in the President's budget, 
but actual operations, such as Bosnia and Southwest Asia are not funded 
in advance, but often rely Congressional action. Therefore, commanders 
are forced to migrate funds from on training accounts to pay for 
contingency costs as they occur until Congress provides supplemental 
funding. Consequently, training for non-deploying units differs, 
Additionally, there is a readiness bill associated with all small scale 
contingency deployments. When we deploy an Army unit to potentially 
hostile environment where its performance could dramatically affect 
national policy and prestige, that unit is provided all of the 
training, personnel, and equipment resources needed to maximize its 
changes of success. It is brought to the highest standard of readiness 
which time and resources allow. The bill payers are the non-deployers 
units. Further, individual soldiers and equipment items from non-
deploying units are often provided as augmentations to deploying units 
in order to tailor the deploying unit for a specific non-combat, 
contingency mission. This readiness bill is the price we pay for 
accomplishing our Nation's policy of shaping the international security 
environment in ways favorable to U.S. interests within a constrained 
budget.
    Navy Answer. As a result of unfunded contingencies, funds have been 
diverted from non-deployed forces. This leads to readiness degradation 
among these units. Specifically, it hampers non-deployed units from 
ordering the necessary parts and performing the essential repairs 
needed to improve the material condition of our ships and planes 
between deployments and during training work-ups. Consequently our 
Sailors have to work harder and longer in a condensed period of time to 
ensure they are ready to deploy. Such actions negatively impact the 
quality of life of our Sailors
    Marine Corps Answer. The Marine Corps answers most crisis response 
deployments with our regularly scheduled rotational forces. While most 
of the costs associated with these deployments are already bought and 
paid for, there are a few additional expenditures which must be 
reimbursed. Since the Marine Corps funds current readiness first and 
foremost, to the detriment of other areas such as quality of life 
(QOL), modernization, base maintenance and even the training funds of 
units not yet deployed, we may see a degradation in the readiness of 
those units who remain at home. Fiscal priority is given to those units 
forward deployed or preparing to deploy. This is a normal part of 
cyclical Marine readiness based on deploying unit life cycles.
    In the last two years, the Marine Corps has seen the readiness of 
those units remaining in the rear slowly degrading farther than what we 
have previously experienced. While these degradations are not yet major 
insurmountable shortcomings, they are a sign of eroding readiness. Most 
of the degradation is due to our greatest potential readiness problem, 
our aging equipment.
    As equipment continues to age, it requires more maintenance-greater 
costs to maintain and repair and greater personnel demands in order to 
keep it in an acceptable state of readiness. The best solution for this 
aging equipment is modernization. Retooling spare parts assembly lines 
is too slow and too expensive, and only serves to treat the symptoms of 
the aging equipment problem. The real solution of this eroding 
readiness is through modernization of the force. By improving force 
modernization, we can potentially save millions of dollars in repairs, 
maintenance and spare parts costs, as well as preserving the well-being 
of our greatest asset--our Marines.
    At present, the readiness ratings of our non-forward deployed units 
remains just barely acceptable. We are able to fund spare parts costs 
and keep our squadrons flying and our infantry battalions ready to 
fight. Without the requested emergency supplemental funding, current 
readiness will be maintained, but somewhat at the expense of our forces 
in the rear. Lack of the supplemental funding will serve to further 
exacerbate the readiness degradation that must be born by our non-
forward deployed forces in terms of equipment maintenance, training, 
and support of our bases and stations.
    Air Force Answer. The current ongoing deployments to Bosnia and the 
Persian Gulf have not inhibited our overall ability to support the 
National Military Strategy of the United States. Those units remaining 
stateside are still capable of successfully performing their assigned 
missions. However, without timely passage of the Supplemental request, 
these units will experience impacts in a wide range of areas, including 
required proficiency training and base support activities. Funding to 
support direct readiness requirements, including spare parts, remains a 
top priority at all levels of the Air Force. If the Supplemental 
request is not approved in a timely fashion, the Air Force will be 
required to offset it internally, with resultant impacts on non-
deployed units. Specifically, we will be forced to defer programmed 
depot maintenance, terminate non-contingency aircrew training, postpone 
quality of life initiatives, terminate various real property 
maintenance contracts, and begin civilian furlough actions. The impacts 
of such actions would include grounding of aircraft through the end of 
the fiscal year, deferral of programmed aircraft modifications, a rapid 
decline in proficiency and readiness, loss of special combat 
capabilities, increased risks to health and safety, and a reduction in 
quality of life across the board.

                          Defense Commissaries

    Question. The fiscal year 1999 budget request ``divests'' the 
Commissary subsidy. The funding for the Commissary subsidy which was 
found in Title V, ``Revolving and Management Funds'', and which was 
provided to the Defense Commissary Agency (DeCA) will now be 
appropriated directly to the military Services. In addition, a 
Commissary oversight board, similar in nature to the Army/Air Force 
Exchange System (AAFES) board, will be created to review and oversee 
implementation of recommended operational changes to the Commissaries.
    Gentlemen, the Committee has heard numerous witnesses testify that 
the Commissary benefit is one of the preeminent quality of life factors 
for military personnel. Please explain to the Committee how the revised 
management and funding of commissary operations preserves, or improves 
this benefit?
    Army Answer. On October 1, 1998, commissary store-related 
appropriated fund resources will be transferred from the Defense 
Commissary Agency to the services to align resource responsibility with 
the organizations that control demands on the commissary system. These 
actions will maintain the commissary benefit by providing a financial 
and management structure better able to support resource tradeoffs, 
capital development decisions, and long range planning responsive to 
military personnel and their families. This will be accomplished 
through a strong operating board and with service representation and 
authority to issue directives. This should enhance individual service 
involvement with commissary operations. I remain anxious and will watch 
closely to ensure that this does continue to ensure the soldiers and 
their families the benefit they deserve. This does have some impact on 
soldiers' decisions as they view these types of initiatives against the 
already perceived erosion of benefits.
    Navy Answer. I do not expect that these changes will significantly 
change the delivery of the commissary benefit. The revised management 
and funding of the Commissary should be transparent to the commissary's 
customers. However, preservation of the benefit depends upon the 
Services' commitment to fully fund the Commissary in future years.
    Marine Corps Answer. These management actions will preserve the 
commissary benefit by providing a financial and management structure 
better able to support resource trade-offs, capital development 
decisions, and long range planning that is most responsive to military 
personnel and their families. Devolving day-to-day supervision of 
commissaries to the Secretaries of the Military Departments under the 
leadership of an effective Board of Directors with membership from all 
services will, in the long run, provide better and more responsive 
service for service members and their families.
    Air Force Answer. Under the proposal advanced by the Services, 
commissary operations would be governed by a directive Board composed 
of military service representative. The Services have been the most 
vocal defenders of the commissary benefit in recent years, and have 
repeatedly intervened at high levels to prevent degradation of the 
benefit, reduced levels of service, and increased costs for commissary 
patrons. Providing operational control, along with the budget, will 
place the commissary in a closer and more responsive position to the 
military services and may protect the commissary budget from being such 
an attractive target.
    Question. How do you anticipate that the management of the 
Commissaries will change under the new structure?
    Army Answer. Under the new management structure, the services agree 
that the day-to-day operation of the commissaries will be administered 
under the direction of the Commissary Board of Directors (CBOD). The 
Board will exercise full authority over commissary operations, be 
accountable to the service Secretaries and Chiefs, and be supported by 
committees for technical expertise in such areas as customer service 
standards, finance, and audit. Also, the Commissary Director will 
report to the Chairman of the Board of Directors and, through the 
Board, will be accountable to the service Secretaries and the Chiefs.
    Navy Answer. Within DeCA, particularly at the store level, I don't 
believe we will see any significant changes in management. However, 
outside of DeCA, the new operating board will give the Services greater 
involvement in decisions that impact management of commissary 
operations.
    Marine Corps Answer. The underlying principle of the Defense Reform 
Initiative is to refocus the Office of the Secretary of Defense (OSD) 
on corporate-level tasks and the oversight (as opposed to day-to-day 
management) of its operating components. The Defense Reform Initiative 
Report noted that operating the commissaries does not require close 
day-to-day supervision from an OSD staff official. Therefore, the day-
to-day supervision of the Defense Commissary Agency (DeCA) will be 
devolved to the Secretaries of the Military Departments, who will 
exercise oversight as a corporate body. The Under Secretary of Defense 
for Personnel and Readiness (USD (P&R)) will continue to provide broad 
policy oversight. However, the day-to-day operation of the commissaries 
will be administered under the direction of the Commissary Board of 
Directors (CBOD). The Board will exercise full authority over 
commissary operations, be accountable to the Secretaries and Service 
Chiefs, and be supported by committees for technical expertise in such 
areas as customer service standards, finance, and audit. The Commissary 
Board will oversee the DeCA Director.
    Air Force Answer. One of the basic principles behind the Defense 
Reform Initiative was that OSD should get out of the business of 
managing things, and instead concentrate on broad policy. Consistent 
with the principle, the proposal advanced by the Services would leave 
broad policy oversight at OSD, but would transfer operational control 
and supervision of day-to-day operations to the Services. This would 
give the Services a far greater role in management and oversight than 
they enjoy today.
    Question. What will be the role of the Defense Commissary Agency 
(DeCA) under the new Commissary management system?
    Army Answer. DeCA will carry out the day-to-day operations of 
commissaries. DeCA will also develop annual financial plans and goals 
for the Commissary Agency, commissary system, and all related funds and 
investments, and will forward them to the Commissary Board of Directors 
for approval. Finally, DeCA will ensure that standard commissary 
operational procedures and consistent delivery of the commissary 
benefit across the Services is maintained.
    Navy Answer. DeCA will still be responsible for running the 
Commissary system and will continue to perform all of the business 
disciplines necessary for day-to-day delivery of the Commissary 
benefit.
    Marine Corps Answer. DeCA will continue to manage the Commissaries 
as they do today. The two major changes relate to whom the Director 
reports to and how funding is provided. As stated above, the DeCA 
Director will report to the Chairman of the Board of Directors vice USD 
(P&R) and, through the Board, will be accountable to the Secretaries of 
the Military Departments and the Service Chiefs for the running of the 
Commissaries. Funding for DeCA will now come from the services, vice 
being provided directly to DeCA by OSD as it has been in the past.
    Air Force Answer. Under the proposal advanced by the Services, the 
Defense Commissary Agency (DeCA) would continue to operate the 
commissary stores. The difference is that DeCA would function under the 
operational control of a directive board composed of military Service 
representatives, rather than the OSD staff. The Board would set and 
enforce standards for customer service and operational performance. In 
the past, the Services have functioned merely in an advisory capacity.

                         Privatization Program

    Question. The Department of Defense (DoD) has an aggressive 
privatization program designed to contract out numerous base support 
and administrative functions. DoD claims that a significant portion of 
the end strength reductions specified in the Defense Reform Initiative 
will be achieved through privatization of functions currently performed 
in-house by DoD. DoD also claims that outsourcing will result in cost 
reductions of about 20 percent.
    How important is the accelerated privatization initiative to your 
efforts to improve the ratio of DoD ``tooth to tail?''
    Army Answer. The primary objective of Army's Competitive Sourcing 
Program--which consists mainly of cost competition studies conducted in 
accordance with Office of Management and Budget Circular A-76, 
Performance of Commercial Activities--is to achieve efficiency in the 
performance of the Army's commercial activities. We achieve these 
efficiencies whether the cost competition determines that it is more 
economical to convert the activity to performance by contract or by the 
streamlined in-house Most Efficient Organization. While the primary use 
of the savings that result from these efficiencies will be to fund 
critical Army modernization requirements, the improvement of the Army's 
``tooth to tail'' ratio will be another benefit.
    Navy Answer. Maintaining our momentum in the competition program is 
essential to our efforts to improve the ratio of DoD ``tooth to tail''. 
The Navy's Future Years Defense Program reflects net savings through 
competition of approximating $2.7 billion through fiscal year 2003, 
with annual savings in fiscal year 2003 approximating $1.2 billion, 
that have been reapplied within our budget request toward 
recapitalization and modernization of our force structure.
    Marine Corps Answer. The Marine Corps has assumed savings of $110 
million per year by fiscal year 2004, gained through the competitive 
sourcing program. These savings have already been reprogrammed for 
procurement modernization part of the ``tooth''.
    Air Force Answer. The Air Force is not using outsourcing or 
privatization as a means to improve our ``tooth to tail'' ratio. 
However, since all of the positions being considered for outsourcing or 
privatization are ``tail,'' the Air Force will realize a slight 
increase in our ``tooth to tail'' ratio.
    Question. Can increased privatization of support functions meet DoD 
goals for reducing the cost of infrastructure? Can the savings from 
privatization obviate the need for additional rounds of base closings?
    Army Answer. The Army Competitive Sourcing Program alone cannot 
meet DoD goals for reducing the cost of infrastructure. In particular, 
the savings needed from additional rounds of base closing are crucial 
to meeting those goals. In some cases, we are already on the edge. We 
have made substantial savings through efficiencies, and must find more. 
We must be very vigilant to ensure that we are not forced to cut 
soldier and family support activities.
    Navy Answer. This program is relatively new, and in the absence of 
hard data it is not possible to state categorically that our goals for 
reducing the cost of infrastructure will be met. The Navy's emphasis, 
however, is on competition, not on outsourcing and privatization per 
se, and we expect real savings regardless of the outcome of the 
competitions--either a new more cost effective in-house organization or 
a contract. Recent studies have identified nearly $4 billion annually 
that might be performed more economically but the private sector or 
more efficiently in-house after they have been competed. The savings 
from competition will be applied toward recapitalization and 
modernization of our force structure, but will not solve the problem of 
excess capacity and will not obviate the need for additional rounds of 
base closings.
    Marine Corps Answer. Base closings are related to changing mission 
requirements. For whatever infrastructure is required to support 
readiness, we will use privatization as one technique for achieving the 
most cost effective base support functions. I do not believe it will 
obviate the need for an additional BRAC.
    Air Force Answer. Privatization does not answer the basic issue of 
reducing excess bases for our given force structure. This can only be 
addressed through the BRAC process. Privatization only provides a 
mechanism to recapitalize our existing aging infrastructure. The Air 
Force has not programmed any dollar savings for privatization because 
the focus of our current privatization efforts (housing and utilities) 
is cost avoidance rather than savings.
    Question. What are the limits of privatization? Are your efforts 
limited by the need to maintain a rotation base? Does the need to 
maintain certain skills among military or civilian personnel limit your 
ability to privatize functions?
    Army Answer. There are legal prohibitions on outsourcing such 
functions as firefighters and security guards. Other than that, there 
are very few limits on Army commercial activities that can be competed. 
Rotation base limits on competition are minimal because the Army has so 
few overseas military positions for which rotation base positions have 
to be preserved. Similarly, there are very few limits on competition 
based on maintaining skills.
    Navy Answer. Privatization of manpower is limited both by 
legislation and by the application of Navy policy on sea-shore rotation 
and homebasing goals/minimums. Our policy provides a structured check 
and balance system between military manpower requirements and proposed 
shore infrastructure reductions for regionalization, outsourcing or 
privatization initiatives to ensure that our military readiness is not 
adversely affected. The need to maintain a sea-to-shore rotational 
base, along with the need to maintain certain critical skills, has 
indeed limited our ability to compete certain military-intensive 
functions. For this reason, the Navy's plan to achieve the savings 
reflected in this budget focuses on competing civilian-intensive 
functions.
    Marine Corps Answer. Privatization is limited by the willingness of 
a commercial vendor to provide a bid. Rotation is not a compelling 
limitation faced by the Marine Corps. The need to maintain certain 
skills among military or civilian personnel may limit the ability of 
the Marine Corps to completely privatize functions.
    Air Force Answer. Our privatization efforts are limited by public 
law and DoD workforce policies concerning functions that are considered 
military essential or inherently governmental. The need to maintain a 
rotation base was a requirement when considering positions for 
outsourcing. It limited our ability to outsource some functions. The 
requirement to maintain certain skills among military or civilian 
personnel also limited our ability to outsource some functions.
    Question. Please comment on the perceptions of the troops about 
privatization and outsourcing. Do the soldiers, sailors, marines and 
airmen perceive this initiative as a threat to establishing a career in 
the military? Is this initiative negatively impacting retention?
    Army Answer. Because fewer than 600 of the approximately 15,000 
positions that the Army is currently competing are military positions, 
very few soldiers are currently affected by competitive sourcing. 
Soldiers that are affected will be reassigned to other positions. 
Moreover, because only about 8,000 of the 56,000 positions that the 
Army plans to compete by fiscal year 2003 are military positions, a 
very small percentage of soldiers will be affected. Consequently, the 
prospect that soldiers perceive the Army Competitive Sourcing 
initiative as a threat to establishing a career in the military or that 
this initiative will have a negative impact on retention is very 
unlikely. They do not see this as a threat to their stability, benefits 
package, or quality of life.
    Navy Answer. We have not formally gathered any information about 
the perception of the troops about privatization and outsourcing or 
impacts on retention. Despite ensuring that sea/shore rotation, 
homebasing and career progression are all safeguarded in the 
competition process, the perceptions concerning privatization and 
outsourcing are not positive. The general perception is that the 
concern of civilian contractors for the well-being of Sailors will not 
be as great as those in the Navy and that the Navy loses flexibility 
when contracts are let.
    Marine Corps Answer. The Marine Corps competitive sourcing and 
privatization programs are found in base commercial activities. While 
some Marines who work in base commercial activities may be affected, 
the majority will not. This is particularly true of those associated 
with operating forces.
    Air Force Answer. There is a certain amount of apprehension about 
the outsourcing and privatization (O&P) process, particularly with the 
associated personnel reductions. We are continuing our efforts to 
determine the effect of several factors influencing retention, 
including O&P, private sector economy, and high tempo.
    We have worked hard to educate our airmen and officers about 
outsourcing and privatization, and will continue to do so. The Air 
Force Chief to Staff, General Ryan, has recently published a 
Commander's NOTAM (Notice to Airmen, an internal Air Force information 
publication available to all Air Force members) on this issue. He 
explains why O&P is necessary, how it will contribute to greater 
efficiency and ultimately to increased combat capability for the Air 
Force and what it could mean to specific career fields. General Ryan 
says that we will make every effort to keep those members who want to 
stay in the Air Force even if some may have to change career fields or 
location. This information helps to educate Air Force people, and 
reduce the confusion and uncertainty they feel as O&P approaches.

                              Medical Care

    Question. The Military Health Services System (MHSS) is changing 
from a fee-for-service health care program (CHAMPUS) to a managed care 
system called TRICARE. TRICARE is now being provided in most of the 
regions of the country. This transaction has caused some anxiety and 
confusion among beneficiaries.
    How satisfied are you with the medical care of the services? Do the 
troops like TRICARE?
    Army Answer. I worry about TRICARE. I am heartened in that now the 
medical community has acknowledged that there are problems associated 
with TRICARE. I believe that when we are up front about it, problems 
get fixed. However, we are not there yet. Several initiatives are 
working: TRICARE remote for the thousands of soldiers and 
noncommissioned officers who are not stationed on a military 
installation; bundling of co-payments so that every referral does not 
lead to another co-pay; reimbursements of claims in a timely manner; 
and adherence to access standards to name a few. We haven't fixed these 
and our soldiers deserve a medical care plan that cares for them and 
their families and follows them for the rest of their life. I am 
satisfied that these issues will be fixed. Soldiers just ask me why 
they were not already fixed. Soldiers do have concerns and want to 
ensure health care does not erode.
    Other comments I receive is that the program is difficult to 
understand. Troops need and want a very simple, step-by-step 
introduction to TRICARE as a part of their in-processing brief. Some 
facilities have taken the lead in this regard. Their marketing is 
simple and has taken the form of a TRICARE card that has all the steps 
for them to take in the event of accident or injury to them or their 
family members with relevant phone numbers for the various steps in the 
process.
    Navy Answer. I'm extremely pleased with the innovative methods the 
men and women of Navy Medicine are developing to keep our Sailors and 
Marines healthy fit and on the job. ``Taking Healthcare to the 
Deckplates;'' and, ``Moving Information, Not People;'' are two of the 
Navy Surgeon General's four goals which have greatly improved customer 
service to our people throughout the world. Taking healthcare to the 
deckplates means taking care of Sailors and Marines as close to their 
units as possible so they can stay on the job. It means providing care 
in mobile vans at pierside, in aviation squadrons, at base gyms, in 
barracks and in the operational environment. Navy Medicine is also 
using technology to move information, not people. Instead of moving 
Sailors and Marines closer to specialized care, our medical people are 
using pre-existing technology to bring health care closer to them. 
Today, telemedicine has become an alternative to MEDEVAC flights, not 
only saving time and money, but providing advance and specialized 
healthcare to our people serving on ships and in remote locations.
    TRICARE is a drastic change in the way health care services have 
traditionally been provided to our people and, as with any change, can 
be unsettling. Implementation of TRICARE has been fully completed, 
however the medical personnel of all three services are working 
together to address the concerns of our customers. Despite the expected 
difficulties in seeing through such a major undertaking, the initial 
statistics are promising. Enrollment in TRICARE has been greater than 
original estimates and the disenrollment rate is less than one percent.
    Marine Corps Answer. TRICARE is a profound and fundamental change 
in the way we provide health care services and as with any change it is 
unsettling for some of our troops. The Under Secretary of the Navy has 
appointed a task force to develop strategies for simplifying TRICARE 
and improving understanding. The Bureau of Medicine is committed to 
working to resolve problems. A TRICARE customer advocacy program 
demonstration was implemented in mid-1997. As service members become 
more familiar with TRICARE and some of its complexities are addressed, 
we believe TRICARE will be well-received.
    Air Force Answer. I am confident that the quality of Air Force 
medical care is second to none. Unfortunately, the transition to 
TRICARE is causing concern and confusion among active duty members. Air 
Force Quality of Life survey results attest to this showing only 44 
percent of the enlisted and 53 percent of the officers expressed 
satisfaction with medical care for both themselves and their families. 
However, these numbers differ significantly from DoD Health Care 
Satisfaction Surveys, which show significantly higher satisfaction 
rates among active duty members who have actually used the TRICARE 
system (74 percent of enlisted and 89 percent of officers). The Quality 
of Life survey went to active duty personnel around the globe, even 
though TRICARE has not yet been implemented worldwide. More meaningful 
results will be generated once TRICARE has been in place worldwide for 
one to two years.
    Question. Do you get many complaints from the troops about medical 
care?
    Army Answer. Yes sir, for all the reasons listed previously. In 
addition to comments about difficulty some soldiers have in 
understanding the complexities of the TRICARE Program, one of the most 
frequent problems I hear involves payment of Active duty health care 
claims for soldiers who live away from Military Medical Treatment 
Facilities. These soldiers and their families are required to obtain 
the majority of their health care from civilian sources and there have 
been problems in the timely processing of the Active duty claims. 
However, recent changes to Active duty claims processing procedures 
should improve the timeliness of claims processing. Beginning this 
spring through late summer all Active duty health care claims will be 
processed by the TRICARE Managed Care Support Contractors. The 
contractor's goal will be to process and pay 95 percent of all Active 
duty claims within 21 days. This initiative will positively impact 
quality of life for our remotely stationed soldiers and will improve 
relations with providers and health care provider network stability.
    The Department of Defense is also planning to proliferate the 
TRICARE Prime Remote program throughout the Continental United States 
in the near future. This program is designed to provide the same 
TRICARE Prime benefit that military treatment facilities (MTF) Prime 
enrolled soldiers enjoy. The only difference is that soldiers enrolled 
in the TRICARE Prime Remote program will obtain their primary, and most 
of their specialty care, from civilian network providers. Soldiers 
enrolled in the TRICARE Prime Remote program remain eligible for MTF 
care.
    With regard to medical care itself, one common avenue for 
complaints is through the Inspector General. In fiscal year 1996, there 
were approximately 33,000 issues handled by the Department of the Army 
Inspector General (this includes issues generated by all sources, not 
only Active duty troops). Out of those, only five percent were related 
to medical care.
    Finally, in my travels and discussions with the troops I find that 
the lack of customer service is an issue for some of the troops. I 
believe the introduction of TRICARE will lead to improvements in this 
area since it is instilling a degree of competition into our military 
medical system. As military medicine competes with civilian contractors 
to keep its customers, I believe a more customer-oriented attitude will 
emerge, and, in fact, is already emerging.
    Navy Answer. I have received complaints associated with the TRICARE 
program. However, we must keep in mind that TRICARE is not fully 
implemented and, like any new program, has experienced some start up 
problems. The Assistant Secretary of Defense (Health Affairs) and the 
three Surgeons General are working aggressively to address and solve 
the key concerns of our troops: portability; improving access to care 
for geographically separated units; solving billing concerns; and, 
claims processing in order to make the system more customer-focused and 
user-friendly.
    Marine Corps Answer. It is true that the transition from CHAMPUS to 
TRICARE has resulted in some confusion and anxiety which have been 
manifested in the form of complaints. The majority of the complaints 
have targeted the system and not the medical care received. The 
Secretary of Defense/Health Affairs Office has initiated action to 
ensure issues such as access for those in remote locations, enrollment, 
billing, and services are promptly addressed.
    Air Force Answer. No. Air Force personnel as a whole are very 
satisfied with the care they are receiving through the Department of 
Defense (DoD). In fact, 80 percent of respondents in a recent DoD 
TRICARE survey rated their level of satisfaction as good to excellent; 
of particular note, the highest satisfaction (on the survey) of 86 
percent was with the quality of medical care received.
    To the contrary, I have received many concerns from retirees--in 
particular, retirees age 65 and older, who are increasingly 
dissatisfied with the military health care system as space-available 
care continues to diminish. The Air Force supports the DoD's efforts to 
continue pursuing legislation for full Medicare Subvention, which would 
allow older retirees to participate in TRICARE. Additionally, we 
support DoD in studying alternatives for these Medicare-eligible 
beneficiaries.
    Question. What is your impression of the medical care programs for 
dependents?
    Army Answer. In general, once this person is in the system, the 
care appears to be good. Again, the problem is the complexity of 
TRICARE and some of the issues it raises. The TRICARE Division, co-
located at the Office of the Surgeon General and at U.S. Army Medical 
Command, receives the bulk of the Army specific questions about medical 
programs and TRICARE. The most frequently voiced questions about 
TRICARE as it relates to family members are: (1) the portability of 
benefits from one TRICARE region to another; (2) the lack of an 
adequate provider network in geographically remote areas; (3) the 
problem of multiple copayments in cases where beneficiaries are sent to 
multiple sites for diagnostic testing pursuant to a visit; and (4) the 
issue of balance billing for authorized care from nonparticipating 
providers, which makes a beneficiary vulnerable to unanticipated costs. 
It is my understanding that all of these issues have been addressed and 
resolution is forthcoming in the interest of the beneficiary.
    As I stated earlier, the TRICARE Prime Remote program will 
proliferate in the near future and is designed to provide the same 
TRICARE Prime benefit that military treatment facility (MTF) to which 
Prime enrolled soldiers and families are entitled.
    Navy Answer. I believe we have a good medical program for our 
dependents where TRICARE is fully implemented and working. TRICARE 
Prime offers the least expensive option for our Active Duty Family 
Members (ADFMs). Prime enrollment data reveals robust enrollment among 
ADFMs. Retiree enrollment is also strong. Recent trends are encouraging 
with enrollment rising and patient satisfaction increasing. 
Additionally, the vast majority of Prime enrollees are re-enrolling. 
While encouraging, I believe we could make the system more ``user-
friendly'' by automatically enrolling ADFMs in TRICARE Prime at our 
MTFs and eliminating annual reenrollment. This would simplify the 
process and help our young Sailors and their families. However, seniors 
not eligible for TRICARE Prime feel disenfranchised from the system. 
Expanding the Mail Order Pharmacy Benefit for Medicare-eligibles is 
affordable and the right thing to do.
    Marine Corps Answer. Enrollment data reveals robust participation 
among active duty family members. Recent trends are encouraging with 
patient satisfaction increasing. We continue to work hard to overcome 
confusion and simplify TRICARE.
    Air Force Answer. We believe TRICARE provides a high quality, cost 
effective health plan for dependents. TRICARE offers three options for 
dependents, providing a greater choice than they had in the past. Each 
family must evaluate the options and choose which option best meets 
their healthcare needs.
    Question. What feedback are you getting from the troops regarding 
the new dental plan?
    Army Answer. TRICARE Select Reserve Dental Program was recently 
implemented, and there is very little information available at this 
time regarding this program. However, Humana Military Health Systems 
(HMHS) has reported that they have received 23,824 applications as of 
March 1998. HMHS is developing a promotional video and will have it 
completed for distribution in April.
    Regarding the Family Member Dental Program (FMDP), the February 
1997 General Accounting Office Report to Congress reported that 94 
percent of survey respondents indicated either excellent, very good, or 
good ability to get a regular dental appointment using the program; and 
92 percent of respondents indicated either excellent, very good, or 
good locations of dentists participating in the program. Per the FMDP 
monthly reports, the percentage of eligible soldiers who were enrolled 
in MDP remained at 77 percent for the period July-December 1997.
    The enrollment numbers for the TRICARE Retiree Dental Program 
continue to climb. As of March 5, 1998, enrollment of retirees and 
surviving spouses is 103,564. This count is based on the number of 
enrollment units (i.e., single, two people, family) and not the actual 
number of individuals covered. Again, little information is available 
regarding customer satisfaction or other measures due to the recent 
implementation of this program. Some of the troops I have talked to 
have indicated that this is one of the benefits that has definitely 
eroded. They are making decisions based on the amount of money they 
have, not on the care that their family needs.
    Navy Answer. Overall enrollment and satisfaction with the TRICARE 
Active Duty Family Member Dental Plan is good; attitude toward 
contractor, United Concordia Companies Incorporated by both civilian 
dentist and military family members has improved dramatically over the 
last 3 years. Navy and Marine Corps enrollment has remained constant 
over the last three years and is the highest of the military services. 
Contractor patient satisfaction survey indicates that 80% of enrolled 
beneficiaries rate the program Good or Excellent.
    The TRICARE Retiree Dental Program was implemented February 1998. 
Enrollment is strong; over 100,000 sponsors have enrolled during the 
first 6 weeks. Feedback is minimal as the program has been on line only 
6 weeks, but enrollment has been very brisk, exceeding both DoD and 
contractor expectations. The program appears to be very popular and 
much appreciated by the retired community.
    Our TRICARE Selected Reserve Dental Program was implemented in 
October 97. Subscription to this program by all the services has been 
disappointing, less than 20,000 total military enrollment, and less 
than 5000 Navy and Marine Corps enrollees. It may be too limited in 
scope of coverage to compete with dental insurance benefits offered by 
the employers of many reserve personnel.
    Marine Corps Answer. Overall, feedback indicates satisfaction with 
the new dental plan. The TRICARE Active Duty Family Member Dental Plan 
Beneficiary Survey revealed: (1) 59 percent of respondents reported 
satisfaction with the benefit and 79 percent stated they would 
recommend the plan to others, and (2) other positive responses 
included: the number of working dentists; ease of making an 
appointment; minimal travel distance to a provider's office; quality of 
care, claims processing, and complaint resolution.
    However, a few criticisms indicated a lack of sufficient 
orthodontic coverage, and that pediatric care is difficult to obtain.
    Air Force Answer. The Department of Defense and the Services have 
been tracking customer satisfaction with the TRICARE Active Duty Family 
Member Dental Plan since it changed contractors on February 1, 1996. 
Although the benefit package was unchanged, the transition was 
initially troubled by marketing, enrollment and provider network 
development problems. As those issues have been addressed by the Office 
of the Assistant Secretary of Defense (Health Affairs) (OASD(HA)) and 
the contractor, satisfaction with the program has improved.
    In an October 25, 1996 information memorandum titled ``In Progress 
Review of the TRICARE Active Duty Family Members Dental Plan (FMDP),'' 
OASD(HA) cited results of surveys conducted by the Services. Overall, 
beneficiary satisfaction with the FMDP was high and the number of 
complaints had greatly decreased. Claims were processed quickly and 
beneficiaries were pleased with the quality of the dental care they 
received. The contractor was working to develop provider networks in 
three specific challenging locations.
    At the direction of OASD(HA), an additional customer survey was 
completed in June 1997. The telephone survey of 2000 beneficiaries in 
12 TRICARE Regions showed that over 80 percent of respondents were 
satisfied with the FMDP. The TRICARE Service Office in Denver, 
Colorado, continues to assess and improve the performance of the 
current FMDP contractor, United Concordia Companies, Inc.
                              Drug Testing
    Question. The Committee understands that the random urinalysis 
testing program, is a key element contributing to readiness. However, 
each service and each Reserve component tests its service members at 
different rates. The rates range from testing only 20 percent of Naval 
Reserve forces each year to testing Army active duty service members 
twice a year. For service and the Reserve component of each service 
please provide the rate of drug testing per service member per year.
    Army Answer. Active duty Army soldiers are tested approximately 
twice per year; about 25 percent of Army Reserve soldiers are tested 
each year, and approximately 43 percent of Army National Guardsman are 
tested each year.
    Navy Answer.
    Active duty:

Fiscal year:
    1993..........................................................  2.09
    1994..........................................................  2.00
    1995..........................................................  2.12
    1996..........................................................  2.16
    1997..........................................................  2.05

    Reserve: The Naval Reserve actually tests at a much higher rate 
than 20% each year. In fact, we conduct testing on 10 to 20% of the 
entire Naval Reserve on a monthly basis, which equals a minimum of one 
testing per Reservist each year.

Fiscal year:
    1993..........................................................  1.50
    1994..........................................................  1.50
    1995..........................................................  1.40
    1996..........................................................  1.40
    1997..........................................................  1.31

    Marine Corps Answer. The active duty rate of drug testing is three 
tests per service member per year. Marine Forces Reserve requires once 
a year for reservists.
    Air Force Answer. Currently the Air Force is testing at a rate of 
.75 per service member per year.
    Question. Please provide the number of service members tested in 
each of the last five years.
    Army Answer. The number of service members tested for fiscal years 
1993 through 1997 are as follows:

----------------------------------------------------------------------------------------------------------------
                                                                    Active Duty
                           Fiscal Year                                 Army           Reserve     National Guard
----------------------------------------------------------------------------------------------------------------
1997............................................................       1,024,585          53,829         155,881
1996............................................................         964,280          47,495         141,393
1995............................................................         927,150          46,178         114,032
1994............................................................         998,591          41,977          79,449
1993............................................................         989,224          31,540          69,530
----------------------------------------------------------------------------------------------------------------

    Navy Answer. The number of service members tested are as follows:
    Active Duty Only:

Fiscal year:
    1993...................................................... 1,172,540
    1994...................................................... 1,050,245
    1995...................................................... 1,024,863
    1996......................................................   964,767
    1997......................................................   883,378

    Reserve \1\:
---------------------------------------------------------------------------
    \1\ Reserve numbers are calculated from percentages of Naval 
reservists tested within each respective fiscal year. Exact numbers of 
Naval Reserve service members tested were not maintained in the past, 
but future testing results will reflect exact numbers of reservists 
tested.

Fiscal year:
    1993......................................................   140,000
    1994......................................................   140,000
    1995......................................................   130,000
    1996......................................................   125,000
    1997......................................................   125,000

    Marine Corps Answer. Total samples submitted are as follows:

----------------------------------------------------------------------------------------------------------------
                                                                              By fiscal years
                                                          ------------------------------------------------------
                                                              1993       1994       1995       1996       1997
----------------------------------------------------------------------------------------------------------------
Active...................................................    444,125    490,512    498,463    509,863    529,864
Reserve..................................................     22,085     21,306     19,140     22,238      (\1\)
----------------------------------------------------------------------------------------------------------------
\1\ Not yet available.

    Air Force Answer. The number of service members tested in each of 
the last five years follows:

Calendar year:
                                                           Number tested
    1993......................................................   168,761
    1994......................................................   187,942
    1995......................................................   184,554
    1996......................................................   207,247
    1997......................................................   286,539

    Question. Provide the drug positive testing rate for each of the 
last five years.
    Army Answer. The drug positive testing rate for fiscal year 1993 
through 1997 are as follows:

                                                  [In percent]
----------------------------------------------------------------------------------------------------------------
                                                                    Active Duty
                           Fiscal year                                 Army           Reserve     National Guard
----------------------------------------------------------------------------------------------------------------
1997............................................................            0.77            2.59            3.04
1996............................................................            0.61            2.52            2.93
1995............................................................            0.62            2.96            3.04
1994............................................................            0.05            3.20            3.00
1993............................................................            1.01            2.97            3.10
----------------------------------------------------------------------------------------------------------------

    Navy Answer. The Navy's drug positive rate for each of the last 5 
five years follows:
    Active:

                              [In percent]

Fiscal year:
    1993..........................................................  0.71
    1994..........................................................  0.77
    1995..........................................................  0.75
    1996..........................................................  0.67
    1997..........................................................  0.87

    Reserve:

                              [In percent]

Fiscal year:
    1993..........................................................  0.03
    1994..........................................................  0.03
    1995.......................................................... 0.025
    1996.......................................................... 0.025
    1997.......................................................... 0.023

    Marine Corps Answer. The percentage of Marines that have tested 
positive in each of the last five years is as follows:

----------------------------------------------------------------------------------------------------------------
                                                                              By fiscal year--
                                                          ------------------------------------------------------
                                                              1993       1994       1995       1996       1997
----------------------------------------------------------------------------------------------------------------
Active Duty..............................................        .74        .75        .69        .72        .88
Reserve..................................................        (1)        .37        .39        .54        (1)
----------------------------------------------------------------------------------------------------------------
\1\ Data not available.
 
Note.--The above figures all represent less than 1% positive tests.

    Air Force Answer. The drug positive testing rate for each of the 
last five years follows:

Calendar year:
                                                           Positive rate
    1993......................................................      0.25
    1994......................................................      0.25
    1995......................................................      0.20
    1996......................................................      0.18
    1997......................................................      0.18

    Rates are determined with opiates, barbituates, amphetamines and 
AFIP (Armed Forces Institute of Pathology) blind specimens removed. 
Methamphetamines are included.
    Question. Provide the rationale for the rate of testing used by 
your service/component.
    Army Answer. Active Duty: Testing rates have been driven by the 
commanders in the field. The drug testing labs and the Army budget has 
been able to fully support the requests for testing by the Army 
commanders who make their quota requests for a specified amount of drug 
testing prior to each fiscal year. The current rate of testing 
approximates to two tests per soldier per year, but there is no set 
maximum rate that is provided to the field to limit testing; the 
regulatory minimum is one test on average per soldier per year. 
Reserve: The testing rate is driven by the commanders' field 
requirements, operational tempo, and resources. National Guard: The 
testing rate is driven by the availability of resources.
    Navy Answer. The Navy's ``zero tolerance'' drug abuse policy has 
been in effect since 1981. Since then the Navy has pursued an 
aggressive urinalysis testing program. The objectives of Navy's drug 
testing program has been to deter and detect drug abuse as well as 
provide data on the prevalence of drug abuse. All uniformed personnel 
are subject to random and other forms of urinalysis on a continuing 
basis. Current Navy policy requires that each command test between 10 
and 30 percent of assigned personnel every month. This and 30 percent 
of assigned personnel every month. This rate is determined to provide 
an appropriate deterrent effect for illicit drug use.
    Marine Corps Answer. The Marine Corps conducts urinalyses on all 
Marines, regardless of grade or position, on a routine basis, (minimum 
rate is once a year for both active and reserve components, as per DoD 
Directive 1010.1, ``Military Personnel Drug Testing Program'' para D-2) 
and/or as frequently as testing facilities and organizational missions 
permit. The Marine Corps' primary rationale is that testing should be 
done often enough to act as a deterrent, but not so frequently that it 
adversely affects morale or creates an administrative burden. MCO 
P5300.12A provides commanders additional flexibility and guidance to 
conduct routine urinalyses on a ``for cause'' basis, when a Marine 
joins a command, or as part of a formal inspection.
    Air Force Answer. The primary purpose of the Air Force drug testing 
program is to deter service members from using illegal or illicit 
drugs. For this objective to be met, the Air Force has adopted a strong 
drug testing program which is highly visible, unpredictable, random and 
carries harsh consequences for those identified for illegal and illicit 
drug use. Rationale for the current drug testing level is a result of a 
compromise between the Secretary of the Air Force and the Department of 
Defense (DoD). The DoD has established a minimum rate of testing of one 
random sample per active duty member each year. The Air Force has 
interpreted this to mean testing at 100 percent of is endstrength. 
Historically, the Air Force has had an illicit drug positive rate three 
to four times below those observed with the other services (Navy 0.8 
percent; Army 0.8 percent; Marine Corps 0.8 percent) and has argued in 
favor of a lower testing rate (the other services are testing at a rate 
of approximately 2.0). A compromise was reached and the Air Force was 
granted a waiver to test for a period of 12 months at a rate of 0.75. 
At the end of this 12 month period (CY 97) the data accumulated would 
be evaluated and the testing rate for the Air Force would then be 
reassessed. We have found that there has been no change in the illicit 
drug positive rate between the previous year (CY 96) while testing at a 
rate of 0.5 and the study year (CY 96). Drug positive rates have 
remained the same at 0.18. Our findings have been forwarded to the AF/
SG and AF/CV for review. Our testing rate remains at 0.75.
    Question. If the rate of testing were uniform throughout the 
services, what would the preferred rate be by your service/component?
    Army Answer. Active Duty: Two tests per soldier per year on 
average, as that is the rate that is being requested by the commanders 
in the field who are best able to assess their requirements for drug 
testing to enhance readiness. Reserve: The Army Reserve is striving to 
support the current Department of Defense requirements of one test per 
service member per year. Exceeding the current rate of testing would 
require additional fiscal and personnel resources. National Guard: The 
Army National Guard would prefer to support the current Department of 
Defense requirements of one test per service member per year.
    Navy Answer. The Navy would prefer a minimum testing rate equal to 
or greater than two tests per service member annually, as the Navy 
currently employs.
    Marine Corps Answer. Department of Defense Directive 1010.1, 
Military Personnel Drug Abuse Testing Program, paragraph D.2b requires, 
``The minimum rate of testing is one random sample per active duty 
member per year.'', as a responsibility of the Service Secretary's 
administration of the program. However, due to the increased use of 
illicit drugs in the civilian community as reflected in the positive 
rate of entrant testing, it is preferred that the random testing rate 
be sustained at a higher rate to effectively enforce the DOD directive 
1010.1, policy of paragraph C1b to, ``Use drug testing to permit 
commanders to detect drug abuse and assess security, military fitness, 
readiness, good order and discipline of their commands.''
    The current testing rate of the Marine Corps is proving the most 
effective toward detection and deterrence of drug abuse. The rate fully 
supports mission goals and is integrated into the operational readiness 
scenario.
    Air Force Answer. Standardization of drug testing rates among 
service lines is not in the best interest of the Department of Defense 
(DoD). We believe the DoD should establish suggested or recommended 
levels of testing, and allow the services flexibility to implement. 
Each branch of the service should be able to determine what level of 
testing is sufficient to meet its program goals and respond to their 
specific threats. The level of testing must be high enough to maintain 
visibility, but not high enough to negatively impact mission 
capabilities. Greater emphasis must be placed on eliminating drug 
abusers from entering the service, or identifying them as early in 
their careers as possible. We strongly support increased drug testing 
rates at the point of accession and during technical training since 
statistically the prevalence of drug use is higher among individuals in 
the 18-26 year age group.
    Question. If the rate of testing were uniform at one test per 
service member per year, what would be the impact on readiness for your 
service component?
    Army Answer. Active Duty: Readiness could be hampered, as 
commanders would be prevented from testing to their requirements to 
deter drug abuse in their units. Reserve: Readiness would be enhanced; 
however, increased testing could reduce the time available for training 
without additional resourcing. National Guard: The Army National Guard 
readiness would be enhanced by increasing identification of drug 
abusers, and increasing deterrence of drug abuse.
    Navy Answer. Because of the negative effects of drug abuse on 
readiness, health, and safety, it is important the Navy continue 
urinalysis in accordance with current Navy policy. There are profound 
tradeoffs between test rate and detection rate. The probability of 
detection of drug abusers would decrease if the test rate decreases. In 
addition, as the probability of detection increases the deterrence 
effect on potential drug abusers increases. Simply put, the higher the 
probability of detection, the greater the deterrence effect.
    Marine Corps Answer. Considering the accessibility of illicit drugs 
in the civilian community by our service members, one random test per 
year would not support the Marine Corps operational readiness goals for 
deterring drug abuse and assurance of a drug-free force for deployment.
    Air Force Answer. One hundred percent testing would potentially 
impair the Air Force's ability to meet its mission requirements at its 
current OPSTEMPO and PERSTEMPO. Virtually all resources needed to 
administer, collect, observe, process samples, and report results for 
the service's drug testing program are taken ``out-of-hide'' from 
operational and support units. The Air Force currently expends more 
than 300,000 manhours ($5,586,000) annually to support drug testing 
activities that are not identified or resourced to perform this 
function. Increased testing to 100 percent would require a 
significantly greater investment from operational commanders to support 
this program with little return. We suggest that if the DoD mandates an 
increase in our testing levels that resources (manpower and monies) be 
provided to support this requirement. Continuing to levy what is 
perceived as unreasonable requirements in light of increased OPSTEMPO 
and PERSTEMPO, and in a time when the AF has proven it has the lowest 
drug usage rate in the DoD, is less than acceptable.

    [Clerks' note: End of questions submitted by Mr. Young.]
                                       Thursday, February 12, 1998.

                            MEDICAL PROGRAMS

                               WITNESSES

DR. EDWARD D. MARTIN, ACTING ASSISTANT SECRETARY OF DEFENSE FOR HEALTH 
    AFFAIRS
LIEUTENANT GENERAL RONALD R. BLANCK, SURGEON GENERAL OF THE ARMY, U.S. 
    ARMY
VICE ADMIRAL HAROLD M. KOENIG, SURGEON GENERAL OF THE NAVY, U.S. NAVY
LIEUTENANT GENERAL CHARLES H. ROADMAN, SURGEON GENERAL OF THE AIR 
    FORCE, U.S. AIR FORCE

                              Introduction

    Mr. Young. The Committee will come to order. You notice we 
have larger facilities today, so we have room for our visitors. 
That is a vote, and I think rather than start, we probably 
should make our journey to the chamber, cast our vote, and we 
will come right back.
    All right, we will try this again. What I started to say 
was how nice it is to have this room, it is so convenient and 
allows all of our visitors to be here. The disadvantage is that 
it is very far from here to the chamber where we have to vote.
    We want to welcome all of you, Dr. Martin, General Blanck, 
General Roadman, and Admiral Koenig. We are happy to visit with 
you again. We had an excellent casual briefing with you just 
several months ago. We are happy to see the President's budget 
with a little more realistic number for military medicine, and 
we will talk about that today.
    We are vitally concerned about the health care for those 
serving in uniform as well as their families. We are also 
concerned about those who have retired and the issue of 
Medicare subvention, the issue of whether we allow them to get 
into the FEHBP, how we are going to solve that problem. So we 
are happy to have you here. We are going to put off any other 
remarks I have, I will submit for the record.
    Mr. Murtha?

                         Remarks of Mr. Murtha

    Mr. Murtha. Let me just say a couple of words. I knew these 
open hearings were not good so far away from the Capitol where 
we have to run back and forth to vote, but occasionally we have 
to have them. But I am delighted to see you folks here, and 
there is no subcommittee that has done more to work on medical 
problems than this subcommittee. Under Bill's leadership, and 
when we were in charge, we have done everything we could to 
take care of the quality of life.
    I am so proud to have just come back from Okinawa, where I 
saw a naval hospital, working with the Air Force, a real 
coordinated effort, and everybody said it was the best possible 
care you could get. Everybody was complementing everybody else 
with the care. It took me a half-hour to find any problems at 
all. So I am delighted to see so much progress being made.
    People do not hesitate to tell you when there are problems 
when you are out in the field. You guys sanitize everything. 
But they don't hesitate to tell you. So the results of your 
work are good.
    When Bill was out in the hospital, when the Chairman was in 
the hospital, that was the lousiest room I have ever seen out 
there at Bethesda. Just out there not long ago, that has been 
improved. So things are getting better. I am delighted to see 
that happen.
    Mr. Young. Well, Dr. Martin, we are happy to start off with 
your presentation, and we will go to the Surgeons General, and 
then we will have some questions for you.

                    Summary Statement of Dr. Martin

    Dr. Martin. Yes, sir. Mr. Chairman, distinguished Members, 
it is certainly my pleasure to be here today. I want to thank 
you for holding the hearing early to make sure that I had the 
opportunity to participate.
    I think, as both of you pointed out, the relationship that 
we in DOD or the military health system enjoy with this 
committee is unique, and it is largely a reflection, I believe, 
of the enormous interest and concern that each of you have in 
the health care and well-being of our Armed Forces, their 
families and our retirees. Your involvement in the changes in 
military medicine over the last 5 or 6 years and how we are 
better positioned to carry out our missions obviously has been 
a major part of the successful changes that have occurred.
    I have submitted my statement, if it is all right, Mr. 
Chairman, for the record, and would like to briefly summarize 
three of the basic points in the testimony.
    First, military medicine has achieved a new level of 
understanding and respect in the minds of our military line 
leaders, particularly the combatant commanders. Today's 
potential threats to their forces demand a strong, agile and 
technologically advanced military health system to provide 
force protection. It is protection that begins when individuals 
enter the service. It involves a continuous record of their 
health and fitness, as well as potential exposures to 
increasingly large numbers of hazardous materials and 
environments.
    Force health protection is with our service members while 
they are at home and while they are deployed. It is there to 
provide care shipboard or on the front lines, and it will take 
care of them while returning to a medical center able to offer 
specialized care, and it is hopefully there everywhere for 
their families, both around our facilities and not.
    Second, I believe that TRICARE is successful. In the span 
of less than a dozen years, we have undertaken a very diverse 
and independent operating system of health care, the Army, Navy 
and Air Force systems, along with CHAMPUS, and integrated them 
to build an organized military managed care system. Such a bold 
step has proven insightful, and, in fact, has resulted, I 
believe, in very substantial success in pulling together the 
three services to begin to solve the problems that we are 
definitely going to face as we move into the 21st century.
    That is not to say that we do not have problems, 
particularly with how we reimburse our providers, the process 
by which we provide timely information to many of those 
interested in our system, and, very importantly, the 
difficulties we continue to have in some places with access. 
Nonetheless, TRICARE has demonstrated that it is possible to 
continue to enhance quality, improve access, and do so at a 
significant decrease in cost to the taxpayer.
    Lastly, the possibilities for the future of military 
medicine, I believe, are very bright. In the past 5 or 6 years, 
the community of military medicine has become one of 
collaboration, where our focus is on improving the system and 
the delivery of health care, in collaboration, very 
importantly, with the joint staff and the line communities 
within the services.
    I think it has been very clear that we have set aside the 
interservice competition and disagreement which was rife and 
characterized the system in the early 1990s. I think we have 
demonstrated very clearly, and particularly the Surgeons, 
reflect the constructive application of our energies toward the 
improvements that are needed, not only in our system, but also 
with the Department of Veterans' Affairs and will we see great 
progress there.
    In closing, Mr. Chairman, let me say I am very proud of the 
very substantial accomplishments within the military health 
system, and certainly this committee has helped us to achieve 
them.
    In truth, however, it is the men and women of the military 
health system, military and civilian alike, officer, enlisted, 
active, Reserve, all across the world, who deserve the credit 
for the tremendous strides military medicine is making, and 
will, I believe, continue to make over the next 5 to 6 years.
    Thank you, Mr. Chairman.
    Mr. Young. Dr. Martin, thank you very much. We will come 
back to you with some questions.
    [The statement of Dr. Martin follows:]

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    Mr. Young. Let's go to General Blanck for his statement.

                  Summary Statement of General Blanck

    General Blanck. Thank you very much.
    Good morning, Mr. Chairman, Mr. Murtha, distinguished 
members of the Committee. It is my pleasure to be here and 
speak briefly about Army medicine.
    I will not repeat what is in the testimony. You can refer 
to that at any time, and we do want to have time for questions.
    I think it is important to note that although I will speak 
about Army medicine, most of what I say will be repeated or 
could be stated by the other Surgeons, because we work 
extremely collaboratively in ways that Dr. Martin articulated, 
getting at the issues of quality, the issues of readiness, and 
ultimately the issues of service.
    Now, we were privileged to have several conversations 
actually with many of the Members on some of the quality issues 
that have been raised, and I would like to report that we have 
all made extreme strides, great strides, in solving those 
problems and getting at those issues, in making our high-
quality system even better. That, of course, is what we are all 
committed to do.
    As far as the Army, we had a significant backlog of cases 
that needed review. I am pleased to reported to you that we 
have cleared up those backlog cases. We still, of course, have 
new ones that come in at a small rate per month that we are 
dealing with, and we are assisting the JAG, the Judge Advocate 
General, in the claims review that the legal folks do with 
contractors. So I think we have solved that and are doing the 
appropriate reviews and are reporting more individuals than 
ever before to the National Practitioner Data Bank.
    We have initiated, and this is for all the services, a 
report card. You have copies in front of you, and I have a 
blowup there on the easel. That happens to be of Tripler Army 
Medical Center, which, although an Army hospital, is quite 
triservice, because it takes care of an awful lot of Navy, Air 
Force and Marine personnel, and, in fact, the Deputy Commander 
is a Navy captain. So we really are working together, as Mr. 
Murtha spoke of as well.
    You will note on there, on the extreme right, a box that 
gets at measures of excellence. Joint commission, board 
certification, bachelor degrees for nurses, and satisfaction 
with access, with quality.
    On the far left you see the timeliness, with the standards 
of access that TRICARE has stated and where that hospital is in 
meeting those access standards.
    Commitment to wellness, just under that, where you get 
wellness information and how that fits in with all of the 
health care that we provide.
    Then finally, the numbers that one can call to get more 
information about TRICARE or to register a complaint or 
difficulty if for an individual patient that is not being met. 
This will be positioned in all of the lobbies of our hospitals 
and clinics in sizes such as that, and then folks will also 
have the handout copy you see in front of you, and I will pass 
out to some in the back, that they can refer to, post on their 
refrigerator, because this has useful information with good 
ways to get into the system. As we all know, that has certainly 
been a problem.
    I would just add that as far as readiness, clearly that is 
our reason for being. The health care we do today is partially 
readiness, but we are also emphasizing that aspect of readiness 
that has to do with deployment training, caring for folks 
during deployments, have taken very seriously the lessons from 
the Gulf War in doing environmental and disease surveillance, 
so that when the Army was getting ready to try to bridge that 
flooded river and go into Bosnia, preventive medicine, 
epidemiologic teams were already on site, and in a short time 
we did over 115,000 analyses of air, soil, and water, so that 
today I think I know more about Bosnia than I do about Fort 
Indiantown Gap or Admiral Koenig does about Quantico. We are 
really doing that and doing that very, very well.
    Finally, I would just mention the advances in the 
Informatics, because capturing the records in an automated 
format is clearly one of our biggest challenges. We are doing 
that with various systems now, and this summer we will begin 
the test of the high-capacity personal information carrier. I 
have shown many of you this, but I will hold it up again, 
because this is the medical record, the dog tag, that one hangs 
around a serviceman or woman's neck and that has all of the 
medical information and captures what exposures they may have 
had, any health events, immunizations and so forth, as we also 
store it centrally.
    That concludes my opening remarks. Thank you.
    Mr. Young. General, thank you very much.
    [The statement of General Blanck follows:]

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    Mr. Young. Admiral Koenig, we are glad to see you fit and 
healthy again. We hope you are fit and healthy. We also 
understand your schedule requires adjustment. We certainly 
understand and would be happy to hear from you at this time.

                  Summary Statement of Admiral Koenig

    Admiral Koenig. Thank you, Mr. Chairman, Mr. Murtha, 
members of the Committee. I, too, have submitted my testimony 
for the record. I just would like to make a few brief remarks 
here this morning.
    In August of 1997, some of our Navy doctors at the Navy 
Medical Research Institute announced a very significant 
breakthrough in organ transplantation, which we think is going 
to benefit all of mankind in the very near future. And on that 
very same day, in Guam, a Korean airliner crashed. You probably 
remember that incident where over 300 people were killed, and 
only 32 people survived the crash. Of the 32 people who 
survived, 19 of them were taken care of at our Naval hospital 
in Guam, which is only about 1 mile from the point of the 
crash.
    I think that single day emphasizes or exemplifies what Navy 
Medicine is about and how we reach around the world and do 
things.
    I identified four priorities for Navy Medicine during my 
tenure as Surgeon General. The first is taking health care to 
the deckplates. Simply put, this means we are trying to take 
care of Sailors and Marines as close to where they work as we 
possibly can. We take care of them in their barracks, in their 
gymnasiums, where they train, on the decks of ships, in sports 
medicine clinics, wherever we can get to them, and we think 
that has helped a great deal in improving the health of our 
people.
    The second major priority is to move information, not 
people; that is, to take advantage of technology, to bring 
health care to the people instead of making them come to us for 
healthcare.
    I would like to tell you just a little about what we 
achieved abroad the aircraft carrier George Washington. As you 
may know, the George Washington is now in the fourth month of 
her deployment in the Persian Gulf. During these 4 months the 
George Washington has had 46 consultations with our Navy 
Medical Centers in the States. Over 500 X-ray examinations that 
have been transmitted from the George Washington have been 
processed by Navy Medical Centers in the U.S., interpretations 
immediately sent back to the ship, and helped them make 
decisions concerning the patients' management on board the 
ship.
    We think we have prevented 13 medevac evacuations. Without 
the ability to consult with specialists thirteen sailors would 
have been taken off that ship. However, we were able to manage 
their care on the ship and get them back to work, instead of 
having to transport them off the ship and lose that sailor's 
productivity, placing an added burden on his or her shipmates.
    I'd like to share other initiatives in the technology world 
that I think demonstrate where we are heading. At two of our 
hospitals, personnel have already learned how to help their 
patients get prescription refills over the Internet. That is 
even easier for people who know how to use the Internet than it 
is to use the telephone to refill a prescription, and the 
patients really like that.
    I think the most exciting initiative and probably the 
simplest one. exploiting technology, is at our Naval hospital 
in Naples, Italy where they set up a program that every time a 
baby is born and the dad is at sea, they take a picture of the 
baby and send it to the ship as an enclosure to e-mail, and the 
dad gets to see a picture of Mom and the newborn baby within 
hours after the birth.
    My third major priority is making TRICARE work. We have all 
talked about TRICARE, so I don't need to talk much more about 
it, except let me say, I truly believe we need to make TRICARE 
more user-friendly and more understandable for our 
beneficiaries. The word I use is ``demystify''. TRICARE is too 
complex. We need to decrease the confusion for our beneficiary 
population.
    I think the most important thing we can do to accomplish 
that is to make enrollment in TRICARE Prime automatic for 
active-duty family members living within the catchment areas of 
our facilities, along with the option to decline being enrolled 
in TRICARE Prime, similar to servicemen's life insurance 
procedures, or the way we handle our survivor's benefit 
programs for retirement. Automatic enrollment with the option 
to decline would make things easier for people.
    I think we have one major problem with TRICARE, and it is 
one that I think you are all very much aware of, and agree we 
really need to address. TRICARE as it is set up today is 
gradually disenfranchising our older beneficiary population. 
When our people become Medicare-eligible, they are no longer 
eligible for TRICARE. We simply cannot tolerate that.
    These people are our most loyal, our oldest and most 
vulnerable patients, and we really need to take care of them. 
We cannot break our promise, we cannot on the day of their 65th 
birthday say, sorry, you cannot see the same provider that you 
have been seeing for the last 7, 8, 10, 15 years. You have to 
go find somebody else. That is basically where we are headed. 
We have to fix that problem. Medicare subvention is certainly 
an essential step in that direction, but is not the total 
answer, and we have to look for a more complete answer than 
Medicare subvention.
    Finally, the fourth point we are emphasizing is 
reengineering our business practices, focusing on quality 
health care. I will say that Dr. Martin's 13-point program for 
accessing quality improvement initiatives is one we have been 
following in Navy Medicine, as have the Army and Air Force. We 
really believe in every one of those points and are working 
hard to achieve them.
    Finally, I will be retiring on the 30th of June of this 
year, 40 years to the day from when I raised my hand as a 
midshipman at the Naval Academy. That is why I picked that day. 
I think 40 years is long enough. It has been a great trip, but 
I think my wife and I need to get on with some other things in 
our lives. I want to thank you and the entire Committee for the 
outstanding support that you have given to us in Navy Medicine 
and our sister Services. It has been an honor to serve with 
you.
    Thank you.
    Mr. Young. Admiral, thank you very much. We recognize what 
a sacrifice it is for you to be here today, and we appreciate 
the fact you were here.
    [The statement of Admiral Koenig follows:]

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    Mr. Young. General Roadman.

                  Summary Statement of General Roadman

    General Roadman. Mr. Chairman, Mr. Murtha, members of the 
Committee, my formal testimony is also submitted.
    I think that we couldn't have started any better than 
having Mr. Murtha point out where we believe we have made great 
progress in executing our strategic plans that all of us 
jointly have done.
    As you listen to all of us, I think you will hear so much 
overlap and so much convergence that you think we have the same 
writers, and really what it means is that we are holding hands 
together differently than we ever have before, and each of us 
catalogues what we are doing a little bit differently.
    The Air Force has a five-initiative strategy. First, and 
always first, is medical readiness. The second strategy is to 
deploy TRICARE and make that work. The third is to rightsize, 
to get the efficiencies in our system, so that we husband the 
Federal dollar and take care of our people correctly. The 
fourth is to build healthy communities, which is an emphasis on 
prevention, intervention so early that, in fact, we prevent 
disease rather than having to treat it in its later stages. And 
it is all capped by what Ron pointed out with the report card 
of which we have got to have customer satisfaction as we are 
going about doing the vital things of our mission.
    In readiness we have done several things. We have 
essentially managed two weapons systems for the Air Force and 
for the joint community, and that is air transportable 
hospitals and aeromedical evacuation. In both of those, what we 
are trying to do is to reengineer so we have a smaller 
footprint to put into the theater of combat to support combat 
arms and to provide increased quality of care, increased 
clinical capability. I think much of the reengineering is best 
exemplified by the initial IOT&E of our chemically hardened ATH 
as the threat in the world begins to change. We need to look at 
the kit that we bring to the fight, and we expect the first 
chemically hardened ATH to actually be operational at the 
latter part of this year.
    In addition, as the amount of medicine that goes into the 
theater of combat decreases, what we have got to do is be able 
to transport more critically injured patients. So we are 
reengineering air transport with the concept of care in the 
air.
    In addition, the Army for a long time has been absolutely 
on point where they said that the most important weapons system 
was the soldier, and I, quite frankly, in the early part of my 
career said, that about the F-15s and F-16s. Quite frankly, as 
we have come to look at readiness, it is clear you can have all 
of the technology in the world, but if the human weapons system 
is not capable of doing what it needs to do, then we are not 
ready to do our job. So we have taken on the concept of the fit 
fighting force as our prescription for readiness in physical 
fitness, mental fitness, as well as growing people to 
understand the environment in which they exist prior to going 
into the theater of combat.
    The second pillar is to deploy TRICARE. And I think it is 
critical for us to understand that as we are trying to do 
TRICARE, it looks like a peacetime health care initiative--but 
it is really the life support system for our readiness 
capability, TRICARE is also, as we have made a promise to our 
beneficiaries, TRICARE support contracts must be the safety net 
to take care of people, as BRAC closes bases, people we have 
disenfranchised. We have to be able to outsource and privatize 
much of that care, which is the way to look at TRICARE.
    TRICARE enrollment is growing faster than we had expected 
it to. Our greatest concern, and I agree with Harold, is that 
as I wake up early in the morning worrying about what it is we 
are not doing, I think of the promise that we made people to 
take care of them, to provide their health care for life. And 
we have recruiting posters as recently as 1991 that said, if 
you stay in the military for 20 years, we will provide for you 
health care for life. Quite frankly, we cannot walk away from 
that promise. So I agree that that is one of the steps that we 
have got to fix.
    Subvention is the first step. The concerns I have with that 
are the limitation of the numbers of people that can get in on 
that, and also the delay in implementation. We are working that 
very, very hard.
    The third pillar is rightsizing. We are executing that 
strategy. It will mean that there will be less medical centers, 
less hospitals, but more ambulatory care clinics, because the 
problem we are trying to fix desperately is access, that when 
people are sick, they can get in.
    The number of specialists to primary care is upside down 
for us. In other words, in the Air Force we have about 70 
percent specialists and 30 percent primary care or access 
folks. That means the pyramid is upside down. So we have got to 
force-sculpt and relook at how we deliver our care so we get 
that balance correct.
    In building healthy communities, we see that also as a 
readiness issue. We have done a number of things to transition 
us to that. We have begun measuring physical fitness by a 
technique called cycle ergometry, which is the same thing that 
is used in the Olympic training camps, where we measure the 
VO2 max of people in peacetime, so we know what 
their cardiovascular fitness is and their capability of 
functioning under stress. And we have put health and wellness 
centers at most of our bases. We have 53 bases out of 70 with 
those, where we have exercise physiologists that are helping 
people when they are exercising, not requiring them to be 
patients, but actually outreach in the gymnasium, so they are 
dealing with being in control of their own health care.
    All of the programs I have discussed this morning are 
listed in my testimony, but it is all capped by customer 
satisfaction. I think the quality of care today is better than 
it has ever been, and it has always been good. We know from our 
surveys that our customers are more satisfied with access 
quality than they have ever been in the past. Our Board 
certification rate is higher than it has ever been in the past. 
So I think we are making great progress.
    In addition to the external surveys, we find our surveys 
from the JCAHO, show that we are on the average 5 percent 
higher than our civilian counterparts. So we know that there 
are horror stories, but what we see systemically is that the 
system is getting fixed.
    In conclusion, I will tell you we have a very strong 
customer-based strategy for readiness; for comprehensive 
quality health care through TRICARE; rightsizing our 
facilities; for prevention--keeping people well; and for 
looking at customers, focusing on customer satisfaction as a 
key performance factor.
    None of this would be possible, Mr. Chairman, without what 
has already been alluded to, the wonderful support we have had 
from your Committee and the relationship that we have had over 
time to try to fix the problems together.
    Thank you very much.
    Mr. Young. General, thank you very much.
    [The statement of General Roadman follows:]

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                   DOD HEALTHCARE FUNDING SHORTFALLS

    Mr. Young. I thank all of you for an excellent 
presentation. As we have had an opportunity to meet personally 
just in the last couple of weeks, I appreciate very much the 
commitment that all of you obviously have to providing good 
medical care for members of the military and their families.
    We all would also admit there is a long way to go. We are 
not where we need to be yet, and I am not sure we will ever get 
there, but at least we are working on it one day at a time.
    So that brings me to my first question, and that is the 
President's budget. In recent years we have identified serious 
shortfalls in the President's budget for health care, and this 
Committee has taken the lead to correct those problems and add 
the additional funding. This year I would compliment the 
President's budget in that he has substantially increased his 
request. However, it is still some $300 million under what we 
appropriated for fiscal year 1998.
    My question has to be are we once again in a shortfall that 
we are going to have to address, or do you consider the 
President's budget adequate at the numbers stated?
    Dr. Martin. There are two answers to that, Mr. Chairman, 
yes and no. Let me just do the yes and then the no.
    In regards to the Department's commitment to fully fund the 
budget, Dr. Hamre and Mr. Lynn were actively engaged with the 
process. I believe, and I think all three Surgeons believe, 
that the core budget requirements that we were able to get into 
the budget were, in fact, those that we felt were the amounts 
required to carry out our programs. And that was important, 
because that constituted almost a $500 million increase in the 
POM.
    Now, having said that, it is important to point out that 
there was some give and take. Number one, there is no question 
that the services and the Department added a significant amount 
of money to the POM base, which, as you know, was very low, 
and, I think, unexecutable.
    At the same time, the three Surgeons first identified 
certain areas where we could take additional savings so we 
would not have a larger than necessary transfer of funds to the 
health program. For example, we cut real property maintenance. 
But the level to which we cut it to is consistent with 
continuing to maintain and improve our facilities, partly 
because of the investment we made over the last couple or 3 
years. We continue to incorporate significant savings 
associated with shifting from hospital care to ambulatory care.
    So part of the budget is a series of assumptions about a 
continuation of some fairly impressive gains we have been able 
to make, both ourselves and with our contractors. We feel at 
least the core budget was fully funded, and the Surgeons can 
certainly speak to their opinion on that.
    Where there continues to be difficulty, which is the no 
part of the answer, is, first the question of technology and 
intensity. In fact this committee asked the General Accounting 
Office to look at this issue. The General Accounting Office 
clearly articulated that if, in fact, you are going to maintain 
pace with inflation, you need to incorporate that factor in 
your budget. Not unreasonably, the Office of Management and 
Budget does not allow that to be included in any discretionary 
programs. So that means by definition our budget is short that 
amount. Very frankly, I believe DOD would have incorporated it, 
but it is a budget policy issue. And it is very clear to me 
that if you do not cover technology and inflation requirements, 
then you either have to decrease other kinds of services, or 
you cannot provide the modern medical technology and advances 
that are required to keep pace with medicine today.
    The area which we are working on and the Secretary 
mentioned is technology. It is an issue the Department is 
concerned about, and it is an issue that still has to be looked 
at.
    The second component of our current budget difficulty has 
to do with timing in regards to the inflation decreases. 
Essentially what happened is that late in the budget cycle 
there were a series of inflation adjustments to the overall 
budget. Some of those adjustments were completely appropriate. 
There are two that were problematic. Number one, we do not 
believe that there is going to be an inflation reduction is 
possible on pharmacy, and we know there cannot be one taken on 
our managed care support contracts.
    Mr. Lynn has indicated that he is very interested in 
working with the committee, partly because of the timing of 
these reductions, to make sure that both the committee and the 
Department are comfortable that we are not going to have to 
reduce services.
    In regards to the reduction last year versus this year, 
part of it is due to the one-time ``buying out'' of our managed 
care support contracts. We also are taking care of less people. 
So the reduction from fiscal year 1998 to fiscal year 1999 is 
in part understandable, based on the decreased requirement. As 
DOD works with the committee to resolve the issues of 
technology, intensity and inflation application, there is every 
reason to believe that we will have a fully funded budget for 
fiscal year 1999.

                LIFETIME HEALTHCARE FOR MILITARY MEMBERS

    Mr. Young. The other Members have specific questions on 
some of these issues, and we will get to that. I am going to 
ask one more question before I yield to the other Members. That 
has to do with after retirement.
    I know there has been a lot of conversation about we didn't 
promise people who enlisted in the military or became officers 
in the military lifetime care. In meetings last week with 
several of you at the table, we talked about that, and, in 
fact, we did in a way promise. And I asked General Blanck if he 
would bring one of those with us, and as you see the poster 
there, an Army recruitment brochure, the part highlighted in 
yellow says, ``Superb health care. Health care is provided to 
you and your family members while you are in the Army and the 
rest of your life if you serve a minimum of 20 years of active 
Federal service to early retirement.'' It doesn't say anything 
about cutting it off at age 65 or anything like that.
    Now we are dealing with Medicare subvention, we are dealing 
with the USTFs. This Committee asked you last year in our bill 
to give us a plan on using the Federal Employees Health Benefit 
Plan, and we are anxious to see that.
    Where do these all fit? To me this is a commitment. I do 
not care how the lawyers might look at it; to me, this is a 
commitment. How are we going to keep this? Medicare subvention 
is not getting the job done, is not going to get the job done 
in the minds of a lot of people. FEHBP might or might not. We 
need to find out if it will. USTFs are something that I think 
appear only in about 10 regions of the country, but they could 
be a player.
    So say something about this issue, and then we will get on 
to some of the specifics of the medical budget.
    Dr. Martin. Yes, sir. It is in the QDR, and, very frankly, 
is one of the top priorities of Secretary deLeon, how we as a 
Department with the Congress can solve this particular problem. 
It is ranked very high in everybody's mind. The service chiefs 
have made it clear that this is also a retention and a 
credibility issue.
    I think it is fair to say most of the leadership of the 
Department does not take the position that these promises were 
not made. In fact, in almost all of the discussions I have been 
in, particularly with people in the services, they know 
perfectly well that the promises were made. It has been an 
important recruitment incentive for mid-career people, 
particularly mid-career enlisted, especially those with large 
families.
    There is simply no question that recruiters and those 
individuals who sought to get military personnel to extend and 
re-up, used the health care promise consistently over the 
years.
    Setting the legal issue aside, what Secretary Cohen has 
indicated that he expects to be done over the next couple 
months--and Secretary deLeon is looking at it now--is exactly 
in response to the question that you have raised. In other 
words, how many people are we talking about with which kinds of 
coverage? The fact is, there are a couple hundred thousand, 
probably 300,000 getting care from the direct care system. 
Admiral Koenig mentioned one thing that happens because of the 
current law. They move from being enrolled in our system with 
their own primary care doctor to all of a sudden, since they 
are no longer CHAMPUS-eligible, they now have to move to space 
available.
    One thing being looked at as a part of Medicare subvention, 
is for at least those individuals reliant upon our direct care 
system--and 300,000 people is a lot of people--and they want 
care from us, we find some way to allow them to enroll and take 
advantage of primary care managers.
    That is one component of a strategy. Medicare subvention 
actually has two parts; number one, TRICARE enrollment for 
those 300,000 people who use our system predominantly, and 
number two the new Medicare choice program. The Medicare choice 
program now provides more options for people in the private 
sector and, like our TRICARE contractors, is fairly widely 
spread across the country, in a lot of different communities.
    So a second thing that Secretary deLeon, the leadership of 
the Department, are looking at is how we can develop a 
``partners'' program with Medicare. We could work with Medicare 
to take advantage of those Medical Choice programs which, do 
not have the deductibles, have low out-of-pocket costs, good 
catastrophic coverage, and almost all include pharmacy, a major 
deficit of standard Medicare.
    Some number of people, of course, have their own coverage; 
and some people, there end up not being able to take advantage 
of those alternatives.
    By the way, USTFs, currently are a part of our overall 
strategy along with the direct care system and the contractor 
system.
    So I think the answer to your question is, number one, it 
is a problem, and you have heard from members of this panel. If 
you ask the chiefs, you would hear the same thing. If you ask 
Secretary deLeon, you would hear the same thing. We need to 
begin to find solutions. Secretary deLeon feels very strongly, 
since this is a benefit issue, not a medical issue--this is 
really a pay and compensation issue--that it is very, very 
important that we much more aggressively push ahead on our 
Medicare subvention demo, on the clarification of current 
benefit capabilities, and look at what those other alternatives 
are. This is a problem that is not going to go away.
    On the other hand, we have to be cautious about creating a 
new benefit because if a new benefit cost $1.5 to $2.5 billion 
and was not the most effective or efficient benefit, it would 
be a mistake that would be difficult to pull back from. There 
needs to be thoughtfulness about what the alternatives are, but 
there can be no question about the need to join the issue and 
begin to solve it. Although I think probably we are going to 
solve it in pieces. There are different groups of people with 
different needs that we have to be able to respond to.
    Mr. Young. I agree we have to be careful that what we do is 
right, because we are going to have to live with it for a long 
time. So we do have to be cautious. But we do need to expedite 
reaching this decision and getting something done.
    Dr. Martin. Yes, sir.
    Mr. Young. We will come back to these issues again. I want 
to yield to Mr. Murtha at this point.
    Mr. Murtha. I just have a couple comments. It may be, as 
you work your way through subvention, that you could work in 
this problem to see during the demonstration would this be part 
of it; for instance, that they could stay in TRICARE, and you 
could pay this as part of this demonstration project, and then 
we could move from there, because it is a fairly good-sized pot 
of money, although obviously it doesn't cover it all.

                    SUPPORT STAFF FOR DOD HEALTHCARE

    A couple of things that worry me. The Chairman sent a 
letter to you folks about the people that support the doctors. 
Every place I go, no matter how good the health care is, I 
always get complaints about the supporting personnel, and out 
at Bethesda, or in Okinawa, one or the other, I got a complaint 
that a doctor had to clean his own office. If you could be any 
less efficient than that, I don't know.
    This letter doesn't comply with the general provision that 
we put in the law. We said, don't cut the support people. We 
gave you an out. What do you do? You just ignore it. You find a 
legal way of ignoring keeping support people working.
    That is unacceptable. It is signed by General Roadman, and 
I am sure he did not mean to mislead the Committee, but we 
believe you need support people in order to make the doctors 
more efficient. That is all there is to it. It is that simple. 
When you find a way around, it just is not acceptable. We would 
hope that you would find a way not to use end strength, not to 
use contracting out, not to use excuses about you would have 
the support people. I don't care where you go, you will have 
every outfit, every hospital tell you you need more support 
people, and that is just common sense, because it is more 
efficient.

                          TRICARE COMPETITION

    The other one comment I wanted to make was this TRICARE 
contract that was just overturned, it seems to me with the 
experience that we have had, and we have to be more careful in 
the competition that we don't get overturned. This is very 
disruptive when these things are let out and then overturned. 
So few contracts are overturned, and it just worries me that we 
have not learned by this time that these contracts, the way to 
compete them, was causing a problem. So I would hope that you 
would work on better competition so we don't have the 
overturning.
    You remember the problem we had in California. It was just 
a complete disaster. It took months before it was overturned. 
They hired people, then they had to go back. I don't know how 
many contracts you put out. I know they are big contracts. They 
are legally complicated. But I hope you would concentrate on 
that.
    Dr. Martin. Mr. Murtha, I would like to make a comment for 
the Committee I think is very important. First, the current GAO 
recommendation is not to terminate the contract. What they said 
is that the process used was not the best process, and that 
they recommend that we actually, like we did in California, 
look at it.
    It is important to point out that in the same decision, one 
of the problems is that we did what the GAO had told us to do 
in the last three protests--which we won. Since GAO said if we 
do it this way, it is the proper way, and that would be the 
smart thing to do. Doing it that way we sustained the protests. 
Unfortunately we have a new hearing officer and a new attorney 
who said, oops, you shouldn't have done it the way we told you. 
Even though we supported you then you should have done it 
differently.
    I think, very frankly, that the judgment our people made 
about following the proven formula was not a bad decision. But 
we are absolutely as concerned as you are about the impact of 
this. The process of how we are going to deal with this protest 
decision by GAO is not over yet. There are options we are 
looking at.
    Mr. Murtha. Thank you, Mr. Chairman.
    Mr. Young. Near the close of the last session, we had a 
good meeting with all of you on the issue of quality of care in 
the military facilities. Mr. Hobson, a distinguished member of 
this Committee, initiated that meeting and brought together 
some important questions which you responded to very well, but 
you told us you would have more answers for us as we have this 
hearing. I would like to yield now to Mr. Hobson to continue on 
that issue.

                     QUALITY OF MILITARY HEALTHCARE

    Mr. Hobson. Thank you, Mr. Chairman.
    As you stated, last fall a series of newspaper articles ran 
in the Cox newspapers around the country concerning aspects of 
our military health care system for active duty personnel and 
their families, some of which were in my district. There were a 
number of things identified in these articles. I want to thank 
the chairman and the Ranking Member for their support in this, 
because the series basically said the military health system is 
a magnet for bad doctors, the military does not warn service 
members and their families of unqualified and incompetent 
doctors, and does not report them. The services do a poor job 
in monitoring and verifying doctors' credentials and 
performance records. Military hospitals and clinics rely 
heavily on poorly trained or unqualified providers, and even 
exemplary doctors can have bad outcomes because of inadequate 
support, incomplete records, outdated equipment and a lack of 
continuity of care.
    Subsequent to that in November, we received what I think we 
would all agree was not the appropriate answer, but I must say 
that Dr. Martin was a refreshing face in this area. He came 
forth. Instead of stonewalling it, he came in and we had a 
meeting, and we discussed a lot of these problems. I appreciate 
the meetings we had later on these issues, but I haven't heard 
a lot of resolution of them today.
    I have a series of questions which may have to go a couple 
of rounds, because I have some questions concerning individuals 
and where they may be in the military today and how the 
treatment has happened. I have some questions on a blood bank. 
I have questions on TRICARE and some awards of some contracts, 
and I have some other general questions about the operations.
    Pertaining to medical records, I particularly like the 
moveup we have had in that. I think that was a direct result of 
the chairman and the Ranking Member allowing us to have the 
meeting we had. Although it was ongoing, I think it got a 
boost.
    Generally speaking, I would like to thank Dr. Martin, even 
though he is a short-timer, and he knows my rule on that, that 
is an inside joke, for his willingness to spearhead this in an 
atmosphere of people trying to work together to get the best 
health care we can for the people in the military and their 
dependents. But I do have to say, we have had some problems, 
and I think we need to talk about this.
    I also would like to thank Tina Jonas, our staff person who 
has been very helpful to all of us in bringing focus on this.
    Let me talk about some of the things that were in some of 
those articles since you all haven't brought them up. I think 
we have got to get them out here and find out what has 
happened. I think that has been the attitude you people have 
had before, and I want to continue that.
    In the Dayton articles, for Air Force providers, Dr. 
Roadman, there was a doctor named Andrew Curtis Faire, this is 
from the articles, was involved in the death of four patients 
at an Army hospital in Texas. Number one, is he still 
practicing; has he been disciplined; have his clinical 
privileges been limited, suspended or revoked? What were the 
problems associated with these deaths, and has there been an 
external review group in these cases? He is actually an Army 
doctor, I guess.
    General Blanck. The name again, sir?
    Mr. Hobson. Andrew Curtis Faire.
    General Blanck. Beaumont. Not in the Army. Related to the 
National Practitioner Data Bank. I can get you more 
information. But all of the steps that were to have been taken 
have been.
    Mr. Dicks. Did you say he is out of the Army?
    General Blanck. Yes, sir.
    Mr. Dicks. Is he still practicing medicine?
    General Blanck. I don't know.
    Dr. Martin. My understanding is that he is, with a fully 
unrestricted license. In fact, we went back to check and many 
of the physicians that we discharged including for cause and 
reported to the National Practitioner Data Bank currently are 
practicing medicine. Most, I understand, unrestricted licenses 
with no limitation on privilege. This has to do with the 
character of a bigger problem.
    Simply because we take action doesn't necessarily mean that 
there is always going to be a subsequent action by States. We 
actually have gone through and I think we have provided to Ms. 
Jonas--for all those individuals by name that we know, and 
provided a status of where each one of those individuals is and 
our current knowledge about what they are doing.
    Mr. Hobson. But there are some internal structure problems.
    Let me get to the Air Force. I misstated. The first one was 
Army. There is a Dr. Thomas Conage, these are out of the 
article, an Air Force colonel. It is alleged that he used 
somebody else's license and continued as chief flight surgeon 
at Tinker Air Force base in Oklahoma for 6 months. Apparently 
he was reprimanded but continued to practice medicine for a 
year after that. I think we need to know the explanation of the 
reprimand and why he was then allowed to retire. Does this send 
the right message to others who might be attempting to forge 
credentials?
    General Roadman. Absolutely it does not send the right 
message. The date on that, I believe, is in the late 1980s on 
that particular case.
    Mr. Hobson. I don't know the date.
    General Roadman. I am just telling you in the time phasing 
of that. It does not send the right message. The answer was 
that I believe the right things were done on that particular 
case. He is not in the service currently. I will have to get 
you the details on the follow-up.
    [The information follows:]

    This timeline of events was reconstructed as accurately as possible 
from incomplete records:
    Colonel (Dr.) Thomas J. Conage's first assignment as a physician 
was September 1976 at Altus AFB, Oklahoma. It is unclear what his Air 
Force duties were prior to this time.
    In 1988, Colonel Conage was the Chief of Aerospace Medicine at 
Tinker AFB, Oklahoma. In April 1988, during licensure verification, we 
learned that the Illinois medical board was unable to read his license 
number, which ultimatey led us to discover that Colonel Gonage 
fraudulently altered an Illinois medical license and claimed it was his 
own. Upon discovery of this fraudulent activity, we removed him from 
his supervisory and leadership position.
    Colonel Leo Cousineau, Colonel Conage's hospital commander at the 
time, recalls immediate suspension of privileges and complete removal 
from patient care pending legal outcome of his case. ------. During the 
discovery process, the case moved to another base since Colonel Conage 
claimed bias on the part of the leadership at Tinker AFB.
    According to the database at Tinker AFB's Legal Office, Colonel 
Conage received an Article 15, non-judicial punishment, on September 
29, 1988. ------. Colonel Conage was also reported to the Federation of 
State Medical Boards (FSMB) for unprofessional conduct.
    On October 14, 1988, Colonel Conage passed the FLEX exam (the 
appropriate medical licensing exam at the time), and in November 1988, 
he received a full, valid and unrestricted Virginia medical license. In 
a December 1, 1988 letter. ------. The committee did not have any 
concerns with the clinical performance they observed. On December 5, 
1988, Colonel Conage was subsequently assigned to the Family Practice 
Clinic, and performed non-flying physical examinations and treated 
adult acute care patients. ------. Having accumulated 20 years of 
service by this time. Colonel Conage retired in October 1989.

    Dr. Martin. But, Mr. Hobson, as you well appreciate, and we 
have talked about a couple of these cases, I think it is 
important for the Committee to be aware that a number of these 
cases not only happened in the late 1980s, and early 1990s, but 
the process of jurisprudence when we looked at them didn't make 
us very happy. There were actually more egregious cases where, 
the desire to report somebody to the National Practitioner Data 
Bank, which was completely supported by all of their peers. But 
their commanders' decisions were reversed at higher levels, and 
other things like that.
    I would have to say for the bulk of those cases, the three 
Surgeon Generals and I were very unhappy reviewing the 
processes that, were used to deal with them some number of 
years ago. Part of what this committee expected of us was to 
make sure that the rules were so clear and so explicit that 
those kinds of occurrences could not happen again in the 
future. There is no doubt in my mind, that it is inexcusable 
that those kinds of situations should have resulted in 
different kinds of action with more visibility.
    Importantly and one of the consequences of the Dayton 
articles that very positive is that it crystalized for medical 
providers in our whole system these set of issues. Predictably 
there were two reactions. The first reaction by a lot of 
people's part was, ``Well, gee whiz, we are good doctors. Most 
of the doctors we work with are pretty good. This is unfair.'' 
But what happened over that 2- or 3-month period of time, and 
you can see this in letters that are being now written to U.S. 
Medicine or Federal Practitioner, is that our practitioners 
realize that physicians, or nurses or other people who are not 
following the rules, who have done things that are 
inappropriate, reflect badly on them. This has been a real 
tough problem with the medical profession. How do you 
discipline your own members?
    Mr. Visclosky. Will the gentleman yield for a second, 
please? I do think dates are important. If I could just follow 
up on the gentleman's question, you had mentioned that Dr. 
Faire is not with the Army anymore. When did he leave the Army?
    General Blanck. I don't know. I would have to give you that 
information.
    [Clerk's note.--The information was not provided for the 
record.]
    Dr. Martin. Before General Blanck was Surgeon General, so 
it had to be at least over 2 years ago.
    Mr. Hobson. Let me ask you about one then. Is Dr. Gary 
Davis currently an Army doctor?
    General Blanck. Yes.
    Mr. Hobson. Do you want to explain; do you want me to run 
through that one, or do you want to explain it?
    General Blanck. No, I really do, because I think that is an 
important one. It gets at some of the issues. In fact, what I 
am going to talk about has been reported not only in these 
articles, but in some other articles. And so there are some 
legal issues. However, privacy does not apply as it would for 
some kinds of cases. So I will speak as openly as I possibly 
can.
    Dr. Davis is currently on active duty in the United States 
Army, practicing at Madigan Army Medical Center. He entered the 
Army as a fully licensed, unrestricted licensed, board 
certified, University of Arkansas graduate in the specialty of 
obstetrics and gynecology. At that time a background check did 
not reveal any issues.
    After he was on active duty, we learned that a process had 
culminated in the State of Idaho leading to the revocation of 
his license. We stopped his practice immediately, in 1989 or 
1990, and reviewed all of the cases, all of the care that he 
provided while on active duty, both review within the hospital, 
but then with outside consultants actually on the basis--
although he still had an unrestricted license in, at that time, 
two or three States. Georgia is the one that he uses today.
    Because of that revocation of the license, even though we 
found no fault with his care while on active duty, we referred 
him to something that all the services have called a show cause 
board. This is a very formal process in which the service 
member shows cause as to why they should or should not be 
separated from the service. They have rights in that. They can 
provide information. It is a very formal process. The Army--not 
the medical department, not health affairs--the Army decided 
that he could stay on active duty, and has subsequently been on 
active duty and doing a job within the scope of his practice. 
He has been at several places, currently at Madigan. In fact, 
when the article came out, I asked that the care that he 
provided at Madigan be reviewed. It was, and found to meet the 
standards.
    Mr. Hobson. Is he still training? Does he train students?
    General Blanck. He is part of obstetrics and gynecology, 
and I don't believe they have a residency in it there, but 
would probably be involved in it.
    Mr. Hobson. There are a whole series of these. If you look 
at, there is another, Dr. Monsanto at Kings Bay, a Navy guy.
    Mr. Dicks. If the gentleman will yield, what bothers me 
about Dr. Davis, besides the fact that he had problems in 
Idaho, I don't even think these articles clearly delineate what 
those problems were, and had a number of problems where there 
were malpractice suits brought against him, I think five, is 
that he went out and advocated for this Dr. Lim. And Dr. Lim is 
the one that wound up doing a surgical procedure that severed 
the blood supply of this young lady's leg, wound up costing us 
what, how many million, $4.2 million.
    Mr. Young. $5 million.
    Mr. Dicks. This guy had all kinds of problems. Nobody says, 
what about his judgment? Why would we then promote him and put 
him into a position of authority when he was the guy who 
advocated for a doctor who was clearly incompetent? How can you 
justify that?
    And then the rest of the story gets worse. It says right 
here that the Army took the father, Clark's father, retired 
master sergeant, a retired guy, Randall Clark, after he filed 
the lawsuit, the Army relieved him of his duties as a nurse at 
Fitzsimmons and transferred him to Korea. Asked about the 
transfer, Dr. Blanck said, ``That's dumb, insensitive, and it 
is not what we're about.'' Well, it sure as hell is. Somebody 
in the Army was about it. Maybe you weren't, General, and I 
certainly appreciate the way you reacted to this, but this guy 
Clark who had served in Vietnam said he was also ordered to 
return his daughter's medical records, which were being used by 
the attorney to prepare for litigation. ``Once a person files a 
military malpractice claim against the military, the military 
does everything it can do to make the person's life 
miserable,'' said Clark, who returned with his family to 
Westerville. The Army paid the Clarks $987,786 immediately and 
$5 million over Clark's lifetime.
    What I can't understand, with all the problems we have, how 
does this guy get promoted and sent to Madigan? That doesn't 
make any sense. He is the guy who went out and advocated for 
Lim. First of all, I would think that a mistake of that 
magnitude would make it impossible for an individual to be put 
in a leadership position.
    Dr. Martin. First let's be very clear that the 
circumstances surrounding Dr. Lim are unequivocal. Part of the 
reason that there was such a large settlement is that it was 
totally unacceptable medical care, and that is why we lost a 
huge malpractice case. As you know, Dr. Lim left the military 
soon thereafter. I just might add parenthetically he is in an 
unrestricted practice in the State of New York now. And we 
reported him.
    But I think part of the difficulty--and I will be very 
candid with the committee because we have been wrestling with 
this. It isn't just a question of the Surgeon General of the 
United States Army, Air Force or Navy today saying, ``okay, 
this occurred in 1992, and in retrospect he shouldn't have been 
promoted or sent to wherever.'' What is difficult is to look at 
the circumstance, particularly those years ago, in regards to 
how promotion boards operated, who then was making the 
decisions about transferring these people, and how were these 
decisions made? You have to remember that the same person who 
made that decision or people who made that decision--also made 
the decision not to report certain people to the National 
Practitioner Data Bank. Subsequent to that they made the 
decision to report nobody in the Army to the National 
Practitioner Data Bank, which was pointed out by this 
committee.

             TREATMENT OF DOD MEDICAL MALPRACTICE LITIGANTS

    Mr. Dicks. Dr. Martin, can you tell us--I know you have got 
your 13-point plan. We are going to get into that later here 
because I am told by the staff that a lot of it has not yet 
been implemented and should be. But can you give us assurance 
that we are not treating people like this, moving them to Korea 
because their daughter was treated badly at a military 
hospital?
    Dr. Martin. I can give you assurance that I find that 
particular event abhorrent. I am absolutely confident that the 
three Surgeon Generals feel the same way. This becomes very 
important. One of the important things that we discussed with 
the Committee was to change the ability of people to bring 
rapidly these complaints to public attention. In fact, one of 
the things that Dr. Blanck talked about is that every single 
one of our beneficiaries ought to know what is expected of us, 
and what number to call if it is wrong. They need to be able to 
seek legal recourse.
    Both you and I know that it is very possible 5 years, 10 
years, 15 years ago to find circumstances--I could even think 
of cases that occurred in the last week or two--where 
individuals with specific authorities and responsibilities 
didn't carry out their duty properly, or were in positions of 
command and made decisions that, in retrospect, were 
inexcusable. That is different than the question you really 
drove at me. How can we assure you that we are going to change 
it?
    I think the assurance we have to give you is that we are 
opening up the system. There is going to be a lot of sunlight 
shining in it. A lot of the kinds of things that used to be 
kept secret are no longer going to be kept secret. We are 
looking at every single case that comes up now. If, for 
example, one of the Surgeon General's staff says this is okay, 
or they attempt to push it under the rug, it goes to an 
independent civilian group.
    The other thing that is very important is that the 
expectations of our patients and beneficiaries are getting to 
the point where if that occurred today, I don't think that he 
simply would go off to Korea. He has read the papers, and 
immediately somebody would begin to bring that forward. I am 
confident to say that the current ASDHA (HA), any of the three 
Surgeon Generals or Secretary DeLeon, who find that abhorrent, 
we would immediately go to that service and say, this is not 
going to happen this way.
    Mr. Young. Let me have Mr. Hobson complete his questions. 
Then we will come back in order for you to finish.
    Mr. Hobson. I want to shed the sunlight on another one 
because I think it is relatively current, and I think the 
person may still be in the service. That is what I want to find 
out. There is a Dr. Jerry Mothershead, a physician at the 
Portsmouth Naval Hospital. He was allowed to work in the 
emergency room while he was intoxicated. Subsequent 
documentation revealed that he was an alcoholic, having at 
least a dozen episodes of drinking that lasted 3 to 4 days each 
between 1991 and 1995. Nevertheless Commander of the Navy 
Medical Corps, Dr. McDonald, wrote to the Virginia Medical 
Board saying that, I have seen no evidence that Dr. 
Mothershead's alcoholism has any current impact on his ability 
to practice medicine. The articles say that Dr. Mothershead is 
still at Portsmouth Naval Hospital.
    Number one, is that true? Second, do we still have an 
alcoholic taking care of emergency room patients? Was Dr. 
McDonald reprimanded for his irresponsible letter on behalf of 
Dr. Mothershead? And what are you doing to get out the message 
to hospital commanders that this sort of coverup is not going 
to be tolerated? How do you intend to enforce this policy?
    Dr. Martin. Actually I happen to know that case. Dr. 
McDonald was the Director of the Board of Medical Examiners in 
the State of Virginia. But to the point, the individual 
involved was referred for appropriate proceedings, which ended 
up with the individual undertaking treatment.
    First of all, he is an alcoholic. Yes, we have an alcoholic 
on active duty. In fact, we have some number on active duty. 
But there is a difference between an alcoholic who is 
continuing to drink and an alcoholic who has been able to bring 
the disease under control. This particular physician as of 2\1/
2\ months ago went through rehabilitative therapy, had been 
detoxed, and as of the October-November time frame was a 
recovering alcoholic, no longer drinking. When this individual 
in question was raised to me, I checked through BUMED and with 
the Navy.
    In regards to whether the letter should have been sent, I 
don't think that it would be sent today. We had another case 
that occurred last summer which was analogous to this one. The 
doctor was relieved of privileges immediately, and given the 
choice of either going through a complete rehabilitation 
program or leave the service.
    Part of the nonjudicial punishment process that we go 
through isn't medical. So if you have a situation where an 
individual has problems that are associated with behavior, the 
process of making a determination is often a nonmedical 
decision.
    In this particular case, I don't think the letter should 
have been written. Ian McDonald, whom I served with in the 
Public Health Service, brought it to my attention last summer. 
In fact, the real decision is, did we take the appropriate 
steps for this doctor, and if this behavior is repeated, would 
he face the appropriate military justice? Yes. Would we suspend 
his privileges? Yes, definitely. And that is really the key to 
the questions that are being asked about making sure this stuff 
can't happen again.
    Mr. Hobson. You have got another one here that I don't know 
the answer to. That is, this Commander Edner C. Monsanto, a 
pediatrician at Kings Bay. He has had two recent cases of 
malpractice, one involving the misdiagnosis of a 6-month-old 
who had bacterial meningitis. Failure to diagnose this properly 
resulted in permanent brain and nerve damage to the child. A 
judgment of $1.9 million was paid. Second misdiagnosis of a 2-
week-old girl resulted in permanent neurological damage. A 
judgment of $4.1 million was paid. To my understanding, he 
still practices at Kings Bay. I want to know what has been done 
to protect others. Is he being supervised, has he had limits 
put on his privileges, and what is happening?
    Admiral Koenig. When these cases came to light, we pulled 
all of them, and reviewed them, I found Commander Monsanto was 
reported to in the National Practitioner Data Bank for one 
case, but not the other. The unreported case was reviewed and 
put through a peer review group. We subsequently reported the 
Commander to the National Practitioner Data Bank for both 
cases. We also had his privileges put in abeyance, that is a 
fancy word we use for taking them away temporarily, and 
reviewed his present practice, had a group of physicians look 
at what he was doing, how he is practicing now. We had put him 
through some remedial training in the time subsequent to that. 
I believe the outcome of the peer review of his present 
practice was that he could go back and practice pediatrics in 
the ambulatory setting with some limitations on how much he 
could do.
    Mr. Hobson. With supervision?
    Admiral Koenig. Yes.
    So I think we have properly addressed the Dr. Monsanto 
case. I am a pediatrician, too, and so is Edward Martin. I will 
tell you, every one of us lives in fear every day when we are 
in the clinic that that could happen to us, because you can 
miss these things.
    Mr. Hobson. Absolutely. My concern is when they happen and 
when the things repeatedly happen, that you take the 
appropriate action. I don't think it should have to come out in 
newspaper articles as it did, and I think you gentlemen 
acknowledged the fact that there have been some mistakes in the 
system. What we are trying to do--and I don't think it should 
have had to come out, frankly, for this committee for that.
    I would like to talk about the 13 points, but I am going to 
come back to that in the end, I will wait for the next round, 
because I have got about 6 more questions.
    Mr. Young. Mr. Dicks.
    Mr. Dicks. To follow up on this, Dr. Martin, you have 
acknowledged the problems here. Your plan includes a three-
pronged approach to address the problem. Conduct an internal 
DOD Inspector General audit to determine the extent of the 
problem. Insist that the services retire their backlog of 
cases. Use an external civilian panel to determine whether or 
not malpractice has occurred.
    So far none of these goals, according to the staff, has 
been accomplished. Moreover, the services still have a large 
number of cases requiring review. The Army has a backlog of 131 
malpractice cases. Of these 131 cases, 90 are awaiting external 
peer review, and 40 are in final processing. The Navy has a 
backlog of 130 cases. And the Air Force has no backlog at this 
time.
    Maybe I could ask General Roadman to explain to us how you 
dealt with your backlog.
    General Roadman. Mr. Dicks, about 2 years ago we 
reengineered our process. Basically the peer review and the 
consultant program was too long. We went to a trained group of 
consultants that do the review, and this shortened the process 
by about a year.
    Mr. Dicks. And so you have no backlog at all?
    General Roadman. That is right. When you say backlog, we 
have got 37 that are being reviewed for final standard of care 
determinations. Those are in the process. In other words, they 
are not queued up and nothing being done on them. They are in 
the legal review. So they are on track.
    Dr. Martin. Mr. Dicks, could I correct the record on where 
we are? First of all, the Inspector General's investigation was 
requested, is completed and is on my desk. Second, we have let 
the contract for the civilian external review, to carry, get 
out; and, third, the Army has sent me a memo that guarantees 
the entire backlog will be completed by the end of this month.
    General Blanck. But, in fact, yes, you can use the term 
``backlog,'' they are undergoing review. They are not in a 
queue. They are in process of being reviewed at various stages 
in that. I am not sure we will ever have less than a certain 
number.
    Mr. Dicks. There are always a certain number of these 
pending?
    General Blanck. Right. We started out with a real backlog, 
over 800. We are now at--actually it is 123, numbers of cases 
that are in the process of being reviewed.
    Mr. Dicks. The Air Force said they just had 37 cases 
pending, too, so you still have some that are not resolved. You 
don't have every case resolved.
    General Roadman. What I want to give you is in the absolute 
number. In the queue and in the process we have got, we have 36 
claims that are currently being reviewed at regional medical 
center law consultants. That is the law. Then we have 37 that 
are being reviewed for final standard of care determination. So 
if you add those, we have got 73 that are in the queue.
    Mr. Dicks. That are going through the process?
    General Roadman. Absolutely. In other words, they are not 
lying fallow. They are going through the prescribed process. 
But the question that you ask is, how are we moving those? We 
relooked at our whole process about 2 years ago.
    Dr. Martin. This is very important--and part of our 
reengineering effort the individual who is accused of violating 
the standard of care appropriately has the right to defend him 
or herself. There is a judicial process that allows them to 
present evidence to say, now, wait a minute, this is or is not 
true. Concurrent with that, there is a very quick review to see 
whether there was a significant violation of the standard of 
care. If there was, the privileges are suspended right away. We 
don't wait for the whole process.
    Let me give you an example that occurred last summer. An OB 
was found to have potentially given us information that was 
incorrect on his license. They discovered it at 10 o'clock in 
the morning. By 2 o'clock that afternoon, he was not seeing 
patients. So if there is a danger to the patient, we hold their 
privileges in abeyance immediately. Then they have this chance 
to state their case. I bumped into a case, an Air Force case 
that has taken 2 years. The person has not been allowed to see 
patients, but has a very good attorney. So each step of this 
adjudication process involves the attorney.
    The crucial thing that you are touching on is whether we 
set up processes so we don't wait for the whole process to be 
finished before we make the standard of care decision to 
protect patients. The answer to that is we review those 
immediately.
    Mr. Dicks. And we are reporting people when appropriate to 
this national register?
    Dr. Martin. That's correct. We were not fully reporting 
before. One of the issues that was raised was that one service 
simply was not reporting it at all. The minute that was brought 
to our attention along with the Oklahoma license issue, the 
services took appropriate steps and began reporting. In that 
particular service's case, there was a very substantial backlog 
of over 800 cases that hadn't even been reviewed.
    Mr. Dicks. First of all, my impression is after our two 
meetings on this, you guys are trying to work on this. But it 
has got to be a very high priority to give confidence to the 
people who go to Madigan and go to all these various facilities 
around the country that they are going to get high quality care 
here and that they don't have to worry that they have got 
somebody there who is--to me it is the personnel practices 
here. We have got to be really careful about the people we 
allow to practice.
    Dr. Martin. Mr. Dicks, let me tell you in clear terms. This 
to me is up close and personal. I have an 8- and 9-year-old. I 
go to these facilities with the same expectation that you are 
articulating for all of our beneficiaries. I think it is 
absolutely essential that we do not allow, either through 
systemic flaws or other kinds of problems, situations to occur 
that might endanger our beneficiaries. I am very personally 
supportive of exactly the point you are making.
    Mr. Hobson. Will the gentleman yield?
    Mr. Dicks. Yes.
    Mr. Hobson. Since you brought it up and it is along your 
line, why don't you explain--I want to give you a chance to 
explain the Oklahoma licensing problem and how you acted in 
that. I think you did a very responsible thing. It goes along 
with what Mr. Dicks brought out.
    Dr. Martin. What appears to have happened in Oklahoma is a 
good-intentioned effort by the State of Oklahoma to provide an 
Oklahoma license for Indian Health Service employees plus 
military physicians in the State of Oklahoma and in other 
places. Apparently that evolved during the time when the Public 
Health Service and in the military were just beginning to 
require licensure. I think it is true that some number of those 
individuals clearly thought that they were getting a real 
Oklahoma license. Some others knew perfectly well that they 
were not getting an unrestricted license. So there is a 
question about which person are you talking to, because you can 
go back to look at the documentation.
    It is also true that we were complicit because there was at 
least one memorandum in the middle to late 1980s that 
recommended people call a particular number to get this kind of 
license. So the whole purpose of it appears to be, certainly 
from those with intent, to get around our directive which said 
you had to have an unrestricted license, because this clearly 
was not an unrestricted license.

                 LIFE SUPPORT FOR TRAUMA AND TRANSPORT

    Mr. Dicks. I want to take back my time just for a second. I 
think you have answered the question. Just one brief one, Mr. 
Chairman.
    Dr. Martin, I want to thank you for your help in the USTF 
and congratulate you on your career, and Admiral Koenig, and we 
want to work with all of you to make this system better.
    Dr. Martin, last year we added $4 million to the DARPA 
budget to accelerate the development of an innovative portable 
intensive care system known as life support for trauma and 
transport with its capability to provide hospital-grade care in 
forward battle areas. We think it is going to markedly improve 
your ability to handle and save many combat casualties. The 
development of this project has been the result of very 
effective cooperation between DARPA, the Army and industry. 
What we are trying to find out is why the money hasn't been 
released. Does anybody know? Or can you get us an answer for 
the record?
    Dr. Martin. We can give you an answer for the record. I 
don't understand that at all.
    [Clerk's note.--The information was not provided for the 
record.]
    Mr. Dicks. I understand DARPA, along with the Navy and 
Marine Corps, have indicated great interest in this system. 
Unfortunately I have not heard how the Air Force regards its 
system. If you have got anything, or let me know who I should 
talk to.
    Dr. Martin. We will provide the answer to the Committee. I 
might say that the R&D is continuing to move ahead, but in 
order to get the money this committee provided, we have to move 
it into P-6 money, so that if you find it incumbent in the 
future to do this, make sure you put it under P-6.
    Admiral Koenig. Could I chime in for a second on that? I 
think there are eight of those life support for trauma and 
transport will be coming out this year that we are going to 
test. I know the program is moving ahead. We are going to 
deploy these devices with some highly selected operational 
units and see how they perform.
    Mr. Dicks. Good.
    Thank you very much, Mr. Chairman.
    Mr. Young. Thank you, Mr. Dicks. Mr. Cunningham.
    Mr. Cunningham is our in-house test pilot, by the way. For 
those of you in the interest of the Navy problems, we had some 
questions about the new F-18 program. We had a statement from 
the GAO, but we decided to send our own test pilot down to fly 
the airplane, which he did this weekend, and had a positive 
report. But that will be for another hearing.
    Duke, you are recognized.

                       REMARKS OF MR. CUNNINGHAM

    Mr. Cunningham. Thank you, Mr. Chairman.
    This is a tough Committee, but I would like to, first of 
all, make the record clear. My active duty time, the closest 
thing we had to an old-time little town, small town doctor was 
our doctors, our medical doctors, our flight surgeons. I never 
met--in 20 years of service, I never met a bad one or one I 
didn't like. I think that is commendable.
    I also like some of the innovations that you are going 
from, the technology innovations you have aboard ships as far 
as the satellite communications, telemedicine. Those things I 
think are revolutionizing warfare. It does relate to readiness.
    All of us agree that you can go and look in law 
enforcement, you can look in a regular medical practice, any 
field, and you have got some problem areas. I think all we are 
asking--and Mr. Hobson from Ohio has stated quite correctly 
that this is the first group that hasn't come in and tried to 
cover up things, that you have been very forthright. We 
appreciate that, because we all recognize there is a problem. 
If we don't adhere to that, then part of readiness and 
retention is--I talked to the Air Force chief, retention for 
pilots is down. It was 29 percent. It is 33 percent. A lot of 
factors go into that. But where you are deploying more than 
during the Vietnam conflict with your active duty military and 
you have got the family separation, things like having 
malpractice suits, those are the things that resonate among the 
people, the men and women that are overseas, knowing that their 
families have got to face this. I know when my wife was in a 
hospital, she had a nurse come in and stab her four times 
before she got the right blood thing. Those kind of things. All 
the different ones I had had and all the proper care didn't 
matter when it came to one nurse stabbing my wife four times to 
get blood. That is what I remember. I remember the good things, 
too. But I want to let you know that we appreciate that as 
well. I know even aftercare.

                               SUBVENTION

    But there is another concern out there that I hear every 
single day back in my district, and I bet that the chairman, 
from both sides of the aisle, the veterans feel that we have 
not lived up to our responsibilities. The subvention, when I 
first came to Congress in 1990, Duke Cunningham didn't write 
the subvention bill. The veterans in my district, George 
Stevens and a whole group of folks like that got together, 
multiservice, and wrote the first subvention bill, made changes 
all the way through. This was back in 1988 before I ever came 
to Congress. They just handed it to me, I didn't write it, to 
see if I could push it. Here it is 1998, we are just now 
getting it started, but we have a long way to go. Subvention is 
not the wherewithal answer.
    I know HMOs, there are people who love them, people who 
hate them. TRICARE. But where you have got doctors leaving the 
State of California because of HMOs and reimbursement problems, 
we have got to work together on this specially for military. I 
won't belabor it.
    I just wanted to make a statement that I am very happy. I 
had a 7-hour operation, my thyroid taken out last year. Man, I 
tell you, you talk about good docs and good things, I want to 
thank you, but we do need to knuckle down and work on these 
problem areas, because they relate to retention, and they also 
relate to, I think--I would make one partisan statement. When 
you look at these cuts in veterans and military, I think the 
President's budget is wrong. I think his priorities are totally 
wrong. One hit in here I would take a look at, where you have 
something like $529 million increase to the Sheriff of 
Nottingham, IRS, and then you cut other things, and here is a 
whole list of the things that increase in spending in the 
President's budget. It just doesn't equate to people that have 
served this country honorably, risked their lives and their 
families and the sacrifices they have made. That ought to be a 
priority and more of a priority. I know you have nothing to do 
with that here.
    Dr. Martin. You don't mind if we skip that question, sir?
    Mr. Cunningham. No, I don't. But I just want to thank you 
and thank the members of this Committee. Mr. Chairman.
    Mr. Young. Thank you, Mr. Cunningham. Mr. Visclosky. He is 
the most patient member of this subcommittee, by the way.

             QUALITY OF HEALTHCARE FOR MILITARY DEPENDENTS

    Mr. Visclosky. Dr. Martin, something you just said really 
struck home with me, talking about your children. One of my 
sons is 11 years old as of today, and Timmy is 7. My great 
concern here is the confidence the personnel have in going to 
the centers. Recognizing that the overwhelming amount of care 
and the procedures taken and the outcomes are very good and 
very favorable, I do think that if you are in the military 
services, you ought not to have to face additional concerns 
about health care for your family. If I send my 7-year-old kid 
in, let alone my spouse or myself, what kind of care am I going 
to have? It is clear from your testimony all of you gentlemen 
understand that. I just feel compelled with two boys of my own 
to make that statement, that I think there is a clear urgency 
here.
    Dr. Martin. I think, Mr. Cunningham, that you were saying 
the same thing. When our people are deployed, like they are 
now, in the Gulf, or in Korea or wherever, the thing they worry 
about is how their families are cared for. They want to make 
sure that if something bad happens to the family, the care and 
treatment they need will be there and bad things can happen. 
Nothing can be as devastating as that circumstance. It boils 
down to how people are treated. The whole issue, can you get an 
appointment. When you do get an appointment, do people care 
about you. There are a lot of those pieces. If you are worried 
that your family isn't going to be taken care of when you are 
gone, you become a lot less effective warrior.
    I think those points are absolutely central to why medical 
consumes such a large part of the Department's concerns right 
now. It ends up being tied to everything else. Every chief can 
talk about medical. Every commanding officer out there talks 
about medical. It is a big deal. This is a major part of the 
quality of life concern that they don't want to see eroded.
    General Roadman. I absolutely agree with that. When I talk 
about the inverted pyramid of not having folks that are taking 
care of people in continuity, Mr. Cunningham, as you talked 
about flight surgeons, that is someone who followed you, knew 
you, knew your family, knew the things over time.
    It is absolutely critical, I believe, for us to get to an 
impaneled primary care provider so that when people are sick, 
they know who they go to; that when they go to the clinic, it 
is not the first visit for the sixth time, it is actually their 
sixth visit. So as you talk about confidence, that is the art. 
What we have got to get to is a very broad base where we have 
primary care providers who are following people in continuity, 
and then the confidence goes up. It is really a bonding between 
patients and their providers.
    So I think we are--we agree with you absolutely, and we are 
in the force molding approach to fix that. I will tell you, I 
don't think that we can fix that confidence issue until we do 
remold the shape of the pyramid. We are all doing that as fast 
as we can.
    General Blanck. In fact, if I may, I couldn't agree more 
with everything that has been said. I appreciate and understand 
very much Mr. Hobson's questions. Mr. Dicks' outrage, I think, 
speaks volumes, and we are all trying to get at that. Part of 
what this report card and all the other things that we have 
said, the pyramid, the primary care providers getting at it.
    But I have to make a statement about something, Mr. Hobson, 
you said. You were quoting. That is, the military is a magnet 
for bad doctors because indeed that was a charge made, with 
some truth to it, in the past. Let me absolutely assure you, 
and I do so on behalf of all of us, that that is no longer 
true. To the degree it ever was, it certainly is not true at 
all now.
    For example, last year we got in the Army all of our 
graduates from the Uniformed Services University of the Health 
Sciences, quality school, quality graduates; secondly, from the 
finest United States medical schools through the Health 
Profession Scholarship Program. That is where we get them. Off 
the street, we took one carefully screened, highly qualified 
specialist to make up in an area where we didn't have anyone 
in-house. But one. Sometimes it is five, sometimes it is three.
    My point is where we get them, and we have the training 
responsibility and the oversight responsibility, I will tell 
you, there will be no more of some of the doctors you have 
asked about in our system. That gets to the quality that I 
think we have been talking about, and that is assurance and 
confidence.
    Mr. Young. If the gentleman would yield.
    Mr. Visclosky. Absolutely.
    Mr. Young. In the event that one of these doctors we are 
talking about leaves the service and applies to serve in 
TRICARE or with CHAMPUS or with one of the other systems, do 
you have a way to determine that person's capability?
    Dr. Martin. Yes, sir. There are basically two rules. If 
they are a member of the TRICARE networks, we expect our 
contractors to screen the National Practitioner Data Bank, to 
review it, and, in fact, they are clearly expected not to allow 
physicians with previous problems, and certainly ones that had 
problems with us, to serve in any of the networks.
    Now, CHAMPUS is different by statute. CHAMPUS basically 
says that any doctor who wishes to participate in CHAMPUS and 
who has a current State license may practice, so that when we 
talk about the indemnity program, where people go to whatever 
doctor they want, the way the current statute is written, we 
have no current legal authority. If you have got a good license 
in the State of New York, to put it very bluntly, to use the 
case we were talking about, if you wanted to go to a particular 
OB-GYN that we got rid of in New York, under standard CHAMPUS 
you could go to that doctor legally. In one of our networks, 
our network contractors would not allow that doctor to 
participate.
    I wanted to add one thing to Mr. Visclosky's focusing in on 
the quality, with children especially. It hasn't been stated, 
and I am surprised Mr. Hobson hasn't already raised it.
    Mr. Visclosky. I want to follow up on the Chairman's 
remarks because I think he brings up a good point. During my 
service on the Treasury-Postal Subcommittee, there was a 
difficulty in matching up the names of physicians who had been 
convicted of fraud and then being able to come back and collect 
payment under Federal health insurance. It took 18 months of 
beating agencies up, because they said it wasn't possible, 
through whatever system they had, to match these names up, to 
now do that. I think that is an absolutely important point as 
far as everybody involved in that system, is that those people 
are on that network so they are known.
    The other question that I think goes to the issue of 
confidence is the issue of blood supply. I don't want to ask a 
specific question about Bethesda Naval Hospital. My 
understanding is the FDA regulates blood supplies. I assume 
they do that for all of the blood supplies in the military. 
Have they issued any unsatisfactory reports in the last 3 
years?

                             BLOOD SUPPLIES

    Dr. Martin. We have had no report on a donor center. There 
are two things that they do. They check our transfusion 
services, where we have had no substantial complaints about 
noncompliance. The donor centers are the ones that actually 
collect and dispose of the blood. That is where we have the 
difficulty. In many--well, I would say in almost all the FDA 
evaluations as a part of their regulatory process, they 
identify areas for improvements to be made, whether it is us or 
the civilian sector. In other words, it is very rare for the 
FDA--or for that matter JCAHO--to go into a facility that they 
don't identify some numbers of things that need to improve.
    The difficulty in this particular case which made it 
exceptionally different than any experience we have had in the 
last 3 or 4 years, was the scope of the deficiencies all in two 
areas, staff and their training. It was seriously problematic, 
and gets to numbers of people and issues like that. But equally 
importantly, it addressed the whole issue of not using the 
appropriate automated systems. One of the reasons it was 
stopped, was that they were not even following our own rules in 
regards to maintaining this automated information about 
tracking all these units of blood.
    Mr. Visclosky. Doctor, what I would ask, is if there was a 
substantive issue that was raised by the FDA with any of the 
blood supplies during the last 3 years? If you could answer 
that for the record, I would appreciate it.
    Dr. Martin. Certainly. I will do that. The fairest thing to 
do is to go back to the Food and Drug Administration. I will 
simply ask them, and they will be able to assure us directly if 
there were any other cases. There is no question about the 
Bethesda case.
    [Clerk's note.--The information was not provided for the 
record by the Department.]
    Mr. Visclosky. The final question I have is on your centers 
of excellence, HCFA apparently is starting a procedure as far 
as identifying private institutions. Is your effort patterned 
after that; are you working in conjunction with that?
    Dr. Martin. Actually we started the STSs 5 years ago. I 
think we are probably at best in parallel. The Department of 
Veterans Affairs is doing the same thing. For very specialized 
procedures, payers--and we are a payer--are looking to the 
differences in outcome. Where you have big centers that do a 
lot of certain procedures, and have highly skilled medical 
staff and other staff, the outcomes are better. So I think we 
are all moving in parallel. I think the first group to do this 
was Prudential, in 1989. They began to say, we will only pay 
for certain procedures if they are performed in one of these 
high-quality centers. That is exactly the model we are 
following.
    Mr. Visclosky. Thank you, Mr. Chairman.

            UNIFORMED SERVICES TREATMENT FACILITIES (USTFS)

    Mr. Young. Thank you, Mr. Visclosky.
    Mr. Dicks mentioned in passing USTFs, and I did earlier in 
my earlier statement. Let me get into the question of USTFs and 
how they fit into the overall problem we are facing with 
TRICARE, Medicare subvention, CHAMPUS, as they relate to each 
other. We have 10 USTFs, if I understand correctly, in 
different parts of the country. They do under contract with the 
Defense Department take cases or take contracts with people who 
are eligible. Let me read off several questions, and then just 
respond generally if you would.
    There has been some trouble integrating USTFs into the 
system of TRICARE providers. I am wondering how this 
relationship has changed as TRICARE advances. Do USTFs abide by 
the same guidelines and rules as other TRICARE providers? Are 
they the same? Are they different? Is there a difference in 
cost per beneficiary?
    Some USTFs believe that they should be able to enroll as 
many military beneficiaries as would like to enroll with them. 
I would like your view on that. Some USTFs believe they should 
have a specific appropriation, I would like your response on 
that. And what is your current estimate regarding the amount of 
double billing that might be going on, and will that continue 
with the implementation of TRICARE? And if so, how can we avoid 
the costs?
    Can you answer that all in 30 seconds?
    Dr. Martin. Maybe 30 seconds each.
    Mr. Young. Just kidding.
    Dr. Martin. In regards to integrating, the USTFs were 
originally the old Public Health Service hospitals. They were 
given special legislative protection or language, so they were 
completely independent from the entire system with a separate 
appropriation. It was Congress that made the decision to begin 
to make them a part of the military health system.
    Very frankly, 3 or 4 years ago, and I think the USTFs would 
tell you this as well, there was very little effective dialogue 
or cooperation between the Department and the USTFs. It was 
very bad. Lots of you got lots of letters. Whether it be 90 
percent or 95 percent, there has been extraordinary progress 
moving toward making them a part of our system. We sat down 
with the USTFs and came up with an agreement that all of us 
signed, a legislative proposal all of us signed up to, and 
those are the documents that we are operating under. The 
overwhelming problems of being separate and unrelated have 
largely been solved. But we still have some problems.
    Fundamentally, they do follow the same rules. Certainly in 
areas like quality they have been incorporated into our overall 
system. Most of the differences had to do with differences that 
are associated with how they are designed differently. These 
are almost born out of necessity, because they are not the same 
as our direct care system and not the same as our contractor. 
But the overwhelming predominance of how we approach them is 
with the same set of rules.
    The issue of cost per beneficiary has been a contentious 
issue for some number of years. The Congress asked GAO, IDA and 
the Congressional Budget Office to do independent studies, 
because you got different answers from us and the USTFs. We 
provided copies of those studies to your staff today.
    For Medicare eligible individuals, there is a dramatic 
difference. In USTFs, we pay full cost for what otherwise 
Medicare would pay. One of the things that all three reports 
say is that for each Medicare individual who signs up in a 
USTF, the DOD appropriation ends up paying what Medicare 
otherwise would pay for.
    For active duty dependents, the costs are much, much 
closer. First, we negotiate rates, and second we pay for the 
overwhelming bulk of our active duty dependents either inside 
our system or through CHAMPUS.
    With retirees, it is sort of in-between. To the extent 
retirees--who we pay for--sign up with the USTFs, even though 
they are somewhat more expensive, the costs are at least 
reasonably within the range. For those who sign up and would 
have had some other type of coverage, now we are paying for 
their care when previously we didn't. I think all three reports 
lay that out.
    By the way, the differences in costs are in the hundreds of 
millions of dollars. For Medicare-eligibles you are talking 
about $130 to $150 million that would have been paid by 
Medicare. But with the USTFs, now your committee is paying for 
those individuals instead of the Medicare program.
    In regards to enrollment, what we have tried to do is to 
continue reasonable growth of the USTF program, particularly 
for people who are relying on us. Our current policy is if you 
are a dependent of active duty, and you want to sign up with a 
USTF, that is automatically okay. We just allow that. We are 
much more reluctant----
    Mr. Young. Some of them are of the opinion that you have 
put a cap.
    Dr. Martin. Not on dependents of active duty. There is not 
a cap in numbers of people, but there is a cap in numbers of 
dollars. The USTFs used to have an appropriation, this 
committee used to give it an appropriation. I think it was in 
the 1996/1997 time frame. It became obvious that it was going 
to cost more than you had appropriated to get through that 
year. So we all agreed that we would no longer have a line item 
appropriation.
    For the record, the USTF program actually has continued to 
go up. In fiscal year 1996, it was $315 million; in 1997, it 
was budgeted at $335 million. We spent $343 million, which is 
more. In 1998, the budget was $341 million. I anticipate this 
year we will spend $366 million. For fiscal year 1999, the 
budget is proposed to be $380 million.
    The difficulty with fiscal year 1999 is very simple. If I 
spend more money in the USTF program, I will be forced to take 
the money out of the direct care system. We don't print it over 
there. Our expectation is very clear. The program still is 
increasing. We will work with USTFs about fully expending our 
targeted appropriation, but we cannot have open enrollment 
because if the added costs are 30 or 40 or 50 million extra 
dollars, I have to take it out of our military hospitals, which 
I can't afford to do.
    By the way, if we had an appropriation for fiscal year 1996 
to date, I would have spent about 40 million less dollars this 
year than I did last year. So on the one hand, I think it is 
not a good idea with an integrated system to have a set-aside. 
But it might not be a bad idea to have a set-aside if you want 
to contain the costs in USTFs.
    In regards to double billing, which, by the way, is not the 
primary problem with USTFs. In fairness, the problem is that 
HCFA, Medicare, is double paying. It is essentially a 
continuing problem between two Federal agencies. We have not 
been very successful in getting Medicare to help us on this. So 
they continue to pay bills for patients for whom theoretically 
we are completely paying. But if you are a USTF, and the 
patient is submitting independently a bill to Medicare, there 
is no way you can know that. So if somebody needs to be dinged 
on that, it is the two Federal agencies.
    I am optimistic about the continuing evolution of the USTFs 
within our system. They are important institutions, but we are 
still at the phase where we are wrestling with their size and 
how much money is going to be allocated to them. I am 
optimistic that is going to get sorted out. I think the idea of 
a fair increase from the 1996 base ought to be looked at by the 
committee. But the idea of it being cheaper or the same costs, 
the independent reports clearly say that is not true.
    Mr. Young. I would like to ask Mr. Hobson to assume the 
chair since this chairman has a commitment with the Judiciary 
Committee 7 minutes ago. If that is all right, Mr. Hobson, if 
you would. Thank you very much.
    Dr. Martin. Thank you, Mr. Chairman.
    Mr. Young. I thank all of you for a very good hearing.
    Dr. Martin. I was hoping now that you had moved to the 
chair, you would adopt Mr. Young's demeanor, his very sensitive 
and thoughtful approach to us.

               HEALTHCARE COMMITMENT TO MILITARY RETIREES

    Mr. Hobson. Let me start by saying, the whole goal in this, 
and I think you have all understood this, is that we want to 
get the best medical care that we can for our service people. 
We want to be cost-effective about that. Again, I want to say 
that your attitude, and I know we have got some short-timers 
here, has been very good in this. I hope we are sending some 
strong messages, just as you are, and in the end that we are 
all going to come out with better health care that we are more 
confident about and better systems and procedures than we have 
had in the past.
    I am concerned about, as I look at that brochure, are we 
still making those promises? Nobody said that when we talked 
about it before.
    Dr. Martin. I think officially the Department's personnel 
community, which is largely responsible for recruiting, 
recognized this issue and changed the physical documents since 
1992 or 1993. It is nonetheless fair to say that the idea of 
what the benefit package is, including health care, continues 
to be addressed as one of the quality of life issues and one of 
the retention issues, particularly for reenlistments.
    Mr. Hobson. I have a lot of military retirees in my 
district. As you get older, and I can say this since I am a 
little older, the only thing you remember about reupping was 
health care. It had nothing to do with anything else. It was 
all health care.
    Dr. Martin. And each year that goes by, you remember that 
more vividly.
    Mr. Hobson. I understand that.
    I am going to go back and let you talk about your children, 
which was part of your thing.
    Dr. Martin. It really fit in. One of the things 
particularly Mr. Hobson has been pushing very hard for us to 
come up to is the ultimate requirement that we develop some 
kind of computerized patient information system, to really 
provide quality of care. There are bunches of pieces of quality 
of care. The one thing that is frankly lacking from most 
systems now, and is clearly lacking from ours, is an automated 
record. Not only for our active duty members, but for all 
patients. General Blanck spoke to one component of that, which 
is the personal information carrier. Admiral Koenig talked 
about the idea of what telemedicine can do reaching out. These 
should all be linked to one record system.
    The fact of the matter is that for both our active duty and 
our dependents, we depend on a record system that is the same 
kind we had in the 18th century. You have these huge hand-
written records. As a practitioner, one of the Surgeons pointed 
this out, it means when you come in to see a patient, if it is 
the first time you have ever seen the patient, you have got to 
wallow through this big record. It is like it is the first time 
you have ever seen the patient. That puts the patient and the 
practitioner at a disadvantage. It is less effective. More 
importantly, it is less quality.
    One of the things that the committee has been pushing us to 
do and now has been adopted by the Secretary as one of our 
major initiatives, is to move to a computerized patient record. 
We are going to do it with DVA so we can move our information 
to the Veterans Affairs Department. We are in the process now 
of jointly procuring such a system. In fact, the State of 
Louisiana has joined--Mr. Livingston might be interested in 
that--in this joint endeavor that we literally have on the 
street to find what is available commercially, what is the best 
out there, stop developing it and move ahead.
    Mr. Hobson. This is a wonderful, positive change, I think, 
overall. I think hopefully you are right on the cutting edge of 
this, and other people are going to look at you just like 
Louisiana is. We may have to go over that and come back, but 
since this is my one chance to be in the chair, and I don't 
think the way things happen I am ever going to get this for a 
long time, there are a few questions that I need to ask you. 
One is the Sierra Health Services TRICARE contract.
    Dr. Martin. Yes, sir.

                        TRICARE CONTRACT AWARDS

    Mr. Hobson. There has been some concern about the recent 
award of a $1.3 billion contract to Sierra Health Services, a 
Nevada-based company. Concerns stem from two matters that have 
received attention since the contract was awarded. First, in 
1991, the CEO of Sierra Health Services, Dr. Anthony Marlon, 
was convicted of fraud in connection with a contract to provide 
health care coverage to Federal employees under the Federal 
Employees Health Benefit Plan. The U.S. Attorney's Office in 
Las Vegas, Nevada, determined that he had made false, 
misleading statements to the government, pleaded guilty to 
false information, was sentenced to 24 months probation and 
fined $25,000.
    Second, after the award for region 1 was announced, Dr. 
Marlon was quoted in the Las Vegas Review Journal stating, one 
of the reasons we submitted a bid, quite frankly, is we have no 
business on the East Coast, and the government will fund our 
expansion. He went on to say, if it costs more to treat the 
CHAMPUS beneficiaries than it is anticipated, the government is 
going to pick up the 80 percent of the cost overrun.
    There has been some concern about the fact that DOD awarded 
the $1.3 billion contract to Sierra Health Services, where the 
chairman was convicted of fraud in a Federal contract. Number 
one, does this concern you? Is it consistent with 
administration efforts to crack down on health care and 
Medicare fraud? And why should DOD award a $1.3 billion 
contract to a company that has been convicted of defrauding the 
Federal Government?
    I am also concerned about his statements of expansion. He 
stated in the article that the government would incur all or 
most of the risks of a cost overrun. I think this should 
disturb us. I would like to know if it does you.
    Particularly in mind that Sierra's winning bid was so low, 
do you think Sierra's proposal was too low?
    I understand the Sierra award has been protested. What is 
the nature of the complaint? And is it routine?
    Dr. Martin. First, going to the quotes in the paper, which, 
in fact were quotes, and we were deeply disturbed. Rather 
quickly I met with Dr. Marlon, I can assure you of that. 
Subsequently he printed a retraction saying that, it was not 
only inaccurate what he said, but also in regards to the loss 
corridors and how contracts operate, those statements were just 
simply not true. The fact is that there are shared risks 
between the government and the contractor, and that Sierra 
would take very substantial financial losses before we started 
to lose any money. That is just a statement of fact.
    In regards to the current protest, the basis of the protest 
is not these other items, but more--as I think Mr. Young or Mr. 
Murtha asked earlier--the question of the process that we use. 
The basis of the protest is that we continued to do what we did 
with the other contracts and didn't change our process.
    The question about the previous legal problem of Dr. Marlon 
ended up being a legal issue for the Department. Within the 
current statutory framework, the Office of General Counsel--
this is not the doctors who made this decision, it was the 
lawyers--decided that within the current statutory framework, 
Dr. Marlons legal problem could not be a consideration for this 
particular award. Once that decision was rendered, we treated 
the contract process as we normally would have.
    But I can assure you, and Dr. Marlon would tell you if he 
were here that we have had some fairly candid discussions about 
his quotes in the newspaper. As far as I was concerned, they 
were unacceptable, and I told him that.
    Mr. Hobson. I want to ask you about region 2 and 5.
    Dr. Martin. Yes, sir.
    Mr. Hobson. Anthem Alliance was awarded a $3 billion 
TRICARE contract to provide health care services for region 2 
and 5. The contract was protested. GAO made a preliminary 
ruling against Anthem Alliance. Final determination has not 
been made. Can you talk about the protest? Which company 
protested? Is there anything unusual about this? When do you 
expect GAO to make the final decision? And how long will 
TRICARE be delayed if the protest is upheld? And if your answer 
is shorter than my question, I have only got one more. Then you 
will have to come back.
    Dr. Martin. Both losers filed a protest. Every single one 
of our major contracts has been protested. It is not new. The 
basis for the protest was the process by which we gave certain 
rankings and the process by which we gave credit for certain 
parts of the procurement. That was the basis of the GAO 
determination, which currently is a recommendation.
    The Department is making a judgment of how it will proceed. 
Ultimately it is the Department or the courts that will make 
the final judgment, but that is being discussed in the Office 
of General Counsel as we sit here today.
    Mr. Hobson. I actually have two things. I want to make the 
one a statement. I really have a problem with the dependents 
injured by malpractice if they are overseas. I think they ought 
to have the same redress as people here. I guess very quickly, 
do you think the code should be amended so that we treat people 
the same overseas as we do here?
    Dr. Martin. There are two issues. The Feres Doctrine is 
purely a legal active duty issue. But on this particular issue, 
our opinion, not being lawyers, just as physicians, we believe 
our dependents ought to be treated the same way wherever they 
happen to be assigned. And there shouldn't be two----
    Mr. Hobson. I will probably be doing something on that.
    Dr. Martin. We would be delighted to have general counsel 
visit with you in regards to that.

                            NAVY BLOOD BANK

    Mr. Hobson. The last question I have relates to the Navy 
blood bank. According to the Washington Post, after 3 months 
investigation, Food and Drug Administration, and I don't know 
if this is correct or not, forced the closure of the Bethesda 
blood bank due to quote sloppy management practices and rampant 
bookkeeping errors that sent suspect blood into the military 
blood supply, including units not thoroughly tested for the 
AIDS virus, unquote. Among other things, the FDA reported that 
two patients receiving transfusions received the wrong type of 
blood last year. The FDA also reported that 126 units of blood 
were left in the blood bank even though they had not been fully 
screened for the AIDS virus. The mistake was not noticed for 
nearly a year, and 33 units of blood remain unaccounted for 
today.
    Admiral Koenig, what happened that caused the closure of 
the blood bank at Bethesda Naval Hospital? Two, why did it take 
the FDA to identify and uncover the serious management problems 
that were there? And why didn't the commander of the hospital 
and the senior staff know about these problems? What has been 
done to correct it? I have got to go see a naval guy this 
afternoon to get some things taken off my face here, so I am a 
little worried about asking those questions. But I think it is 
important----
    Admiral Koenig. Hopefully you won't need a transfusion for 
that.
    Mr. Hobson. Definitely not after this.
    Admiral Koenig. We have been concerned about problems 
there, so we asked the FDA to come in. All the donated blood 
was tested for AIDS. There are now tests that can be done in 
addition to. There is the antibody test, the antigen test. 
These donated blood units had all been tested with the antibody 
test. Those 126 units, if we went ahead and tested them with 
the new antigen test, the likelihood of finding a positive is 
very close to zero. Despite the low probability of a positive 
test finding all these concerns real. That is why we asked the 
FDA to assist. We voluntarily shut down the blood bank. The FDA 
didn't tell us to.
    Dr. Martin. The blood donor center, not the blood bank.
    Admiral Koenig. We shut down the blood donor center at 
Bethesda without the FDA telling us to because we were aware of 
the problem.
    Mr. Hobson. Do you plan to reopen this?
    Admiral Koenig. Eventually, after we are totally satisfied 
that that blood donor center is operating properly. We think it 
is going to take a minimum of 6 months to get it back to where 
it should be.
    Dr. Martin. For the record, although I won't be here, there 
is a proposal to consolidate into one our three donor centers 
in the national capital region. There are two questions. Number 
one, should it be reopened at all, which Admiral Koenig's 
people are now considering. Then the second question, one that 
the three Surgeons need to work on with health affairs, is why 
do we have multiple donor centers in proximity in a geographic 
area?
    Admiral Koenig. I can say all three of us basically feel 
that way. The services we are working so closely together on 
everything now, we question why are we running three separate 
donor programs; why don't we just run one?
    Mr. Hobson. One of the things that has come out of this to 
my satisfaction is you do seem to be working better together, 
and you do seem to have better leadership than you have had 
before.
    The one thing I want to say in the end, I think this is in 
the best traditions of our country. The media came out, and 
instead of people denying it, the media, we looked at it, you 
guys looked at it, we said, hey, we have got problems here, we 
have all tried to work together. I think as a result of that, 
we have got some good improvement for the people of this 
country. I think that is the best attitude, I hope.
    I am really concerned that some of you are leaving. My rule 
about short-timers, in doing it, but I hope you leave a legacy 
that the next people come in realize that by working together, 
we can move forward better than just getting in fights over 
this stuff, because I think--I am really excited about some of 
the things that we are doing now. We have just got to keep 
those going.
    I want to thank you all for working with this Committee in 
the manner in which you have done. It is in the best traditions 
of this country. Thank you, gentlemen. The Committee is 
adjourned.
    [Clerk's note.--Questions submitted by Mr. Lewis, and the 
answers thereto follow:]

                               Readiness

    Question. General Blanck, I have a question that involves 
Readiness. Your predecessor, General LaNoue, had indicated in 
congressional testimony on several occasions that his number one 
problem in readiness was ``Clearing the Battlefield.'' Would you 
elaborate on what that means and tell us what the Army has done to fix 
this problem?
    Answer. Clearing the battlefield refers to the acquisition, 
doctrinal treatment and medical evacuation of combat casualties, 
disease, and nonbattle injuries from anywhere on the battlefield to 
definitive care. The Army and Air Force have approved the use of C-130 
aircraft to evacuate within the Division Rear areas. The Army has also 
approved operational requirement documents for an aeromedical 
evacuation version of the UH60 helicopter (UH-60Q), armored medical 
evacuation vehicle and armored medical treatment vehicle to meet the 
need. The UH-60Q is nearing the end of the integration and 
qualification phase of its program and will be ready for a production 
and fielding decision as early as first or second quarter fiscal year 
1999.
    Question. The Congress has provided funding to buy several UH-60Q 
MEDIVAC helicopters over the last couple of years. How important is it 
that we continue to provide Congressional plus-ups to this program?
    Answer. The Congressional plus-ups have proven to be very important 
for the UH-60Q program. The initial funding paid for the integration 
and qualification phase of the program and will produce four UH-60Qs 
based on the UH-60A airframe. The congressionally provided fiscal year 
1997 funds, together with funds provided by the Project Manager, will 
produce four more modern medical evacuation aircraft and will qualify 
the UH-60Q mission kit on the UH-60L airframe. The Army Office of the 
Deputy Chief of Staff, for Operations and Plans has tentatively planned 
for these aircraft to be fielded to the 50th Medical Company at Fort 
Campbell, KY; one of our highest priority units. Fiscal year 1998 funds 
will be spent as directed, to procure UH-60Q mission kits. These kits 
will be used as contingency stock to reduce risk of UH-60Q specific 
spare parts stock-outs during the first year or two of operational 
employment. The plus-ups have also assisted with closing the production 
gap in the POM and provide enhanced capability in the near term to a 
limited number of units.
    Question. What is the Army doing to fully fund this program?
    Answer. Funding for the UH-60Q program begins in fiscal year 1902 
and extends to fiscal year 1928 under the current Army modernization 
strategy. While this schedule doesn't modernize the MEDEVAC fleet as 
quickly as the AMEDD would like, it does provide the basis for eventual 
modernization within programmed Army resources. The Army has 
prioritized the UH-60Q along with its other high priority needs.
    Question Do you think the Army could buy four or five less tanks to 
help solve this problem of clearing the battlefield?
    Answer. The current budget reflects the Army's priorities. Any 
realignment of funds would need to be associated with a corresponding 
change in these priorities. This is an issue the Army Staff should 
address. The UH-60Q is urgently needed to address medical battlefield 
deficiencies and priorities.
    Question. How many would be enough this year if funding was 
available?
    Answer. Currently the Army Force Structure requirements are for 357 
UH-60Q aircraft. Until the Army can begin and maintain full production 
of the UH-60Q program the Blackhawk Program Manager cannot 
realistically support the production of more than eight UH-60Qs in 
fiscal year 1999. These eight aircraft could complete fielding of UH-
60Qs to the medical company at Fort Campbell and provide an orderly 
ramp-up from the four produced with the fiscal year 1997 funds.
    Question. I have recently learned that there is a new technology 
which would eliminate bacteria and viruses, like the AIDS virus, and 
hepatitis from blood used for transfusions. I am told that this 
technology is being tested in Europe and in this country under FDA 
approved protocols. It would no longer require us to rely on routine 
testing to ensure a safe blood supply.
    Are the Services aware of or supporting any research into 
technologies to decontaminate blood products so that the safety of the 
blood supply will not be totally dependent on testing and vulunerable 
to the kinds of problems which occurred at the Navy Blood Center?
    Have you consulted with the FDA and or the private sector to 
identify any such technologies which might become available in the near 
future? I would like to see you do that, and get back to me regarding 
what efforts are being made to develop these technologies as rapidly as 
possible.
    Answer. The Navy is not aware of the specific technology you 
reference that is being used in Europe other than solvent detergent 
plasma. The FDA is currently reviewing the Solvent Detergent Plasma 
technology for lipid encapsulated virus inactivation. This technology 
will not eliminate the risk of bacterial contamination or non-lipid 
encapsulated viruses (i.e., hepatitis A and parvovirus B 19). The 
Department of Defense is currently pursuing a contract with the 
distributor of the solvent detergent product to make it available in 
all its medical treatment facilities when the product is finally 
licensed. If approved by the FDA, it is highly unlikely that the FDA 
will eliminate viral marker testing.
    The Navy continues to support research and development in the area 
of viral inactivation and is currently limited by financial 
constraints.

    [Clerk's note--End of questions submitted by Mr. Lewis. 
Questions submitted by Mr. Skeen, and the answers thereto 
follow:]

                          Medical Malpractice

    Question. In response to various news media articles that bought up 
the problems related to medical malpractice, could you provide for the 
Committee an explanation of the Department's reactions to these 
problems and explain the extent to which the Defense Department is 
fiscally liable for damages related to these malpractice incidents?
    Answer. The articles cited cases of poor outcomes and questioned 
why some of these providers hadn't been reported to the National 
Practitioner Data Bank in addition to the fact that some of them held 
``special'' Oklahoma licenses. DoD has accepted the criticism and used 
it as an opportunity to improve. The reporting and licensing issues 
surrounding the articles have been evaluated and action is being taken 
to address these problems.
    The Risk Management Committee has been established, as previously 
mentioned, to monitor and improve the risk management process by 
providing a forum for communication and information sharing. Membership 
includes Health Affairs, the Services Quality Management Division head/
risk managers/general counsel, Department of Justice, and the 
Department of Legal Medicine/Armed Forces Institute of Pathology. 
Indicators such as the number of malpractice payments, the number of 
reports submitted to the National Practitioner Data Bank, timeliness of 
reports, and backlogs will be monitored.
    The External Peer Review Agency has been established to review 
cases where a malpractice payment has been made and the Surgeons 
General has determined the standard of care was met or it was a system 
problem. This will provide a check and balance to the process as well 
as confirmation of the validity of the process.
    Providers with ``special'' Oklahoma licenses have been removed from 
patient care or practice under the supervision of a license physician. 
Providers have been given until April 1999 to obtain an unrestricted 
license from Oklahoma or from another state. Policy memorandum 
``Management of Medical Licensure & Modifications of Reporting 
Procedures Regarding the National Practitioner Data Bank'' was signed 
and promulgated February 3, 1998 stating that all DoD healthcare 
personnel must take action to ensure they possess a current, valid, and 
unrestricted license.
    Compensation from the government is available for patients injured 
as a consequence of medical malpractice. For most patients, the remedy 
is under the Federal Tort Claims Act. Payments under this Act are paid 
primarily from the Judgment Fund, which is administered by the Treasury 
Department. The exception to this is that cases which result in 
payments under $2,500 are paid by DoD. In cases arising from torts in 
foreign countries, the remedy is under the Military Claims Act. In 
these cases, the first $100,000 of any case settlement is paid by DoD, 
with any remainder paid by the Judgment Fund. Finally, for active duty 
members, the remedy is under DoD disability compensation programs, 
payments for which are the responsibility of DoD.
    Question. To what extent has the care for Active Duty Members and 
Veterans been affected by these doctors?
    Army Answer. We are practicing quality care now. Additionally, we 
are taking steps to improve the current level of high quality and have 
taken steps to build confidence in our patients.
    Navy Answer. In general, given the ``hundreds/thousands'' of 
patients these providers have successfully treated in the military 
system, we do not feel the impact has been ``significant'' in terms of 
numbers. We are always concerned when a negative outcome occurs and, as 
previously mentioned, systems are in place to initiate corrective 
actions. Our primary goal is to continue to improve the services 
provided to all beneficiaries.
    Air Force Answer. Overall there has been minimal impact to the 
health care received by our beneficiaries.
    There are six Air Force Physicians currently on active duty who 
have the special Oklahoma Licenses. These six providers have not been 
involved in any medical malpractice claims. However, there is a 
malpractice history on two providers who held Oklahoma Special 
Licenses. The two providers were reported to the National Practitioner 
Data Bank and have since separated from the Air Force.
    On October 1, 1995, Air Force Instruction 44-119 included for the 
first time, guidance on management of providers who are named in 
multiple malpractice claims. If a provider is found to have deviated 
from the standard of care in two or more claims within a three year 
period of time, the Air Force Surgeon General's Office notifies the 
provider's current commander. The notification instructs the commander 
to review the practice of the provider, consider taking an action which 
may affect their ability to practice fully (adverse privilege action), 
and response back to the Surgeon General with their plan of action. 
This instruction is now part of the quality management program within 
the Air Force Medical Service.
    Question. Although we are only 12 days into the enrollment period 
for the TRICARE Retiree Dental Program would you comment on the 
progress of this program for the Committee?
    Answer. The TRICARE Retiree Dental Program (TRDP) became available 
on February 1, 1998. As of April 12, Delta Dental reported enrollments 
of retirees and surviving spouses at 128,372. This count is based on 
the number of enrollment units (i.e., single, two person, family) and 
not the actual number of individuals covered in instances where 
multiple family members are enrolled.
    Two of the biggest issues/complaints about the program are the 
scope of services and the limited eligibility for the program. By law, 
current coverage excludes procedures that would be of great benefit to 
retirees and their families (e.g., permanent crowns, bridges, and 
dentures). The Department has also received numerous complaints about 
the limited eligibility. Many retirees, who already have dental 
coverage or have dental appliances (i.e., dentures), only wish to 
enroll their family members in the TRDP. Presently, the law prohibits 
family members of retirees from separately enrolling in the TRDP if the 
sponsor is still alive. Further, the law currently excludes unremarried 
former spouses of retirees from TRDP eligibility.
    Question. I am concerned about the availability of health care 
providers in rural areas, such as New Mexico, and their participation 
in the TRICARE program. Would you provide for the Committee a listing 
of the TRICAprogram providers by community for the State of New Mexico?
    
    Answer. Attached is a list of the preferred network providers 
contracted by TriWest Healthcare Alliance, the managed care support 
contractor for New Mexico. One listing consists of those providers 
contracted under the TRICARE Prime option. The second listing includes 
those providers contracted as TRICARE Extra providers. The third list 
consists of those specialists contracted by TriWest to provide health 
care services to our beneficiary population.

    [Clerk's note.--End of questions submitted by Mr. Skeen. 
Questions submitted by Mr. Nethercutt and the answers thereto 
follow:]

                           Smoking Cessation

    Question. Tobacco smoking is estimated to cost the Department of 
Defense more than $900 million a year in health expenses and lost 
productivity. Last year the House Report urged Health Affairs to 
develop an effective smoking reduction plan that meets the Healthy 
People 2000 target. What progress has been made over the last year in 
the area of smoking cessation?
    Answer. The Department of Defense is a strong proponent of a 
tobacco free force. In addition to our focus on the active duty member, 
we seek ``healthy communities--at home and abroad, in peacetime and in 
war'', which also reinforces our commitment to family members and 
retirees. We have numerous effective programs throughout all the 
military services, to reduce the use of tobacco products. All of our 
TRICARE contracts, which supplement our military system, seek to reduce 
tobacco use. We are actively evaluating the effectiveness of our 
tobacco cessation and avoidance programs. We use the Worldwide Survey 
of Health Related Behaviors for Active Duty, and the DOD Annual 
Beneficiary Survey, which polls all beneficiary categories. The 1998 
results of the Worldwide Survey of Health Related Behaviors for Active 
Duty will be available in December. The 1997 DOD Annual Beneficiary 
Survey results will be available this summer. Questions include ``have 
you smoked 100 cigarettes in your entire life'', ``do you smoke every 
day'', ``how long since you quit smoking'', ``in the last 12 months has 
a health care professional given you advice on tobacco use cessation or 
avoidance'', ``do you use chewing tobacco.'' The DOD is preparing a 
Report to Congress, in June 1998, on the status of policies and 
programs for tobacco use avoidance.

                          Diabetes Management

    Question. Last year Congress appropriated $4 million for improved 
methods of diabetes detection, prevention, and care. We recommended 
that DoD work with the Veteran's Administration on this research and 
requested a status report by February 15, 1998. Will the Subcommittee 
receive this report on time and what is the overall status of the 
research project?
    Answer. The Department provided the report to the Committee on 
Appropriations, House of Representatives, on February 12, 1998. The 
report explained that the fiscal year 1998 Defense appropriation 
provided $4 million for this effort within the Defense Health Program 
(DHP) account. The Department's fiscal management policy required the 
funds to be reprogrammed from the DHP's health care delivery account 
into a research, development, test and evaluation (RDT&E) account. This 
action properly aligned the funding category with the research effort 
to be performed and also positioned the diabetes research program 
within the DoD organization responsible for oversight of all Defense 
science and technology efforts.
    The funds for diabetes research were reprogrammed into the Army's 
RDT&E account, and the diabetes research program is being executed by 
the U.S. Army Medical Research and Material Command (USAMRMC). The 
USAMRMC currently is reviewing for scientific merit a proposal for a 
coordinated research effort to be performed by Tripler Army Hospital, 
Hawaii; Department of Veterans Affairs facilities in Hawaii and New 
England; and the Joslin Diabetes Center, Boston, MA.

    [Clerk's note.--End of questions submitted by Mr. 
Nethercutt. Questions submitted by Mr. Dicks and the answers 
thereto follow:]

                            TRICARE Program

    Question. As you know, the TRICARE program in my area--Region 11--
has, after a few early bumps, become one of the real shining examples 
of how effective the TRICARE program can be. It is a tribute to the 
outstanding work of the Lead Agent in the Region and the excellent 
partnership they enjoy with six military hospitals and clinics in the 
area. It also demonstrates the benefits of a managed care program 
modeled after civilian managed care standards being managed by the 
military in partnership with civilian contractors.
    At the beginning of the contract enrollment in Region 11, it was 
projected that 49,000 beneficiaries would enroll in TRICARE Prime (the 
HMO option) by the end of the five year contract period. Even though 
that contract is only about halfway through that five year period, 
already 116,000 beneficiaries are enjoying the TRICARE Prime benefit. 
And all the surveys that have been done by the government and the lead 
agent show extremely high beneficiary satisfaction.
    Another goal of the TRICARE program is to maximize the use of the 
government investment in military hospitals and clinics. This has 
occurred in Washington State. The total number of beneficiaries 
enrolled at military hospitals now stands at 84,000, increasing over 
19,000 in the past year alone. This represents 72% of the Prime 
population.
    In short, the TRICARE program in Region 11 is saving taxpayer 
dollars, increasing access to medical care, and continues to improve 
customer satisfaction with military health care. I recognize that there 
are regions in the United States that are not enjoying the same level 
of success that we are experiencing in Region 11, but I would strongly 
urge the Congress and the DoD to see this program through. As I said 
earlier, there were difficulties associated with this program in Region 
11 early-on. But I believe that if we give this program the opportunity 
to work, the result will be a great improvement in the way military 
health care is administered and managed, will provide a higher rate of 
quality health care to the beneficiaries, and will save the Department 
a great deal of money over the long run.
    Can you give the Committee a general overview on how the TRICARE 
program is going nationwide?
    Answer. TRICARE has proven to be an effective model for a regional 
integrated health care delivery system. It has enabled the Department 
to provide better access to high quality care for more of our 
beneficiaries in a more cost-effective manner than the previous health 
care delivery modalities available in the MHS. Enrollment and 
reenrollment in TRICARE Prime continue to be strong, provider network 
turnover is low, and beneficiary satisfaction is generally high. In all 
of the mature managed care regions (health care delivery of over 18 
months), between 60 and 75% of targeted eligible beneficiaries have 
enrolled in TRICARE Prime, including active duty members. We look 
forward to the implementation of TRICARE in Regions 1 and 2/5. As you 
know, we faced challenges when we started work under our earlier 
managed care support contracts, however we overcame the ``growing 
pains,'' and expect to overcome any difficulty that may arise in our 
last two.
    Question. Do you intend to stick with the TRICARE Program in its 
current form in order to give the program an opportunity to work 
nation-wide as well as it is working in Region 11 and other successful 
areas?
    Answer. The successful components of TRICARE will, without 
question, be continued. However, we will be making enhancements to the 
program based on the lessons we have learned since its inception.
    Beneficiaries are very satisfied with the benefit structure and 
increased access they have to high quality providers. These core 
components of the program will not change except to accommodate 
advancements in medicine.
    Physicians have expressed concerns with the current program in its 
administrative aspects which, for the most part, are transparent to our 
service members and their families. Following Vice President Gore's 
lead, the Department will be modifying these administrative aspects to 
encourage the use of ``best commercial practices.'' Our expectation is 
even better access to care for our beneficiaries, reduced 
administrative requirements for providers, simpler administration for 
the Government and TRICARE contractors, and overall better service for 
everyone involved.
    We will not be changing those components of the program that are 
working so well in Region 11. We will be applying the lessons learned 
in Region 11 to the new contracts in an effort to continuously improve 
the quality of services provided through TRICARE.
    Question. Do you have enough money in your budget to successfully 
execute the TRICARE program?
    Answer. The Department's core medical program is adequately funded.

                Uniformed Services Treatment Facilities

    Question. Dr. Martin, you are aware of my long history of support 
for the USTF program. One issue you and I have personally discussed is 
my belief that DoD needs to provide some advance guidance each year to 
give each USTF facility a benchmark number of enrollees they can accept 
in the program with assurances that DoD will reimburse that facility.
    After our conversations in this regard, I was hoping that your 
office would provide that guidance to Pacific Medical Center (PMC) who 
is in my state and is currently conducting an open enrollment season 
for its new health program which begins on April 1. My understanding is 
that this has not yet happened.
    Although open season at PMC is well underway, I am told they would 
still greatly benefit from some guidance from your office.
    Have you made a decision on an enrollment level for Pacific Medical 
Clinics?
    Answer. The Pacific Medical Clinics and the Sisters of Charity 
accepted applications from as many beneficiaries as possible. The 
Department approved funding for everyone electing to enroll with the 
designated provider.
    Question. Why does it seem to take so long for DoD to provide this 
guidance to the USTFs.
    Answer. Both the government and the designated provider agreed upon 
specific terms and conditions. The contract allows the designated 
provider to accept applications from all current enrollees and allows 
for a 10 percent growth limitation per year, subject to availability of 
funds. The Department has not denied enrollment to any applicants of 
the designated providers. All enrollees were enrolled in a timely 
manner.

                            Gulf War Illness

    Question. Where do we stand both on treating those servicemen and 
women afflicted with symptoms associated with Gulf War illness and also 
coming up with a plausible explanation for the illness itself?
    Answer. The structured protocol of the CCEP is used to ensure 
comparability of evaluations and completeness. According to the 
Institute of Medicine, which reviewed the protocol used by DoD in the 
CCEP, ``the CCEP clinical protocol is a thorough, systematic approach 
to the diagnosis of a wide spectrum of diseases.'' A specific medical 
diagnosis or diagnoses can be reached for most patients by using the 
CCEP protocol. Those Gulf War veterans with diagnosed conditions have 
initiated appropriate treatment consistent with contemporary medical 
practice. Those Gulf War veterans with more complex conditions, ill-
defined conditions or symptoms receive additional evaluation and 
supportive care at the larger medical centers.
    The entire ongoing research effort is published in ``A Working Plan 
for Research on Persian Gulf Veterans' Illnesses''. This is a public 
document and contains a list of the projects related to Gulf War health 
issues. The outcomes of the findings from these research efforts are 
widely disseminated for clinicians in the medical literature.

             Life Support for Trauma and Transport (LSTAT)

    Question. Dr. Martin, last year, we added $4 million to the DARPA 
budget to accelerate the development of an innovative, portable 
intensive care system known as Life Support for Trauma and Transport, 
or LSTAT. The LSTAT, with its capability to provide hospital-grade care 
in forward battle areas, is bound to markedly improve your ability to 
handle and save many combat casualties. The development of this project 
has been the result of very effective cooperation between DARPA, the 
Army and industry.
    My colleagues and I are excited about the potential of LSTAT. 
Unfortunately, I have heard that the $4 million Congress authorized and 
appropriated have not yet been released to the Army. I don't understand 
this.
    Would you please check with DDR&E and DARPA to assure this 
subcommittee that the money will be released soon so that we can make 
LSTATs available to forces in the field as early as possible?
    Answer. The reprogramming action, DoD Serial Number FY 98-32 IR, 
was approved for implementation in accordance with established 
reprogramming policy on April 9, 1998. The reprogramming action 
transferred $3.844 million from Research, Development, Test and 
Evaluation, Defense Wide, 98/99 to Research, Development, Test and 
Evaluation, Army 98/99. This realigned funding from the Defense 
Advanced Research Projects Agency (DARPA) to the Army for proper 
execution.
    Question. I understand that the Army and DARPA, along with the Navy 
and Marine Corps have indicated great interest in the LSTAT system. 
Unfortunately, I have not heard how the Air Force regards the system. I 
would appreciate if you would provide for the record, an Air Force 
position on the LSTAT program.
    Answer. The Air Force Medical Service has evaluated the LSTAT and 
determined that it does not have an operational requirement f or this 
device at this time. We plan to provide this capability with patient 
move ment items that have already been approved by the Joint Services 
and programmed for purchase. We are concerned about the weight of this 
device, the volume, and the non-modular configuration. The device 
currently weighs approximately 130 pounds. This will limit the payload 
of some aircraft, require floor-loading in some cases (due to litter 
stanchion weight restrictions), and physically challenge medical 
personnel during litter bearing. The LSTAT's ``one size fits all'' 
configuration would necessitate our purchase of medical equipment 
beyond the requirements of most patients. We will continue to monitor 
the progress of this program to determine if further development of 
this device makes it suitable for Air Force use.

                        Force Health Protection

    Question. Can you give the subcommittee an overview of your efforts 
in the Force Health Protection (FHP) program?
    Answer. The Department is committed to Force Health Protection as a 
better way of protecting the health of our service men and women while 
providing the Nation with a healthy and ready military force. In August 
1997, the Deputy Secretary of Defense signed DoD Directive 6490.2, 
Joint Medical Surveillance, which formed the basis for many elements of 
the Force Health Protection program. The Joint Staff and the Services 
are using the DoD Directive and the accompanying DoD Instruction 
6490.3, Implementation and Application of Joint Medical Surveillance 
for Deployments, to implement these new requirements.
    While the anthrax vaccination program is only one of the 
Department's FHP initiatives, it is an excellent example of our 
commitment to the goal of FHP. The current deployment to Southwest Asia 
provides additional examples of FHP at work during a deployment.
    For both the accelerated program in Southwest Asia and the total 
force program, the anthrax vaccination program has high-level attention 
and oversight within the Office of the Secretary of Defense, the Joint 
Staff, the Services, and the warfighting Commanders in Chief (CINC). 
The Army Vice Chief of Staff is the Executive Agent for implementation 
of the anthrax vaccination program in Southwest Asia.
    The CINC has placed a high priority on successfully implementing 
the vaccine program and other elements of the FHP program. On February 
20, 1998, CENTCOM updated their deployment policy on implementing 
comprehensive joint medical surveillance measures to meet the 
requirements in the DoD directive and instruction. In addition to 
requirements for pre- and post-deployment health assessment 
questionnaires and daily and weekly disease and non-battle injury 
reporting, the CENTCOM policy stresses immunization tracking with 
special focus on the anthrax vaccine. CINC CENTCOM has directed that 
deploying personnel hand-carry their immunization record. Guidance on 
vaccination programs and other force health protection measures for the 
theater are explicit regarding the requirement to document, retain, 
and, if appropriate, archive individual medical information. At the 
CINC's request, joint medical surveillance teams (JMST) have recently 
arrived in the CENTCOM area of responsibility to closely monitor and 
report on compliance with force health protection/surveillance 
initiatives, including the anthrax vaccinations administered in 
theater.
    An interim immunization tracking system (ITS) is in place to meet 
the immunization tracking requirements for the anthrax vaccination 
program. Currently, the Services use different systems to capture and 
retain data locally, but they also transmit a core set of information 
in a standard format to the Defense Enrollment and Eligibility 
Reporting System (DEERS). As individuals redeploy or move from one 
geographic location to another, the interim ITS will allow query of the 
DEERS database to confirm the vaccination status of an individual or 
update the individual service member's immunization record.
    DoD is proceeding with a single, long-term solution to immunization 
tracking. In 1995, the Military Health System (MHS) began development 
of the Preventive Health Care System (PHCS)--a component of the 
Composite Health Care System (CHCS) II. Immunization recording and 
tracking for military members, and all MHS beneficiaries, are essential 
components of PHCS. PHCS will eventually incorporate the capability to 
administer and retain periodic, pre-deployment, and post-deployment 
health assessments, as well as track and individual's preventive health 
care needs.
    Requirements for PHCS were approved in May 1996. Funding for PHCS 
was approved in August 1996. Prototype testing is occurring at MacDill 
Air Force Base, FL, Brooke Army Medical Center, TX, and Naval Hospital, 
Beaufort, SC. Operational testing is planned for fiscal year 1998 with 
worldwide deployment anticipated in fiscal year 1999. PHCS is 
programmed in the fiscal year 99-2003 POM as a part of the Defense 
Health Program: CHCS II Deployment Surveillance Program. For active, 
Reserve, and National Guard activities that may lack a ready electronic 
link to CHCS II, a stand-alone PHCS product is being developed.
    Question. How much money is Health Affairs devoting to this effort?
    Answer. Of the $1 billion requested in the DoD fiscal year 1999 
President's Budget to combat chemical and biological threats, no 
funding has been issued to the Defense Health Program.
    Question. Does funding for the FHP effort come out of the $1 
billion mentioned in the President's defense budget or are FHP efforts 
being funded out of a separate account?
    Answer. Of the $1 billion requested in the DoD FY 1999 President's 
Budget to combat chemical and biological threats, no funding has been 
issued to the Defense Health Program.

                         Dayton Daily Articles

    Question. Dr. Martin, as you know, the Dayton Daily News wrote a 
series of articles chronicling a military medical system that was 
inefficient, lacking in oversight and devoid of even the most basic 
safeguards that protect civilians from medical malpractice.
    One of the most troubling accounts of the lack of quality and 
accountability in the military system is that of Dr. Gary Davis. 
According to the Dayton Articles, Davis, an OB-GYN doctor, has a 
checkered professional history, to say the least. Nonetheless, he 
entered the Navy in 1979 after having his Medical privileges suspended 
by the state of Arkansas. Davis served in the Navy from 1979 to 1981 
and then left for private practice. Between 1983 and 1987, Davis was 
sued five times. Then, in 1987, he entered the Army and went to Ft. 
Benning, GA where he was made the Chief of Obstetrics.
    While Davis was serving in the Army, two states took adverse action 
against him. In 1989, Idaho revoked his medical license and in 1990, 
Alabama suspended his license for 18 months. Despite these actions, 
Davis continued to practice in the Army and, in 1992, was made Chief of 
Obstetrics and Gynecology at Fitzsimons. He was also put in charge of 
training residents.
    At Fitzsimons, Davis vouched for another doctor of questionable 
competence, Dr. Daniel Lim. With Davis' recommendation the 
``credentials committee just looked the other way'' to quote the Dayton 
article and credentialed Lim. Five months after that, Dr. Lim performed 
surgery on a young woman, Leigh Clark, and mistakenly severed an 
artery. Clark was crippled for life but won a $5 million judgement. 
According to the article, Lim left the Army in 1995. Davis however, was 
promoted to full Colonel and transferred to Madigan Army Medical 
Center. He was made Chief of Gynecology and Urogynocology and Director 
of Clinical Investigation.
    Did the Army review Dr. Davis' apparent history of malpractice 
before he entered the Army? Was Dr. Davis truthful about his 
professional history?
    Answer. The standard physician procurement process was used to 
bring Dr. Davis into the Army. This process includes: verifying all 
graduate medical training, verifying that all licenses were 
unrestricted and that at least one license was current, obtaining 
letters of recommendation, obtaining an interview letter from a senior 
OB/GYN physician on active duty, obtaining Officer Evaluation Reports 
from prior military service, obtaining a current curriculum vitae, and 
filling out a health and professional status statement. All of these 
documents and verifications were obtained for Dr. Davis prior to his 
appointment.
    As with any process that relies in part on self-reported 
information, the accession procedures are vulnerable to willful deceit. 
Measures to assure the accuracy of self-reported information, including 
notifying the applicant in writing of the consequences of making false 
official statements are now a part of the accession process. Dr. Davis 
answered in the negative to the question asking if he ever had 
professional privileges denied, withdrawn or restricted by any 
healthcare facility. In fact his privileges had been suspended and 
never restored at Baptist Hospital in Arkansas (1979). On his C.V., he 
accounted for the period of time in 1978 by saying that he did locum 
tenens and a ``brief'' fellowship at the University of Alabama. We now 
know that time was spent on the house staff at the Baptist Hospital 
where his privileges were suspended.
    Although Idaho verified his license as being current and 
unrestricted, we now know that he was under investigation in Idaho at 
the time of accession into the Army Medical Corps. There was no way for 
the Army to have known this at that time since Idaho would not release 
such information until action was completed. As a direct consequence of 
the Army's discoveries regarding Dr. Davis' inaccurate reporting of his 
own professional history, he was placed before an Army ``Show Cause'' 
board. The purpose of a show cause board is to recommend whether or not 
an officer should be retained in the face of certain negative 
performance criteria, which can include substandard performance of 
duty, misconduct, moral or professional dereliction, or actions clearly 
inconsistent with national security. After considering all of the 
evidence in Dr. Davis' case, the board, comprised of and presided over 
by line officers, recommended that Dr. Davis be retained on active 
duty.
    Question. Did the Army review Dr. Davis prior to assigning him to 
Chief of Obstetrics at Fort Benning?
    Answer. In addition to the pre-accession process described in 
above, Dr. Davis' professional competency was reviewed by the 
credentialing and privileging process established at Fort Benning.
    Question. Was Dr. Davis truthful about his professional history?
    Answer. Dr. Davis answered in the negative to the question asking 
if he ever had professional privileges denied, withdrawn or restricted 
by any healthcare facility. In fact, his privileges had been suspended 
and never restored at Baptist Hospital in Arkansas (1979). On his C.V., 
he accounted for the period of time in 1978 by saying that he did locum 
tenens and a ``brief'' fellowship at the University of Alabama. We now 
know that time was spent on the house staff at the Baptist Hospital 
where his privileges were suspended.
    Question. Has the Army reviewed Dr. Davis' professional 
qualifications in light of the Dayton articles ?
    Answer. The Madigan Army Medical Center Credentials Committee has 
fully reviewed Dr. Davis' professional qualifications and competency, 
both in light of the Dayton Daily News articles and as part of regular 
review, and cannot justify any adverse privileging actions. Dr. Davis' 
professional record since entry on active duty is totally devoid of any 
adverse findings.
    Question. How was Dr. Davis able to obtain the rank of full 
Colonel?
    Answer. Dr. Davis was promoted to full Colonel while at Fitzsimons 
Army Medical Center. Given that there is no adverse clinical or 
military information in Dr. Davis' Army file, since his entry into Army 
active duty, withholding a promotion could not be justified.
    Question. How and why was Dr. Davis assigned as Chief of Gynecology 
and Urogynecology at Madigan?
    Answer. Dr. Davis was assigned as the Chief of Gynecology and 
Urogynecology at Madigan Army Medical Center for his experience and 
qualifications in the area of gynecologic and, especially, pelvic floor 
reconstructive surgery. Dr. Davis has done solid research in the area 
of pelvic floor injuries and pelvic floor reconstruction. This research 
is directly related to pelvic floor injuries that are much more common 
in females on active duty in the Army and are especially pertinent to 
women's health in the Army but has much broader general implications in 
the treatment of pelvic floor injuries and their sequelae.

    [Clerk's note: End of questions submitted by Mr. Dicks. 
Questions submitted by Mr. Hefner and the answers thereto 
follow:]
                    Funding for Brain Injury Project
    Question. Admiral, it has come to my attention that there is some 
confusion regarding the funds appropriated for the Defense and Veterans 
Head Injury Program and Violence and Brain Injury Project.
    In fiscal year 1998, Congress appropriated in the DoD bill a total 
of $8 million for these programs for use by the Brain Injury 
Association to conduct brain injury research and to provide services to 
military personnel and civilians and their families. The budget request 
was $7 million and we added a plus up of $1 million.
    I have a couple of questions with regard to this issue.
    First, it was my understanding that the full amount of this was to 
go to the Brain Injury Association. Can you tell me how much of this $8 
million goes to the Brain Injury Association for their work and where 
do the remaining funds go?
    Answer. Of the $8 million appropriated for the Defense and Veterans 
Head Injury Program (DVHIP) and Violence and Brain Injury Project, $2.5 
million was granted to the Brain Injury Association (BIA) on February 
5, 1998 and an additional $308,000 was granted on March 3, 1998. Upon 
receipt of a budget request, the remaining funds will be granted to the 
Henry M. Jackson Foundation Bethesda, Maryland to administer the 
Defense and Veterans Head Injury Program.
    Question. Second, USUHS (Uniformed Services University of the 
Health Sciences) which is the administrator of these programs has 
advised the Brain Injury Association that there will be a delay in 
transferring funds to the Association for this work.
    Answer. The delay in distributing the $8 million to the DVHIP and 
BIA resulted from a delay in receiving the DVHIP budget from the 
Jackson Foundation. However, once USUHS received a provisional budget 
from the Jackson Foundation, the remaining $308,000 was granted to the 
BIA. The BIA submitted a budget to USUHS for $2,807,043 and was granted 
$2,808,000.
    Question. Can you tell me what this delay is and when we might 
expect that all of the 1998 funds will be released to the Brain Injury 
Association for this important work?
    Answer. All of the funds requested by the BIA have been released.

    [Clerk's note: End of questions submitted by Mr. Hefner. 
Questions submitted by Mr. Dixon and the answers thereto 
follow:]
             Life Support for Trauma and Transport (LSTAT)
    Question. I am interested in Air Force's views on the Life Support 
for Trauma and Transport (LSTAT). The Army, Navy, and Marines have 
indicated their strong interest in development of this portable 
intensive care system. But I don't believe the Air Force has clearly 
expressed their views. Could you tell me, or provide for the record, 
the Air Force position on the LSTAT program?
    Answer. The Air Force Medical Service has evaluated the LSTAT and 
determined that it does not have an operational requirement for this 
device at this time. We plan to provide this capability with patient 
movement items that have already been approved by the Joint Services 
and programmed for purchase. We are concerned about the weight of this 
device, the volume, and the non-modular configuration. The device 
currently weighs approximately 130 pounds. This will limit the payload 
of some aircraft, require floorloading in some cases (due to litter 
stanchion weight restrictions), and physically challenge medical 
personnel during litter bearing. The LSTAT's ``one size fits all'' 
configuration would necessitate our purchase of medical equipment 
beyond the requirements of most patients. We will continue to monitor 
the progress of this program to determine if further development of 
this device makes it suitable for Air Force use.

    [Clerk's note: End of questions submitted by Mr. Dixon. 
Questions submitted by Mr. Young and the answers thereto 
follow:]
                    Fiscal Year 1999 Budget Request
    Question. In the past two years, the Congress has added almost 
three-quarters of a billion dollars to the Defense Health Program 
because the Administration underfunded the account. The President's 
Budget Request for Fiscal Year 1999 is $10.1 billion, approximately 
$300 million less than the 1998 appropriation. Dr. Martin, please 
explain why you believe that the budget is fully funded even though 
there is a reduction in the overall funding level from last year.
    Answer. Let me assure you that the Department is committed to a 
fully funded Defense Health Program (DHP). In our regular budget 
process, we made adjustments to make sure the DHP is fully funded, 
however, inflation is a problem and we are working to fix it. As you 
are aware, determining what constitutes full funding is subject to 
assumptions and application of our best estimates of budget factors in 
developing the budget. With this said, the budget request for fiscal 
year 1999 is approximately $300 million less than the fiscal year 1998 
appropriation due to the following: fiscal year 1998 contains a $128 
million congressional increase that is not contained in fiscal year 
1999; there are reduced requirements in fiscal year 1999 attributable 
to a declining beneficiary population based on QDR assumptions; there 
are savings attributable to utilization management efforts, and there 
is a decreased one-time payment in fiscal year 1999 due to CHAMPUS 
buyout for the last Managed Care Support Contracts. I have been assured 
that the DHP will be fully funded as the Congress expects.
    Question. Are you absolutely confident that the President's Request 
for 1999 is fully funded?
    Answer. The Department's core medical program is adequately funded. 
Certain non-patient care areas will have to be constrained but I assure 
you that we will not jeopardize patient care.
    Question. Are there sufficient resources in the budget to guarantee 
that our troops are medically fit for deployment?
    Answer. Yes. This is our priority.
    Question. Are there sufficient resources in the budget to provide 
quality care to the families of these soldiers, sailors, airmen and 
marines?
    Answer. Yes. I am committed to ensuring that patient care is 
adequately funded.
              Medical Inflation (Technology and Intensity)
    Question. The fiscal year 1999 budget does not include adjustments 
for Technology and Intensity (medical inflation based on advancements 
in medical techniques). DoD estimates this to be approximately $50 
million. In addition, the Department's method for calculating inflation 
inconsistent with actual inflation rates for pharmaceuticals. These two 
factors put additional pressure on the Defense Health Program.
    The President's Budget does not include funds for ``Technology and 
Intensity''--that is, medical inflation that can be attributed to 
advancements in technology. Why do you believe adjustments should be 
made to account for this type of inflation?
    Answer. Technology and Intensity has been recognized by GAO, IDA, 
RAND, and in the 1993 White House National Health Care Reform Chart 
Book. These studies have found that Technology and Intensity are 
increasing medical costs significantly above what is to be expected 
from just inflation factors, including medical inflation. The use of 
new medical technology, more effective drugs, and more intensive 
treatments all contribute to real growth in the cost of medical care. 
We are working with the DoD Comptroller on this issue.
    Question. Will you please provide an example of how Technology and 
Intensity impacts military health care?
    Answer. As discussed in the previous question, the Military Health 
System experiences costs above inflation driven by new medical 
technology and increased intensity of treatment, and contribute to real 
growth in the cost of medical care in he Defense Health Program. For 
example, when new drugs or new treatment protocols produce more 
effective clinical outcomes we want our patients to benefit from these 
more effective treatments. However, very often the new drug treatments 
are more expensive than what they replace. For example, Prozac and 
Zoloff become new standard treatments for depression, and we are now 
facing the same pressures as the private sector in providing Viagra to 
help patients suffering from impotence.
    Question. How much funding would be required in fiscal year 1999 to 
account for the inflationary effects of technology?
    Answer. Based on the results of a study conducted by the Institute 
for Defense Analyses (IDA) for the Department, we estimate that the 
impact of advancing medical technology in fiscal year 1999 alone is $49 
million.
    Question. How does inflation affect the purchase of pharmaceutical 
products? Does DoD accurately account for this type of inflation? If 
not, what would be a more accurate means of doing so? What are the 
rates for civilian community?
    Answer. The producer price index reports the 1997 price increases 
for pharmaceuticals was 2.7 percent and is projected to be 4 persent in 
1998. DoD does not accurately account for this type of inflation. 
Medical supplies, including pharmaceutical products, are funded through 
the basic stock fund, which allows for only a single rate of inflation 
set by the Office of Management and Budget (OMB). The OMB allowed rate 
is 1.5 for fiscal year 1998, reducing DoD's pharmaceutical buying power 
by 2.5 percent. A more accurate way to account for inflation of 
pharmaceuticals would be to isolate these products from the basic stock 
fund and apply a unique rate of inflation to the pharmaceutical class 
rather than using the average stock fund-wide rate.
    Question. How much funding would be required in FY 1999 to account 
for the inflationary effect of pharmaceuticals?
    Answer. In the civilian sector, as identified in Drug Topics, 
``Community Practice--Reaching New Heights'', pharmaceutical costs rose 
12 percent in 1997, of which 4.2 percent was for new drugs on the 
market; and 5.4 percent was from increased utilization rates (i.e., 
prescriptions filled). Although our data systems do not provide us with 
the means to capture and report actual experience related to 
utilization rates and the use of new drugs, if we experience rates 
similar to the private sector, we expect to experience overall program 
costs to be greater than the OMB rate.
                   Problems Despite Adequate Funding
    Question. Although the Congress added nearly three-quarters of a 
billion dollars to the Defense Health Program over the past few years, 
there are still many complaints about the system. Many hospital 
commanders complain that they do not have sufficient funds to make 
capital improvements such as repairing facilities or replacing outdated 
equipment. This is in part due to: (1) the outdated nature of the 
military medical infrastructure, and (2) the means by which health care 
is now being delivered. For example, managed care has dramatically 
reduced the length and number of hospital visits (in-patient care). As 
a result, the Services may still be operating many unneeded hospitals 
that require significant funding.
    Although the Congress has added nearly three-quarters of a billion 
dollars to the Defense Health Program, many of us still hear complaints 
that hospitals do not have sufficient resources to replace equipment or 
to make necessary repairs. Is this really a case of not having 
sufficient funds? Or, is it a management issue?
    Answer. The Department's core medical program is adequately funded. 
Certain non-patient care areas will have to be constrained but will not 
jeopardize patient care.
    Question. If money is not the issue, what can be done to fix these 
problems? Are there management issues that need to be addressed?
    Answer. We continue to pursue reengineering opportunities, 
rightsizing where appropriate, and reorganization consistent with the 
QDR and DRI initiatives. We are looking at outsourcing where it makes 
good business sense and consolidating Service functions to reduce 
overhead, such as blood donor centers.
    Question. How do you plan to improve the management of the funds 
you currently have? Do you plan to make additional reductions in the 
number of fixed facilities such as hospitals. Do you plan to make 
reductions in personnel. Do you intend to purchase more care from 
contractors?
    Answer. In fiscal year 1999 we are converting 17 hospitals to 
outpatient clinics. This initiative was begun in fiscal year 1997. In 
concert with delivering quality health care and expanded use of 
ambulatory setting for health care delivery there are circumstances in 
which the best management decision would be to convert some small 
hospitals to comprehensive outpatient clinics. With MCS contractors in 
place, and development of comprehensive networks, the decision to 
convert hospitals to clinics and use the contractors network inpatient 
facilities would minimize both inconvenience and out of pocket costs 
for our beneficiaries. For beneficiaries enrolled in Prime, the out of 
pocket costs for admission, whether in the MTF or contractors network 
hospitals are virtually the same for our beneficiaries. Availability of 
MCS contractors allows MTF commanders an additional management tool.
    Yes, the reduction in eligible beneficiary population allows us to 
reduce DHP personnel. In some areas, where the facilities are being 
``right-sized,'' we will be purchasing healthcare through civilian 
contractors.
    Question. How will the implementation of managed care affect the 
requirements for fixed medical facilities and other infrastructure 
investments? Will it help to free up resources?
    Answer. Implementation of managed care in our direct care 
facilities will allow the military services to provide health care in a 
more timely manner, to improve overall continuity of care by assigning 
a primary care manager to coordinate the health care needs of the 
enrollees, and to better use resources in a resource-constrained 
environment. Managed care will also shift care from an in-patient focus 
to more outpatient services. The impact on fixed medical facilities and 
infrastructure is hard to immediately ascertain. The need for military 
medical facilities, support infrastructure, and force structure are 
largely in place to support our readiness mission. Therefore, we must 
be cautious when we look at any right-sizing initiative. We must manage 
care and provide services in an efficient manner in order to support 
our direct patient care levels given our funding levels.
    The care provided by Managed Care Support (MCS) contractors augment 
care provided in Military Treatment Facilities (MTF) and should have no 
impact on the level of MTF capacity. Instead, managed care offers 
better ways to utilize existing resources both within and without the 
MTF. The implementation of managed care has created a number of 
opportunities to optimize the use of fixed medical facilities and avoid 
costs throughout the Military Health System.
    In concert with delivery quality health care and expanded use of 
ambulatory setting for health care delivery there are circumstances in 
which the best management decision would be to convert some small 
hospitals to comprehensive outpatient clinics. With MCS contractors in 
place, and development of comprehensive networks, the decision to 
convert hospitals to clinics and use the contractors network inpatient 
facilities would minimize both inconvenience and out of pocket costs 
for our beneficiaries. For beneficiaries enrolled in Prime, the out of 
pocket costs for admission, whether in the MTF or contractors network 
hospitals are virtually the same for our beneficiaries. Availability of 
MCS contractors allow MTF commanders an additional management tool.
                     New Initiatives in the Budget
    Question. Although the (ASD/HA) has suggested that he will improve 
health care quality, there seems to be little correlation between the 
budget and his plan to correct problems. (The improvement of automated 
systems is one exception.)
    Full implementation of TRICARE should alleviate some of the access 
and cost problems in the system. However, are there any new initiatives 
in the budget to address issues of quality of care? If so, please 
provide a few examples.
    Answer. The ``special'' product line studies are an integral part 
of the external review component of the NQMP. For the past 3 years, 
DoD(HA) has contracted for special quality studies under the National 
Quality Monitoring Program (NQMP). These studies have received national 
recognition by the Joint Commission for Accreditation of Healthcare 
Organizations (JCAHO) as leading the healthcare industry in outcomes 
research. The studies, conducted under civilian contract, examine six 
product lines (birth, cardiovascular, pediatric asthma, diabetes, 
orthopedics and mental health). Interventions patients receive during 
the course of treatment are examined in terms of the outcomes (or 
results) generated. Best practices are identified and promulgated to 
the field by means of the ``Quality Management Reviews''.
    In 1997 JCAHO added a new facility accreditation requirement called 
``ORYX'' which requires facilities to use patient outcomes as a part of 
their quality improvement program and that the data be submitted to 
JCAHO on a quarterly basis for tracking and trending. (In-patient data 
collection begins in July of 1998. The JCAHO time table is for 
outpatient data collection to begin sometime in 1999). In December 1997 
DoD(HA) decided to address the ORYX requirement from an MHS corporate 
perspective by using the processes already in place from the NQMP 
``special studies'' program to address the ORYX requirement.
    We have requested funding in the fiscal year 1999 budget to 
include:
          A $2.26 million plus-up of the funding allocated to 
        the NQMP expanding the current work to cover DoD's ambulatory 
        care facilities under the ORYX program. This will also include 
        funding and maintenance of an MHS provider website that will 
        serve as an information dissemination point and educational 
        forum to enhance awareness of the NQMP special studies/ORYX 
        program.
          $0.25 million to initiate an education program 
        utilizing the expertise of select members of the USUHS faculty 
        to provide education to healthcare providers at the (Major/
        LTCol) MTF clinical service chief level. A combination of 
        workshops and consultation services would help practicing 
        physicians to better understand the data generated by the NQMP 
        special studies and how to use ``best practices'' to improve 
        patient outcomes in the clinic or at the bedside.
          $0.5 million to fund a semi-annual Medical Director's 
        Conference. This conference would bring together DoD medical 
        directors from the 14 TRICARE regions, the medical directors 
        for the managed care support contract (MCSC) and the personnel 
        at OASD/HA(TMA) who are responsible for the oversight of 
        quality management and medical standards. The goals of this 
        conference are to: increase communication and efficiency of the 
        medical leadership, identify opportunities to improve the 
        delivery of medical care, and recommend changes in the TRICARE 
        medical benefit, as needed.
    Question. Are there any new initiatives in the budget to address 
issues of recruiting and retention of providers?
    Army Answer. The question seems to be based on a lack of identified 
budget items to support the question programs in the Office of the 
Secretary of Defense for Health Affairs (ASD/HA) submission. While 
these items are within the Program Operating Memorandum (POM) of ASD/
HA, in the budget year, these dollars are transferred to the services 
and become a part of the Total Obligation Authority (TOA) of the 
appropriate service. Therefore, it would be inappropriate for the 
dollars to support these programs to be within the ASD/HA budget. The 
notable exception to this is the dollars to support the payments of 
tuition, books and fees for those individuals enrolled in the Health 
Professions Scholarship Program (HPSP).
    Currently, there are multiple recruiting incentive programs in 
place. At the present time all of these programs seem to be adequately 
funded to meet the current accession needs.
    Nurse Corps Recruitment Bonus--This bonus of $5,000 is paid to 
Nurse Anesthesia Recruits and Family Nurse Practitioners who opt to 
accept a four-year active duty service obligation rather than a three-
year obligation.
    Dental Corps Accession Bonus--This bonus of $30,000 is paid to 
Dental officers who join the force with a four-year active duty service 
obligation. This program was begun in fiscal year 1996 and has proven 
to be a valuable tool. The current statutory authority for this program 
expires in fiscal year 2002. By that time, we are hopeful that our 
efforts to increase Health Profession Scholarship Program allocations 
utilized by the Dental Corps will be successful and that program will 
become the basis to meet future recruitment needs.
    Health Professions Loan Repayment Program--This program was 
provided to us by the fiscal year 1997 National Defense Authorization 
Act. It provides for the repayment of loans utilized for professional 
education. It provided for $22,000 per year of incurred obligation to a 
maximum of four years. Our House experience with this program is 
limited to date, but we are optimistic that it will assist us. If there 
is a ``downside'' to this program, it is the fact that it is funded 
with monies which are available as a result of unexecuted Health 
Professions Scholarship Program allocations. One program has to be less 
than successful for this program to succeed. As we gain experience with 
this program we are initially limiting it to the recruitment of Dental 
officers.
    The following economic incentives are in place to assist us in the 
recruitment of reserve component health professionals:
    Education Loan Repayment Program: Health Professions Officers 
Serving in Selected Reserve with Wartime Critical Medical Skill 
Shortages (10 U.S.C., Sec. 16302). The loan repayment currently pays 
$3,000 per year up to a max of $20,000 to certain shortage specialties 
for service in the Selected Reserve. Amounts have not kept up with the 
costs of schooling. The dollar amount should be increased so that it 
actually means something to a physician or dentist with many times that 
amount in loans. Suggested change is $20,000 per year to a lifetime max 
of $50,000 also needing a change in language is the requirement that a 
person be fully qualified in his specialty to be eligible. We would 
like the law to allow participation by someone in training as well.
    Special Pay: The ``Selected Reserve Health Care Professionals in 
Critically Short Wartime Specialties program'' (37 USC, Sec. 302g), is 
currently being used as an accession program wherein practicing 
physicians and other healthcare professionals receive up to $10,000 per 
year for a maximum of three years for participation in the Selected 
Reserve. This incentive is no longer appropriate given the increased 
chance of mobilization today. Active Component uses a tiered Multiyear 
Special Pay (MSP) for retention of certain health professionals. The 
law allows this reserve program to be used in a similar fashion and the 
Reserve Components would like to work toward that end.
    Financial Assistance: Health Care Professionals in Reserve 
Components program (10 USC, Sec. 16201). The Financial Assistant 
Program pays a stipend ($10,000/yr) to interns, residents, and some 
others in certain critical shortage specialties in return for future 
two-for-one obligation to the Selected Reserve. This program could be 
the best recruiting tool available to the Reserve Components by 
modifying the law to allow physician and dental students to participate 
(similar to the Active Component HPSP (10 USC, Sec. 2121). Also, 
currently the obligation is based on full years of participation. The 
program should be changed to allow six-month increments similar to 
several of the Active Component counterpart programs.
    Another one of the invaluable tools assisting recruitment is the 
educational opportunities offered. In addition to attracting high 
quality applicants, graduates of the various programs have incurred an 
active duty service obligation which provides a level of stability to 
the force as a whole. Currently the following educational programs are 
being utilized to attract high quality individuals into military 
service:
    Health Professions Scholarship Program--This program provides the 
bedrock levels of accessions into various health disciplines. Currently 
we are utilizing HPSP allocations to support entry level training for 
physicians, dentists, veterinarians, nurse anesthetists, optometrists, 
and clinical psychiatrists. There is adequate funding to support the 
Defense Health Program portion of this program. We continue to work 
within the Army to obtain the commensurate level of funding from the 
Reserve Personnel Army account needed to support the level of 
scholarships we require. These dollars are currently contained within 
the fiscal year 00-05 POM and any funding shortfall should be resolved 
upon completion of that process.
    Financial Assistance Program--This program enables us to 
``subsidize'' individuals undergoing specialty level training within 
civilian institutions. At the present time, this program is being 
utilized to recruit physicians and dentists in specialties which 
directly affect force readiness.
    Enlisted Commissioning Program--Enlisted members already on active 
duty may compete for this program. It is designed for individuals who 
can complete a Bachelor of Science in Nursing within two years. Upon 
completion of the academic requirements and licensure by the 
appropriate state, the individual is commissioned into the Nurse Corps. 
We find this to be an extremely popular program providing excellent 
upward mobility to outstanding enlisted soldiers.
    Physician Assistant Training Program--This is another in service 
training program which provides us with highly trained health care 
providers. Currently, sixty active duty individuals are selected to 
undergo this two year, tri-service course. We have in the past counted 
on this source to provide one hundred per cent of our requirements. In 
fiscal year 1999 we will attempt to directly recruit physician 
assistants. Our success in this venture, without any additional 
economic incentives, will determine if additional measures are required 
to insure the force structure required in this critical readiness 
specialty is maintainable.
    In addition to the specific programs mentioned above we are also 
offering in service training programs for our Physical Therapists, 
Podiatrists, Pharmacists, and Dietitians. These training programs 
remain fully funded and are extremely effective in both recruitment and 
retention of these specialties. The Special Pay programs play a key 
role in the retention of our medical force. The yearly rates offered to 
individuals who meet the established criteria are established by ASDH/A 
to insure parity across the services.
    Currently there are five Medical Corps Specialty pays authorized 
for payment under Title 37, USC These are:
          Variable Specialty Pay
          Board Certification Pay
          Medical Additional Specialty Pay
          Incentive Special Pay
          Multi-Year Special Pay
    These pays obviously increase the economic incentive for our 
physician force to remain on active duty. The yearly adjustment of 
these rates by OSD (HA) to maintain parity among the services is a 
critical link in the entire retention process. Non Physician Health 
Care Provider Board Certification Pay is provided to non physician 
clinical specialties who have demonstrated clinical excellence by 
virtue of becoming Board Certified in their particular area of 
expertise. Again, this economic incentive aids in the retention of our 
clinical specialists.
    Dental Officer currently receives three types of Special Pays. They 
are:
          Variable Special Pay
          Dental Additional Special Pay
          Board Certification Pay
    Additionally, the fiscal year 1998 National Defense Authorization 
Act has authorized the Dental Officer Multi Year Retention Bonus. 
Currently, we are working within the service process to insure funding 
is available to support this new initiative. Once funding is obtained, 
we are confident that this will assist us in the retention of our 
future dental leadership.
    Navy Answer. No. There are no new initiatives in the fiscal year 
1999 budget addressing issues of recruiting and retention of providers.
    Air Force Answer.
Medical Specialties
    Recruiting: We annually recruit approximately 700 medical officers 
for all five Corps. Recruiting comprises about half of all medical 
accessions. The remainder come from sponsored sources (Health 
Professions Scholarship Program--HPSP, Financial Assistant Program--
FAP, Uniformed Services University of the Health Sciences--USUHS, AF 
Academy--AFA, and ROTC), Line/Service Transfers, and Enlisted 
Commissions. We selectively use scholarship programs to sponsor future 
accessions for specialties we anticipate will be difficult for 
recruiting to attain. A possible resolution appears imminent concerning 
the taxation status of the HPSP benefit. The Internal Revenue Service 
(IRS) and DoD propose the benefit be legislated in a non-taxable 
status. This will provide the full benefit to HPSP participants and 
enhance the value to prospective candidates. Additionally, accession 
bonuses have assisted recruiting with meeting their goals for nurses 
and dentists.
    Retention: There are no specific ``retention goals'' per se, but we 
do have annual losses which are compensated by annual accessions. The 
sponsored scholarships mentioned above produce a ``pipeline'' of 
expected specialty accessions for future years. As those years 
approach, and if losses or gains become misaligned, then recruiting is 
the tool we use to effect immediate staffing improvement. Over the 
years, the annual losses have become stable and predictable, thus 
balanced with programmed sponsored accessions along with recruiting 
goals. Also, Incentive Special Pays (ISP) have remedied certain 
staffing shortfalls by increasing retention (for example, increasing 
ISP for Certified Registered Nurse Anesthetists (CRNAs) eliminated a 
shortage of 30 USAF CRNAs to the point where we reduced our sponsorship 
of HPSP scholarships). Moreover, recent changes in dental special pays 
(which had not changed since fiscal year 1981) along with 
implementation of the new Multi-year Special Pay (MSP) will certainly 
strengthen retention for dentists. Continuation of these special pays 
is imperative for continued success.
Dental Specialties
    Recruiting: The new $30,000 dental accession bonus is an incentive 
to motivate new accessions to enter for four years vice three. 
Additionally, we increased our level of Health Professions Scholarships 
for dentists to sponsor high quality candidates in dental school which 
relieves some of the burden from Recruiting Services.
    Retention: Existing special pays for dental officers have increased 
for the first time since 1981. The increases affected both junior and 
senior officers, and is expected to improve retention noticeably. 
Additionally, the new Multi-Year Special Pay (MSP) will enhance 
retention. It will offer an incentive for dental officers to remain on 
active duty for contractual periods ranging from two to four years. The 
amounts will vary by specialty and length of the contractual 
obligation. Furthermore, active duty Graduate Medical Education offers 
advanced dental training (often in active duty programs) for general 
dentists to become specialists. This is also a retention tool as 
dentists become trained in a specialty and incur a training obligation. 
Finally, board certification pay offers incentives to advance their 
personal standing in the dental profession.
    Quality of Care. In terms of quality care, the Air Force has many 
ongoing efforts. The Air Force continues its focus on the expansion of 
TRICARE, are conducting Preventive Health Assessments (PHAs) on all 
active duty personnel with the focus of maintaining a healthy and fit 
active duty force, and constructed Health And Wellness Centers (HAWCs) 
with exercise physiologists at all Air Force installations. 
Additionally, in the spirit of building healthy communities, within our 
Preventive Health Care System (PHCS), we implemented various preventive 
initiatives such as Put Prevention into Practice (PPIP) and Health 
Evaluation Assessment Reviews (HEARs).
    Question. Is there sufficient scholarship funding?
    Navy Answer. The status of scholarship funding impacting Navy 
Medicine's recruitment and retention of providers is as follows:
    The Armed Forces Health Professions Scholarship Program (AFHPSP) is 
adequately funded to meet Navy needs. OASD (HA)'s 13 points on quality 
of health care which includes the GMO Replacement Program were not 
included in the fiscal year 1999 Budget. Inclusion would drive 
budgetary requirements higher for the Financial Assistance Program and 
the Armed Forces Health Professions Load Repayment Program.
    Question. Is there adequate incentive pay?
    Navy Answer.
                             medical corps
    Market competition is important when considering physician 
recruiting and retention. One competitive factor is pay. Military 
physicians receive incentive pay (ISP) designed to reduce the gap 
between military and civilian average pay. Data regarding civilian 
average pay is collected annually for DoD by the Hay Group, and is used 
to establish incentive pay rates. Despite ISP there is a residual 
military-civilian pay gap especially in surgical specialties. It is 
believed that these pay differences are a major factor affecting 
recruiting and retention for surgical specialties. Examples of 
military/civilian pay gap for three key specialties:

----------------------------------------------------------------------------------------------------------------
                                                                    Average USN       Average
                                                                       pay*        civilian pay*  Gap  (percent)
----------------------------------------------------------------------------------------------------------------
Family Practice.................................................        $109,055        $128,400              15
General Surgery.................................................         127,494         195,000              35
Orthopedic Surgery..............................................         141,359         271,100             48
----------------------------------------------------------------------------------------------------------------
* Fiscal year 1997 data, Hay Group survey for civilian pay and Office Assistant Secretary of Defense (Health
  Affairs) (OASD) (HA)) for Navy pay.

    Physician special pay are capped by statute. The result is a 
gradual increase in the military/civilian pay gap:

----------------------------------------------------------------------------------------------------------------
                                                                      Average         Average
                              Year                                   civilian         million      Gap (percent)
                                                                  physician pay*  physician pay*
----------------------------------------------------------------------------------------------------------------
1993............................................................        $153,275        $115,733              32
1994............................................................         164,332         115,573              42
1995............................................................         167,382         117,046              43
1996............................................................         176,913         118,571              49
1997............................................................         178,369         121,219             47
----------------------------------------------------------------------------------------------------------------
* Derived from fiscal year 1997 data, Hay Group survey for civilian pay and OASD(HA) for military pay.

                              DENTAL CORPS
    Special pays for Dental Corps officers have been addressed through 
legislation in fiscal year 1997 and fiscal year 1998. Fiscal year 1998 
legislation was passed authorizing a multi-year retention bonus for 
dental officers, however appropriations were not granted to support 
this program. An evaluation of the impact of these programs can only be 
made after a fully funded multi-year retention bonus is implemented. 
Retention trends can then be identified and verification of their 
success evaluated.
                         MEDICAL SERVICE CORPS
    Existing incentive special pay/special pay for non-physician 
providers programs are adequate and have been very successful in 
helping to achieve Medical Service Corps officer retention goals.
                              NURSE CORPS
    Existing incentive special pay/special pay for non-physician 
providers programs are adequate and have been very successful in 
helping to achieve Nurse Corps officer retention goals.
    Question. Would additional resources help in recruiting and 
retaining well-qualified physicians, nurses and technical staff?
    Navy Answer.
                             MEDICAL CORPS
    Additional resources directed toward physician special pays and 
toward the Financial Assistance and Loan Repayment programs would help 
to both retain and recruit physicians.
                              DENTAL CORPS
    Scholarships, other financial incentives, and various recruiting 
initiatives seemed to have cured the Dental Corps accession problem 
(Table 1). What remains unclear at this point is the effect the non-
funded multi-year retention bonus will have on current active duty 
personnel and those seeking military service. Although the Navy Dental 
Corps has appeared to stabilize, without a fully funded retention 
program current status may change.

                                 Table 1
------------------------------------------------------------------------
                                             Fiscal year--
                             -------------------------------------------
                                 1995       1996       1997       1998
------------------------------------------------------------------------
Billets.....................      1,491      1,419      1,414      1,395
End-Strength................      1,403      1,332      1.331      1,384
Shortage....................        -88        -87        -83      *-11
------------------------------------------------------------------------
* Projection assuming Navy Recruiting Command obtains goal.

                         MEDICAL SERVICE CORPS
    The Medical Service Corps is presently meeting recruiting goals for 
non-physician providers. Additional resources for recruitment/retention 
purposes are currently unnecessary.
                              NURSE CORPS
    Additional resources for recruitment/retention of Nurse Corps 
Officers are not required at this time.
    The Nurse Corps is meeting recruiting goals for generalists. Use of 
the nurse accession bonus and the Nurse Candidate Program funding have 
been invaluable in achieving these goals, along with use of diverse 
accessioning sources such as the Naval Reserve Officer Training Corps 
(NROTC), the Nurse Candidate Program and the Medical Enlisted 
Commissioning Program.
    Specialty end strength goals in fiscal year 1997 were met through 
service programs, rather than recruiting, which has been historically 
unsuccessful in procuring specialists. Overall manning of nurse 
specialists is at 96 percent.
    Question. Are there new initiatives in the area of information 
systems and automation? Please provide examples.
    OSD Answer. New initiatives underway include Force Health 
Protection, Personal Information Carrier (PIC), Computer-based Patient 
Record (CPR), Government Computer-based Patient Record (G-CPR), and 
data standardization.
    Force Health Protection. On 8 November 1997, President Clinton 
directed the Departments of Defense and Veterans Affairs to create a 
Force Health Protection (FHP) Program in response to Persian Gulf War 
illnesses. FHP was subsequently mandated in Public Law 105-85. Under 
this initiative, every military service member will have a 
comprehensive, life-long medical record of all illnesses and injuries 
they suffer, the care and inoculations they receive, and their exposure 
to different hazards. This record will help prevent illness and injury, 
and identify and cure those that occur. FHP will help ensure accurate 
immunization tracking, preventative health evaluation and pre/post 
deployment surveillance.
    A Personal Information Carrier (PIC) was identified as the 
mechanism (in concert with the CPR) for implementing FHP. This is an 
electronic device that stores information about the person who carries 
it. It will play a significant role along the entire medical 
operational continuum by capturing appropriate medical care both in the 
peace time and theater environments.
    The Computer-based Patient Record (CPR) is essential for capturing, 
maintaining, and providing patient information at any time and at any 
location over the period the patient is a military beneficiary. The CPR 
will support the medical readiness of military forces with seamless 
information management and communications capabilities for the 
transmission and exchange of data between the theater of operations, 
the sustaining base, and/or the continental United States. Also, it 
will promote quality managed health care and capitalize on 
technological advances that will increase interoperability with other 
MHS systems. Our approach to the CPR is designed to provide the maximum 
flexibility to address new requirements as they surface and to 
incorporate new technology as it becomes available.
    The Government Computer-based Patient Record (G-CPR) effort is a 
collaboration among the MHS, the Department of Veterans Affairs, the 
Indian Health Service, and the Louisiana State University Medical 
Center (LSUMC) to create a comprehensive CPR. These four Partners share 
the common goal of developing the means to electronically share 
information and have a positive impact on the health status of every 
patient by improving the quality of care offered through improved 
clinical data availability. The product of the Partnership will be the 
Government Computer-based Patient Record (G-CPR). The diagram below 
shows the proposed G-CPR conceptual model.

              [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]




    At present, the Partners plan to jointly fund the core activity of 
defining a Lexicon, a common data model, event triggers, communications 
standards/processes, and security rules/standards/processes. Each 
Partner will then be responsible to fund, deploy, operate, and maintain 
its own Central Data Repository (CFR) and hardware and software 
Applications.
    Data standardization supports the reuse and sharing of data and 
eliminates duplication of costs. It also eliminates establishing and 
maintaining separate databases. The MHS is now establishing both Tri-
Service and global standards that will be the basis for the data 
contained in the G-CPR. We are collaborating with industry to use 
established and industry accepted standard sets and complying with the 
Health Insurance Portability and Accountability Act of 1996 (HIPAA).
    Army Answer. The new initiatives in information systems and 
automation are being conducted as joint DoD efforts. These joint 
initiatives include the Personal Information Carrier (PIC), the 
Preventive Health Care System (PHCS), and the Government Computer-Based 
Patient Record (G-CPR), all of which will contribute to the 
satisfaction of the requirement for the Force Health Protection 
mandated in Public Law 105-85.
    The Service-unique processes are only those necessary to implement 
the joint applications within the unique Service structures or those 
necessary for unique command and control functions. For the U.S. Army, 
these initiatives include the Medical Communications for Combat 
Casualty Care (MC4) which will provide the necessary interfacing 
infrastructure needed to field the joint medical applications within 
the Army deployable units and the Medical Situation Awareness and 
Control System (MSAC), which will provide the medical command and 
control functions in a deployed environment.
    Navy Answer. Yes, there are new initiatives in the area of 
information systems and automation. These initiatives include business 
process reengineering affecting the way in which Information 
Management/Information Technology (IM/IT) is delivered, as well as 
developing the technology which will support the Force Health 
Protection Immunization Tracking System, Personnel Information Carrier 
(PIC), and the Government Computerized Patient Record (GCPR).
    Regarding business process reengineering, OASD(HA) and the Service 
Surgeons General authorized a plan for consolidation of the Military 
Health System (MHS) IT execution functions to improve the efficiency 
and effectiveness of the program. In addition, the Bureau of Medicine 
and Surgery has requested that the Commercial Activities study for IM/
IT be canceled in favor of the planned consolidation and is actively 
engaged in supporting line Navy's efforts towards regionalization. Navy 
Medicine has also actively supported implementation of an immunization 
tracking system which accounts for the administration of the Anthrax 
vaccine to our active duty personnel.
    As the Executive Agent for the Clinical Business Area, Navy 
Medicine has been the service lead in creating a collaborative 
partnership with the Department of Veterans Affairs, Louisiana State 
University Medical Center, and the Indian Health Service to 
appropriately share clinical information via a comprehensive lifelong 
medical record and developing a program which will provide personnel 
with a PIC. The PIC will be carried by our soldiers, airman, sailors 
and marines and enables medical personnel to access, input, and update 
medical information; thereby enhancing the care and treatment of our 
active duty personnel in the field and shipboard environment.
    Air Force Answer. The AFMS plans to deploy the Medical Readiness 
Decision Support System (MRDSS) to all AFMS medical treatment 
facilities. MRDSS is a decision support system for MAJACOM and HQAF 
readiness planners and War Reserve Materiel (WRM) Managers. The goal is 
to provide AF wide visibility of all Unit Type Code's (UTC's) and WRM 
project codes for both deliberate and crisis action planning. This 
system solves the inability to conduct program assessment of medical 
``weapon systems'' i.e. global aeromedical evacuation system. Currently 
there is no global visibility of wartime assets and assemblages which 
means there is an inability to develop capability based resourcing 
plans. This program allows line item level visibility of all Total 
Force UTC assets: people and training, supplies and equipment, and POC 
information for unit personnel. It matches assets against Time Phased 
Force Deployment Data taskings. It provides the capabilities to build 
WRM spend plans based on desired/required capability and to rapidly 
locate assets within the worldwide Air Force UTC inventory. The system 
also assists in developing readiness reports and assessments, tracking 
deployments, and eases reporting requirements at the unit level.
    Another initiative is the leasing of IM/IT assets. HA Policy Letter 
98-002, Military Health System (MHS) Information Technology Leasing 
Policy, dated 12 Nov 98, states that the MHS will lease its IM/IT 
assets (hardware, software, peripherals, and limited service) for non-
combat units. The Service Chief Information Officers will be 
responsible for strategic implementation of this policy. The MHS will 
use best leasing business practices from the commercial sector, such as 
the centralization of leasing activities and enterprise-wide lease 
order bundling, to generate volume discounts on all IM/IT leases. 
Leasing is expected to be a cost-effective method for long-term 
management of MHS IM/IT assets and capital expenditures. It will 
provide the MHS enterprise with predictable IM/IT funding forecasts, 
while simultaneously increasing the quality, quantity, and speed with 
which we can moderate the footprint of critical IM/IT products and 
services throughout the military medical community. Leasing will 
provide the MHS with more timely, orderly, cost-effective, and risk-
free technology refreshments, mitigating the technology obsolescence 
risks we currently face in a number of areas. Finally, leasing will 
allow us to consolidate the acquisition of IM/IT products and services 
such as asset management and maintenance at a cost-effective price. To 
this end, the AFMS is developing a centralized plan for the leasing of 
End User Devices.
       Uniformed Services University for Health Sciences (USUHS)
    Question. The budget provides $55.7 million for the continued 
operation of USUHS. The Defense Reform Initiative (DRI) proposes to 
transfer operational responsibility from Office of the Secretary of 
Defense to the Navy.
    Is the Uniformed Services University for Health Sciences (USUHS) 
funded in 1999?
    Answer. Yes. DoD planned funding for USUHS in FY 1999 is as 
follows:

                                                                  ($000)

O&M...........................................................   $55,760
RDT&E.........................................................     2,173

    Question. What about funding in future years?
    Answer. We will program for sufficient outyear funds to properly 
operate and support the University.
    Question. How will this contribute to the readiness of the troops, 
the retention of physicians and the quality of care?
    Answer. USUHS programs in the School of Medicine and the Graduate 
School of Nursing are specifically designed to effect improved delivery 
of medical care, and thus improved readiness, of the nations' military 
service members.
    USUHS provides the best trained new military physicians to the 
armed forces. This outcome is the result of a four year immersion in 
military life while in medical school, and of the integration of at 
least an additional 20 weeks of specific military medical subjects and 
participation in a variety of increasingly challenging military medical 
practical experiences in the field. This USUHS curriculum provides 
education and experience not found in other medical schools, in 
militarily relevant subjects such as Tropical Medicine, Preventive 
Medicine, Emergency Medicine, Behavioral Medicine, Public Health, and 
Military Medical Leadership. USUHS graduates contribute to the 
readiness of the troops because they are a product of the only four 
year professional medical education that is consistently related to the 
military population served, and to the war and peace time environments 
in which they serve.
    USUHS also delivers numerous other medical readiness related 
services (i.e., Continuing Health Education, and the planned 
implementation of Distance Learning), to the community of U.S. military 
health professionals throughout the world.
    The quality of medical care in the three major military hospitals 
in the Washington area is enhanced and enriched by thousands of hours 
of patient care and consultation provided each year by teacher-
physicians from twelve USUHS academic departments. The same expert 
faculty provides patient care consultation to military treatment 
facilities throughout the world.
    Research activities at USUHS are guided by military relevancy, 
hence the quality of medical care and the readiness of troops are 
enhanced by USUHS research efforts to predict, prevent or treat 
infectious diseases such as malaria and hepatitis, as well as efforts 
to improve blood preservation, treat nerve injury, improve wound 
healing and treat brain injury. USUHS research contributes to military 
readiness through improved care for combat injuries, thus facilitating 
the return of duty of ill and injured service members.
    Regarding retention of physicians, more than 2,200 of the 2,470 
graduates of USUHS are still on active duty; they comprise 17 percent 
of all military physicians, thus ensuring continuity of military 
medicine, and have demonstrated their long term value by 
extraordinarily high selection rates for promotion to Colonel (or 
Captain, USN) and appointment to leadership positions throughout the 
Military Health System.
    Question. Does the budget propose any change in the operation of 
USUHS? How will that improve the administration of USUHS?
    Answer. We are committed to continue funding the University at 
levels sufficient to support both full operations and the student load.
    In the area of governance of USUHS, the Secretary of Defense 
determined in the fiscal year 1998 Defense Reform Initiative the USUHS 
should remain open and come under the collective oversight of the 
Surgeons General of the Army, Navy and Air Force. Furthermore, the 
Surgeon General of the Navy was established as Executive Agent for 
programming, budgeting and funding execution activities for USUHS. This 
places USUHS in a position to be directly responsive to the 
requirements of the Surgeons General.
    Question. What is the current level of DoD spending on Medicare-
eligible retirees? How have you calculated this figure? Are you 
confident of its accuracy?
    Answer. The estimated current level of effort for demonstration 
sites has not been established. This calculation is a demonstration-
specific approximation of what the DoD spent for the care of our 
beneficiaries who are eligible for care under both the military health 
system and Medicare program (dual eligible). The estimated total 
expenses for our dual eligible beneficiaries must also be adjusted for 
non-medicare covered services. The accuracy of these estimates will be 
examined separately by the General Accounting Office as an important 
component of the demonstration evaluation.
    Question. What do you estimate that the cost of Medicare Subvention 
would be if offered to all Medicare-eligible retirees? More than 
current level of spending? Less than the current level of effort?
    Answer. The purpose of the six site demonstration is to address the 
issue of whether DoD and Medicare can implement a cost-effective 
alternative for delivering accessible and quality care to our dual 
eligible beneficiaries. The answer to this question will become more 
clear as the demonstration proceeds and health services begin early in 
the next fiscal year.
    Question. What would be the impact of the deficit if you have 
underestimated your current level of spending? Will direct spending 
increase?
    Answer. We have not determined the full impact of underestimating 
the Level of Effort (LOE). We are devoting significant efforts to 
ensure the accuracy of our LOE. We remain committed to making the most 
of our scarce medical resources and enhancing the quality of health 
services to all eligible beneficiaries.

                             Accreditation

    Question. The Joint Commission for Accreditation of Health 
Organizations (JCAHO) is the leading accrediting body in the world. 
JCAHO accreditation is recognized as a ``seal of approval'' and 
provides a level of assurance that quality standards are being 
attained. In 1996 JCAHO surveyed 16 military hospitals and identified 
five specific problem areas:
          1. Medication Use--that safe prescribing, dispensing and 
        administration of medications;
          2. Competence--assessing the competence of hospital and 
        clinic staff;
          3. Management of the Environment of Care--the condition of 
        hospitals, equipment and processes used to ensure a safe and 
        effective environment of care;
          4. Patient Data and information--effective and accurate 
        record keeping of patient data, and
          5. Special Treatment Procedures--the use of restraint and 
        seclusion.
    In 1996 JCAHO identified several areas where military hospitals did 
not score well. One of these areas was Medication Use, that is the safe 
prescribing, dispensing and administration of medication to patients. 
Exactly which hospitals were deficient in this area?
    Army Answer. The hospitals which were found deficient in this area 
were:
    (1) Womack Army Medical Center, Ft. Bragg, NC--Received One Type I 
and II Supplemental Recommendations in this area. The Type I 
Recommendation (TX3.5) identified medications the organization policy 
indicated to be maintained in a container with two locks were 
maintained in a container with only one lock. Supplemental 
Recommendation (TX3.4) requires that Chemotherapy Fume Hoods be 
certified on an annual basis by an approved agency. The last 
certification was more than one year old. Supplemental Recommendation 
(TX3.5.5) requires that a system be developed to check the breakaway 
locks on emergency medicine containers on a daily basis. Some of the 
locks were not checked on a daily basis.
    (2) Patterson Army Health Clinic, Ft. Dix, NJ--Received a 
Supplemental Recommendation (TX3.4) which indicated a lack of 
standardized procedures throughout the facility regarding the manner to 
mark the expiration dates on multiuse medication vials.
    (3) USA Hospital--Heidelberg--Received one Type I (3.5). They did 
not follow their established policy regarding obtaining two signatures 
required for wastage of narcotic drugs. Only one signature was being 
obtained on the destruction documentation.
    (4) USA Regional Medical Center, Landstuhl, Germany--Supplemental 
Recommendation (TX3.5.6) identified that there were no procedures 
developed for recall of medications dispensed afterhours in one 
outpatient clinic.
    (5) Walter Reed Army Medical Center, Washington, DC--Supplemental 
Recommendation (TX3.5) indicated that the areas used for dispensing 
medications were not sufficiently secure to preclude entry by 
unauthorized personnel.
    Navy Answer. Five Navy facilities completed the JCAHO survey in 
1996, three Naval Hospitals and two Naval Ambulatory Care Centers. All 
facilities scored average or better in the area of medication use. 
Naval Hospital Cherry Point was the only facility that received a Type 
I Recommendation. The Type I recommendation at Naval Hospital Cherry 
Point was due to:
          (a) One of three narcotic logs reviewed did not have a dual 
        signature for accounting for narcotic medications and
          (b) a refrigerator temperature log was not maintained in one 
        clinical area.
    Air Force Answer. The following four medical facilities had 
``Medication Use'' discrepancies during the 1996 Joint Commission of 
Accreditation of Healthcare Organizations surveys: 48th Medical Group, 
RAF Lakenheath, England; 42nd Medical Group, Maxwell AFB, Alabama; 
375th Medical Group, Scott AFB, Illinois; and the 72nd Medical Group, 
Tinker AFB, Oklahoma. However, the management of those facilities took 
prompt action to resolve systemic, education or oversight problems 
responsible for these discrepancies.
    Question. What specifically has been done at each of these 
hospitals to correct this deficiency?
    Army Answer. Each MTF is required by JCAHO to submit evidence that 
they have corrected all deficiencies discovered during the survey. This 
can be in a written report or by actual focused surveys by another 
survey team at a later date. All facilities that received either Type I 
or supplemental recommendations during the CY1996 survey year have 
corrected all deficiencies to the extent that JCAHO has acknowledged 
the extent of their efforts and removed all Type I findings.
    Navy Answer. Naval Hospital Cherry Point has, through departmental 
meetings, reemphasized to all staff the importance of complying with 
hospital policies and established protocols.
    Air Force Answer. The following actions were taken by the four 
hospitals that had medication use deficiencies identified during their 
1996 JCAHO survey:
48th Medical Group, RAF Lakenheath, England
      Deficiency Identified: Locks to the emergency response 
carts, which store medications, were stored in patient care areas of 
the hospital, versus being stored in a secured place, thus compromising 
the control and security of the emergency drug supply.
      Corrective Action Taken: A system was devised during the 
survey and corrected before the team departed. Replacement locks for 
emergency carts are now secured in the pharmacy. Now, each time the 
emergency cart is used and medications/supplies replenished, a new 
numbered lock must be obtained from the pharmacy and signed for by the 
staff member. This process was well accepted by the Joint Commission.
42nd Medical Group, Maxwell AFB, Alabama:
      Deficiency Identified: Controlled drugs were not being 
checked and counted at the beginning and end of the shift in the Post 
Anesthesia Care Unit (PACU), even though a hospital policy required 
this activity.
      Corrective Action Taken: Hospital policy was reinforced 
and Registered Nurses assigned to the anesthesia unit are counting/
accounting for all controlled drugs at the beginning and the end of the 
8-hour shift, which is the total time the unit is open.
      Deficiency Identified: In one area of the hospital, 
access to replacement locks for the emergency response carts were not 
controlled, they were stored in the crash cart.
      Corrective Action Taken: A hospital policy was developed 
that addresses stringent control of controlled medications and cart 
locks. Replacement locks are now stored in the pharmacy and must be 
signed for.
375th Medical Group, Scott AFB, Illinois
      Deficiency Identified: An emergency drug kit located in 
the chemotherapy clinic was not secured and contained medications that 
were outdated.
      Corrective Action Taken: The discrepancy was corrected 
during the survey. The emergency drug kit was added to the list of 
stock medications within the clinic requiring routine checks per 
established policy.
72nd Medical Group, Tinker AFB, Oklahoma
      Deficiency Identified: The keys to the medication 
cabinets in one area of the hospital were left in the locks during 
normal duty hours.
      Corrective Action Taken: Medication cabinets are now kept 
locked with the keys held by the clinic supervisor. As a second 
security measure, the door to the treatment room, which contains the 
medication cabinets, is kept locked when not in use. All clinic 
personnel have been briefed on this policy; and all new personnel are 
briefed upon arrival/orientation to the clinic.
    Question. Have hospital commanders made efforts to improve the safe 
prescribing, dispensing, and administration of medications?
    Army Answer. Each hospital commander has provided sufficient 
evidentiary data to JCAHO to convince them to remove all Type I 
findings. This action required sufficient corrective processes to 
assure JCAHO that all standards are now being adhered to.
    Navy Answer. The only identified concern was the area mentioned in 
Q. 44 and corrective action was taken.
    Air Force Answer. Yes. There are Operating Instructions in place at 
all Air Force medical facilities that address these issues. These 
operating instructions, which are developed by senior level management 
and other subject matter experts, establish guidelines that direct 
clinical practice and ensure a safe environment of care for patients 
and staff alike. New staff members are briefed on hospital/clinic 
operating instructions as part of their newcomer's orientation and are 
then responsible to conform to the guidelines established. 
Additionally, problems identified with security of crash cart 
medications at the four hospitals previously mentioned, and the 
corrective actions taken, were shared with staff across the Air Force 
Medical Service. Such information is disseminated to medical service 
personnel in a number of ways: via a ``Clinical Alert'' message to 
medical facilities and intermediate commands worldwide; on the Air 
Force Clinical Quality Management Website HOMEPAGE; and at the annual 
Clinical Quality Management Conference, which is attended by senior 
physicians, nurses, medical technicians, credentials monitors and other 
Quality Services personnel from Air Force medical facilities worldwide.
    Question. Have commanders seen to it that providers who are not in 
compliance with these standards have been retrained, disciplined or 
fired?
    Army Answer. Requiring all providers to meet the JCAHO standards in 
their day-to-day practice and having JCAHO acknowledge the efforts made 
by each House individual MTF to eradicate all deficiencies is evidence 
that commanders have taken corrective action. We cannot guarantee that 
all individuals have been retrained, disciplined or fired; however, the 
requirements of the accrediting agency have been satisfied and will 
remain under close scrutiny. In addition, classes have been added to 
numerous courses offered by both the MEDCOM and AMEDD Center & School 
staff to all levels of MTF staff in this area.
    Navy Answer. Not applicable at Navy facilities.
    Air Force Answer. Yes, if an individual is identified as having 
difficulty with medication administration or any other clinical skill, 
they receive additional training until they are assessed to be 
competent to safely carry out the tasks required. Should the individual 
continue to have difficulty, despite additional training, and it is 
felt that such difficulty could result in a bad patient outcome, then a 
review of that individual's practice by a panel of peers is conducted 
and recommendation made to the hospital/clinic commander and corps 
chief, to limit the person's clinical privileges or remove them from 
clinical practice.
    Question. Have you reviewed the performance of other hospitals to 
see that this is not a problem elsewhere?
    Army Answer. Yes.
    Navy Answer. In 1997, eleven facilities completed the JCAHO survey; 
two facilities did not have co-signatures by the anesthesia staff when 
narcotics were destroyed. The standards were reinforced to all staff.
    Air Force Answer. Yes. All other Air Force facilities surveyed have 
received top scores in the category, ``Medication Use.''
    Question. Another problem area according to the JCAHO report is the 
ability of the system to assess the competence of hospital and clinical 
staff. Which hospitals are having problems in this area?
    Army Answer. The Army Medical Treatment Facilities (MTFs) are: 
Patterson Army Health Clinic, Ft Dix, NJ; Heidleberg, Germany; 
Wuerzburg, Germany; Walter Reed Army Medical Center, Washington, DC; 
Madigan Army Medical Center, Ft Lewis, WA.
    The major deficiencies in this area involved the requirement that 
staff be appropriately trained and maintain current competency to work 
with the specific age groups to whom they provide services. The 
standard also required that their job descriptions reflect this 
requirement and that their performance in this area be evaluated on a 
periodic basis to reflect their competency. All of the facilities 
surveyed had developed an elaborate system to ensure that staff were 
qualified for the age specific requirements shown in their position 
descriptions. However, they had not developed a system to ensure that 
the age specific competency skills of the staff were assessed on an 
ongoing basis. Each facility has now provided JCAHO sufficient data to 
indicate that they are now meeting this standard and JCAHO has revised 
the Accreditation Grids to reflect these updates.
    Navy Answer. Of the five facilities surveyed in 1996 only one 
(Naval Hospital Cherry Point) scored average. The other four facilities 
were in substantial or significant compliance with the standards. The 
JCAHO identified that the assessment of staff based on age of patients 
served was not documented in all staff files. This area is being 
addressed by Naval Hospital Cherry Point.
    Air Force Answer. Seven (7) Air Force medical facilities received a 
JCAHO survey in 1996: 436th Medical Group, Dover AFB, Delaware; 96th 
Medical Group, Eglin AFB, Florida; 48th Medical Group, RAF Lakenheath, 
United Kingdom; 42nd Medical Group, Maxwell AFB, Alabama; 375th Medical 
Group, Scott AFB, Illinois; 72nd Medical Group, Tinker AFB, Oklahoma; 
60th Medical Group, Travis AFB, California.
    The overall survey score received by these 7 facilities ranged from 
89 to 97, 100 being the highest possible score.
    Question. What is being done to assess the competence of staff at 
all military facilities?
    Army Answer. Each staff member's competence is assessed upon entry 
into the system using the assessment criteria developed by JCAHO and 
DODHA. Prime source verification of credentials and a query to the NDPB 
is accomplished. Current competency is also ascertained and for the 
majority of the functional areas an extensive orientation program has 
been developed with associated competency evaluations. References are 
also required for the majority of the positions.
    Air Force Answer. The category, ``Competency Assessment,'' falls 
under the area of Management of Human Resources in the Joint Commission 
survey standards. Scoring in this category is based on how well the 
hospital's or clinic's leaders carry out the following processes and 
related activities to ensure competency of their staff: planning; 
providing competent staff; assessing, maintaining and improving staff 
competence; and promoting self-development and continued learning.
    Planning addresses the processes in place to define the 
qualifications, competencies and staffing necessary to fulfill the 
hospital's mission.
    Providing competent staff addresses whether a program is in place 
to confirm the experience, education, and abilities of a staff upon 
entry and orientation to a new work environment.
    Assessing, maintaining, and improving staff competence addresses 
whether or not the organization has an ongoing competency assessment 
process in place that evaluates staff members' continuing abilities to 
perform throughout their association with the hospital/clinic.
    Promoting self-development and learning: evaluates whether 
leadership has created a culture that fosters learning and professional 
development, and encourages staff to provide feedback about the work 
environment to leaders.
    Staff education and training programs that include the above 
standards are in place at our Air Force hospitals and clinics. The 
response provided to Question HC-06-016 addresses the current process 
in place for evaluating the competence of our staff.
    Question. What is the current process for evaluating the competence 
of staff?
    Army Answer. Each facility has the requirement to accomplish annual 
performance evaluations of all staff. The specific procedures are 
contained in AR 40-68. In addition each facility must meet the 
standards established by JCAHO for evaluating staff and professional 
competence.
    Air Force Answer. Standard processes in place at Air Force medical 
facilities to assess the competence of staff include the following:
     New medical personnel, at a minimum, meet with the Chief 
of the Medical Staff to be briefed on the facility's Medical Bylaws, 
operating instructions, clinical practice/medical ethics issues, and 
the individual's provider responsibilities.
     New medical accessions are initially placed on supervised 
privileges until their practice is adequately observed/evaluated by 
their supervisor and a recommendation made to the hospital commander to 
award the provider regular privileges to practice independently. 
Providers' clinical privileges are reviewed every two years. The 
renewal of clinical privileges is based on a report of his/her ongoing 
clinical performance, thus privileges are performance-based.
     Competence of privileged providers is also assessed 
concurrently through medical staff peer review functions. Examples of 
such functions include: Hospital Tissue and Transfusion Committee; 
Infection Control Committee; Executive Committee of the Medical Staff; 
and the Quality Assurance Committee.
     New nursing personnel are oriented to their clinical work 
area under the tutelage of an experienced preceptor. During the 
orientation process, the new staff member's clinical skills are 
assessed for the ability to perform both basic and critical tasks 
independently. Only after exhibiting the ability to safely and 
competently complete the task is the individual given the ``Go Ahead'' 
to perform the task independently. At that time, that skill on the 
individual's orientation checklist is checked off indicating successful 
completion. Moreover, nurses additionally undergo skills competency 
assessment in five critical areas which include: Emergency Response, 
Infection Control, Medication Administration, and Blood Administration.
     Performance Feedback sessions take place every six months 
between the individual and his/her supervisor to discuss the 
individual's clinical performance; and an annual performance evaluation 
is written, which is filed in their military personnel folder.
     Practice deficiencies/unfavorable outcomes are addressed 
via the Peer Review process and are tracked through the hospital's 
Incident Report/Risk Management Program; lessons learned are shared to 
staff meetings and incorporated into the facilities' practice 
guidelines.
     Significant clinical competency issues, as they pertain to 
an individual, can be addressed through a number of avenues, which 
range from verbal/written counseling, to removal from clinical 
practice, to removal of clinical privileges when the individual is a 
provider.
    Question. If periodic reviews are now in place, what is wrong with 
the current system that leads to the inability to judge staff 
competence of staff? If this problem was identified in 1996, why 
haven't Military Treatment Facility Commanders examined and corrected 
the problem?
    Army Answer. We are confident that our current policies and 
regulations address this problem. As with any set of policies or 
regulation, the implementation may vary. Through vigorous education and 
training we are striving for minimal deviations; thus, perhaps 
improving the identification of incompetence but be aware that no 
health care system has taken this to the point of perfection.
    Air Force Answer. All Air Force medical facilities have operating 
instructions to identify staff competence.
    In 1996, the following seven (7) Air Force medical facilities 
received a JCAHO survey: 436th Medical Group, Dover, AFB, Delaware; 
96th Medical Group, Eglin, AFB, Florida; 48th Medical Group, RAF 
Lakenheath (England); 42nd Medical Group, Maxwell AFB, Alabama; 375th 
Medical Group, Scott AFB, Illinois; 72nd Medical Group, Tinker AFB, 
Alabama; 60th Medical Group, Travis AFB, California.
    All seven of these facilities were awarded the highest possible 
JCAHO score (``1'') in the area of Assessing Staff Competence during 
their 1996 JCAHO surveys. Moreover, our medical facilities continue to 
excel in this area. In 1997, several of our facilities scored ``100'' 
on their survey and received ``Commendation,'' JCAHO's highest 
recognition, for their organizations' outstanding patient and staff 
education/training programs.
    Question. The Bethesda Naval Hospital recently was forced to close 
down its blood bank due to incompetence among the staff. Could the 
problems at the Bethesda Blood Bank have been avoided if commanders had 
paid more attention to the competence of their staffs?
    Navy Answer. The National Naval Medical Center Blood Bank 
(consisting of the transfusion center and the blood donor center) was 
not forced to close. The Commander voluntarily ceased donor operations 
on the same day as the Food and Drug Administration (FDA) reported its 
findings. At the time leading up to the FDA observations of non-
compliance, the Commander of the National Naval Medical Center assessed 
competency based on educational achievements and national accreditation 
certifications. The root causes of the problems were: lack of process 
control in procedures, training and documentation; failure to follow 
Standard Operating Procedures; and lack of adequate supervision.
    Question. The JCAHO reported to DoD in 1996 that the condition of 
hospitals, equipment and processes used to ensure a safe and effective 
environment of care were substandard in several military hospitals. 
Please elaborate on this issue. Which hospitals currently have safety 
problems due to poor buildings, equipment and or processes?
    OSD Answer. Although our facilities meet basic JCAHO standards, 
many of our facilities continue to be substandard. With an aging 
medical inventory, we have numerous facilities in need of utility 
systems upgrades or replacements, functional renovations, expansions, 
or total replacement to make them effective and efficient healthcare 
environments.
    Five Air Force medical facilities at USAF Academy, Andrews, 
Barksdale, Luke, Vandenberg AFBs have been recommended by JCAHO for 
correction of Life Safety code deficiencies. Army has only one 
hospital, the 121st General Hospital in Seoul, Korea that is currently 
not JCAHO accredited. For Navy, in 1996, JCAHO did not report any major 
Life Safety deficiencies that would have caused non-accreditation of 
Navy Hospitals. Starting 1 Jan 1995, all medical facilities were 
required to provide JCAHO Surveyors with a Statement of Conditions 
(SOC) which identifies all significant Life Safety deficiencies and 
provide a Plan for Improvement (PFI). The SOC and PFI are established 
processes for insuring that a safe and effective environment of care is 
provided. All DoD medical facilities comply with this process 
directive. This procedure is an ongoing and continuous effort to 
identify Life Safety deficiencies and correct them in a proactive and 
advertised manner with the full cooperation and knowledge of the JCAHO. 
Any significant changes to the SOC and PFI are immediately identified 
to the JCAHO for review and approval. Because of rapid process changes 
in medical treatment delivery, facility and equipment changes and 
replacements are necessary on a continuous basis. Therefore, a SOC and 
PFI process was established as well as an Interim Life Safety 
Management program to manage Life Safety deficiencies in a manner 
consistent with customer safety requirements and resources.
    Navy Answer. There were no substandard U.S. Navy, Bureau of 
Medicine and Surgery (BUMED) Hospitals reported by JCAHO in 1996. 
Starting January 1, 1995 all medical facilities were required to 
provide JCAHO Surveyors with a Statement of Conditions (SOC) 
identifying all significant Life Safety deficiencies and a plan for 
improvement (PFI).
    All Navy medical facilities comply with the SOC/PFI process 
directive in an ongoing and continuous effort to promptly identify Life 
Safety deficiencies and expeditiously correct them with the full 
cooperation and knowledge of the JCAHO. Any significant changes to the 
SOC and PFI are immediately identified to the JCAHO for review and 
approval. Because of dynamic changes in medical treatment processes, 
facility and equipment, revisions to the SOC and PFI occur on an almost 
continuous basis, and are closely monitored.
    Question. What is being done to correct these problems? Do you have 
funds in the budget identified to fix those facilities cited by JCAHO? 
If so, how much, and for which facilities?
    OSD Answer. The medical facilities at Andrews AFB, MD; Barksdale 
AFB, LA; Luke AFB, AZ and Vanderberg AFB, CA are being corrected 
through MILCON projects currently under construction, totaling $33.4 
million. The AF Academy Hospital will be corrected through O&M repair 
efforts, estimated at under $1 million. The Army is addressing 
accreditation of the Korean hospital with an $8.75 million MILCON 
project in FY00 and a $61 million O&M funded facility upgrade in FY00 
through FY05. All DoD medical facilities, because of the SOC and PFI 
process, explained previously, have a verifiable plan to correct 
identified Life Safety deficiencies. Life Safety deficiencies receive 
the highest funding priority within the Offices of the Service Surgeons 
General and OSD Health Affairs. Adequate funding is provided to correct 
these deficiencies through the O&M and MILCON process.
    In FY 1997, Navy programmed the following projects for correction 
of Life Safety (LS) deficiencies:

                                            [In thousands of dollars]
----------------------------------------------------------------------------------------------------------------
                   MTF                              Proj No.                    Project title            Funding
----------------------------------------------------------------------------------------------------------------
NNMC BETH................................  R3-96....................  Repair elevators, B.1...........      $425
NH BREM..................................  R2-96....................  Fire protection system upgrade         434
                                                                       B.HPO1.
NH CPEN..................................  R1-95....................  Cross connection/backflow              130
                                                                       prevention.
NH CPEN..................................  RC9-94...................  Repair/upgrade electrical              411
                                                                       system, H-100.
NH CORPUS................................  R6-96....................  Elevator system upgrade, B.H100.       695
NH GITMO.................................  R1-95....................  Install sprinkler system, B.H1..       245
NH GUAM..................................  R1-95....................  Replace elevators, B.1..........      2240
NH GUAM..................................  R34-93...................  Replace transformers/                  319
                                                                       distribution panels (Phase II).
NH JAX...................................  R3-98....................  RPR elevator controls, B.2080...       376
NMC PTSMHC...............................  R1-95....................  Install sprinkler sys, B.104....       277
NH ROOSRDS...............................  R2-96....................  Correct life safety code def/         1197
                                                                       provide sprinklers, B. 1790.
NH ROOSRDS...............................  R13-96...................  Correct NEC Deficiencies/RPL           931
                                                                       lightning protection, B.1790.
NMC SDIEGO...............................  R17-95...................  Upgrade secondary electrical           129
                                                                       wiring (BEQ), B.41.
NH 29-PALMS..............................  CX-97....................  Electrical system additions.....       150
NMC SDIEGO...............................  R13-95...................  Upgrade secondary electrical           620
                                                                       wiring (BEQ), B.26.
----------------------------------------------------------------------------------------------------------------

    Navy Answer. All BUMED medical facilities, because of the SOC and 
PFI process explained in a previous question, have a variable plan to 
correct identified Life Safety deficiencies. Life Safety deficiencies 
receive the highest funding priority. Adequate funding is provided to 
correct these deficiencies through the Special Projects Program and 
MILCON process. Special Project Funding was allocated in fiscal year 
1997 for the following Life Safety (LS) deficiency projects:

                        [In thousands of dollars]
------------------------------------------------------------------------
                                                                   LS
             MTF                       LS project title          Funding
------------------------------------------------------------------------
NNMC BETH....................  R3-96  Repair elevators, B. 1..      $425
NH BREM......................  R2-96  Fire protect SYST              434
                                upgrade B. HP01.
NH CPEN......................  R1-95  Cross connection/              130
                                backflow prevention.
NH CPEN......................  RC9-94  Repair/upgrade                411
                                electrical system, H-100.
NH CORPUS....................  R6-96  Elevator SYST upgrade,         695
                                B. H100.
NH GITMO.....................  R1-95  Install sprinkler SYST,        245
                                B. H1.
NH GUAM......................  R1-95  Replace elevators, B. 1.     2,240
NH GUAM......................  R34-93  Replace transformers/         319
                                distribution panels (Phase II).
NH JAX.......................  R3-98  RPR Elevator controls,         376
                                B. 2080.
NMC PTSMH....................  CR1-95  Install sprinkler SYS,        277
                                B 104.
NH ROOSRDS...................  R2-96  Correct life safety code     1,197
                                def/provide sprinklers, B.
                                1790.
NH ROOSRDS...................  Correct NEC Deficiencies/ R13-        931
                                96 RPL lighting protection, B.
                                1790.
NMC SDIEGO...................  R17-95 Upgrade secondary              129
                                electrical wiring (BEQ), B. 41.
NH 29-PALMS..................  CX-95  Electrical system              150
                                additions.
NMC SDIEGO...................  R13-95  Upgrade secondary             620
                                electrical wiring (BEQ), B. 26.
------------------------------------------------------------------------

    Fiscal year 1997 MILCON funding was allocated for the following 
Life Safety deficiency projects:

------------------------------------------------------------------------
               MTF                 LS Project title       LS  Funding
------------------------------------------------------------------------
NavHosp Lemoore.................  Hospital            Total $38 million
                                   replacement.
Med/Den Clinic Key West, FL.....  Clinic replacement  Total $13.6
                                                       million
Troop Med Clinic Edson Range,     Clinic replacement  Total $3.3 million
 Camp Pendleton, CA.
------------------------------------------------------------------------
NavHosp Portsmouth, VA Phase VIII/Acute Care Phase VIII $24M Facility
  (new facility).

    Question. Do you have funds in the budget to purchase new 
equipment? If so what type of equipment?
    OSD Answer. The increasing Other Procurement threshold is driving 
the need for an increased level of O&M equipment funding. We are trying 
to budget enough funds to meet this demand. This funding has not 
benefited from the $750 million alluded to earlier. Funds are budgeted 
for equipping new facilities and for normal replacement of equipment. 
The equipment type includes medical care support equipment (e.g. 
surgical drill sets, scope sets, radiographic/flouroscopic systems, 
nurse call systems, dental operating systems, etc.).
    Navy Answer. The following amounts for equipment procurement were 
included in the FY99 President's Budget:
    In house care (Within the Continental United States): $118.7 
million
    In house care (Outside the Continental United States): $10.9 
million
    The above amounts are for TRISERVE distribution and are to be 
utilized for direct patient care equipment only. The specific amount 
for each Service was not specified.

                      Patient Data and Information

    Question: Effectively managing patient information is absolutely 
vital to improving patient outcomes and hospital performance. Patient 
records should properly identify the patient, support the diagnosis and 
treatment, document results and promote continuity of care. 
Unfortunately, this has been a continuing source of error. Often, 
important data is missing from a patient's record, verbal orders are 
not recorded properly, and ancillary and important information is not 
tracked. What is being done to shore up this area? Please explain how 
automation programs will help this process.
    OSD Answer. With the Computer-based Patient Record (CPR), we will 
achieve comprehensive clinical information management, including 
simultaneous automated transmission and documentation in the patient's 
CPR. Tightly integrated orders management, results reporting, 
documentation and follow-up functions will assist patients in receiving 
seamless, quality care. The CPR, with data standardization, will enable 
a comprehensive measurement of patient outcomes, including disease 
status, health status, satisfaction with healthcare services, and 
health status outcomes.
    The CPR will require registration only once in a beneficiary's 
career, instead of at each facility visited. Orders management will be 
directly linked to the scheduling function, which will support real-
time scheduling of patient appointments, procedures, staff, and 
facilities through links with the order entry and documentation 
functions, thus enhancing patient's access to care. Most coding and 
grouping will occur automatically, based on key words. Quality 
management and utilization management processes will have available 
comprehensive aggregated clinical data, including outcomes of care 
plans and clinical pathways. This will result in a decrease of repeat 
procedures, thus decreasing costs and increasing patient satisfaction. 
The CPR will maintain the security and confidentiality of all patient 
and provider data through physical and electronic safeguards and user 
training. This will provide a comprehensive, longitudinal patient 
record spanning an individual's lifetime.
    Army Answer. The computerized patient record (CPR) will contribute 
to the effective management of patient information management and to 
the improvement of patient outcomes and hospital performance. The 
Department of Defense (DOD) relies on several computerized information 
management systems for capturing some of the information listed in the 
question above. These include the major DOD Ambulatory Data System, the 
Composite Healthcare System (CHCS) I (in existence now in at least 421 
clinics and hospitals), CHCS II, which will be undergoing alpha testing 
in the National Capital Region in August this year, the Clinical 
Information System, which is the predominant inpatient CPR system at 
several military hospitals, and the Corporate Executive Information 
System (CEIS), which examines patient outcomes at different military 
hospitals and overall hospital performance (undergoing testing at 
several sites).
    The CPR effectively manages patient data and information in many 
ways: records are always legible; lost documents are no longer a 
problem, since there is always soft copy of that document in the 
patient's CPR; results notification is readily available making it 
easier for the health care provider to make a decision on the type of 
health care to provide; data is available to more than one authorized 
user at a time making performance of patient care more efficient. Dual 
entry of data is eliminated or minimized resulting in a decrease of 
repeat procedures, improved patient satisfaction, and decreased costs. 
Coupled with this are internal validity and integrity checks, which are 
programmed into the system during the development of the CPR. Validity 
checking makes sure that value of the data element belongs to the 
correct data set (for example, the item male cannot be given a 
diagnosis assigned for a female), and integrity testing protects the 
data from unauthorized tampering into the CPR. Additional record 
keeping of patient data is manifested by registration of patient data 
and the linkage of some types of patients' orders to the patient 
scheduling appointment system and procedures. With the full deployment 
of CHCS II, which will take place over the next several years, this 
will bring in the full documentation of the health care provider's 
treatment to the patient. This system will couple problem lists and 
coding of diagnoses based on the International Classification of 
Disease-Ninth Revision-Clinical Modification and Current Procedural 
Terminology codes. Some of this coding information for diagnoses will 
be linked automatically to key documentation functions in the CPR.
    With the deployment of CHCS II, decision support modules will 
provide auditory and electronic alerts and indicators needed in the 
care of patients. These decision support systems will scan data for 
medical alerts, contraindications, and overdue examinations. These 
alerts, for example, will be helpful in minimizing errors due to 
incorrect medications and will encourage the safe and correct 
administration of drugs.
    In the areas of competence and assessing the management of the 
environment of care, the deployment of the CEIS will examine the care 
delivered by health care providers on a certain disease population of 
patients and the outcomes of that care. This will assist in identifying 
areas where more effective quality management might need to be 
utilized, and identify problem areas before they become serious 
problems. In addition, as part of the CPR, clinical guidelines in the 
form of clinical pathways are being developed for ambulatory and 
inpatient settings as well. These guidelines serve as cornerstones for 
quality management and ensure that the best possible patient outcomes 
are being met.
    Through the development of a CPR, the DOD will be able to shore up 
its current and proposed automation program and provide a 
comprehensive, longitudinal patient record spanning an individual's 
military career and retirement years. While it is unrealistic to assume 
that it will be error free, the opportunities for introducing errors 
will be significantly reduced.
    Navy Answer. A consortium has been formed with Department of 
Veterans Affairs, Indian Health Services, and Louisiana State 
University Medical Center to develop a Government-Computer-Based 
Patient Record (G-CPR). The group met in February 1998 to begin 
development of this program.
    The CPR will be an interactive and virtual data repository that 
provides a comprehensive, life-long medical record of an individual's 
health care. Appropriate portions will be easily accessible to 
authorized users when and where needed. The CPR will facilitate the 
worldwide delivery of health care, will assist individuals and 
clinicians in making health care decisions, and support leaders in 
making operational and resource allocation decisions.
    Air Force Answer. The Military Health Services (MHS), in a 
partnership with the Department of Veterans Affairs, Indian Health 
Service, and Louisiana State University Medical Center, is developing 
requirements for a Government Computer-based Patient Record (G-CPR). 
The G-CPR is intended to provide automated capture and maintenance of 
patient-centered information over the patient's life cycle. The Air 
Force Medical Service is deploying interim information systems to 
capture data to support force protection, readiness, and disease 
management activities. These systems include the Military Immunization 
Tracking System (MITS), SmartTerm Buttons, Clinically Integrated 
Workstation (CIW) Lite, and Desert Care.
    MITS is fully deployed to Air Force sites. Data that is collected 
in MITS will be interfaced with the MHS Preventive Health Care System 
(PHCS) when it is ready for deployment.
    SmartTerm Buttons is an automated tool allowing providers to 
capture ICD-9 and CPT codes at the point of care versus manually 
filling in optical character recognition (OCR) scanning sheets (the 
standard test form you need a #2 pencil for), which then have to be 
scanned into the system. SmartTerm Buttons data is then sent to the 
Ambulatory Data System (ADS) database using an interface. The interface 
also performs edit checks using business rules to check the quality of 
data being passed between the systems.
    CIW Lite is a provider workstation designed to give clinicians a 
graphical user interface (GUI) to the Composite Health Care System 
(CHCS). Functionality includes order entry, automated summary of care, 
command interest flags, as well as ICD-9 and CPT coding.
    Desert Care tracks the encounters of Air Force service members 
during their tours of Southwest Asia. All medical diagnoses and 
injuries are coded to allow tracking, follow-up, and prevention 
measures.
    Question. Do you agree that software programs will not completely 
solve problems of inaccuracy with respect to patient records?
    Answer. We agree. Whenever human intervention occurs, there is 
always the possibility of errors or inaccuracies being introduced into 
patient records. There is also the possibility of inaccuracy in records 
when the data collection is not automated or is omitted altogether, or 
when paper records have to be used. These facts are taken into account 
in all of our automation planning, system design, and risk mitigation 
strategies.
    For example, one risk is that software designed to mirror a manual 
or previous automated solution to a problem may be keystroke intensive 
or perpetuate inefficient business practices. Obviously, training is 
key to ensuring an accurate patient record. Users must know and be 
adequately prepared to input and retrieve data.
    To address these areas, we have taken a number of proactive steps:
     Extensive use of work groups to identify user requirements 
and interfaces and incorporate end user feedback into the development.
     Business process engineering efforts to identify best 
practices.
     Configuration and system capacity planning and management.
     Transition planning to specifically address patient record 
accuracy.
     Extensive test and evaluation to verify data quality.
     Traning throughout the life of the system.
    Question. What have you done to reiterate to providers that 
accurate record keeping is essential to proper patient diagnosis and 
care?
    Answer. Accurate record keeping, essential to proper patient 
diagnosis and care, is reiterated to providers on a regular basis at 
meetings such as the monthly Clinical Staff Meeting, monthly Quality 
Management Meeting, and the annual Medical Legal Briefing. Providers 
are well aware of their responsibility to maintain accurate, legible 
documentation in patient's records because it is in the patient's best 
interest as well as theirs.
    Question. Are providers evaluated on the basis of proper record 
keeping?
    Answer. Providers are evaluated on their record keeping when 
routine records reviews are performed, which is generally on a monthly 
or quarterly basis. Proper record keeping is one of many items looked 
at during a records review. Information from records reviews is 
documented and forwarded to the facility quality management coordinator 
for inclusion in the provider's credentials file. Providers can be 
denied leave and temporary duty for training if records are not up to 
date.
    Question. Do you have funds in the budget to help improve record 
keeping?
    Answer. Yes. There is $94 million in FY 99 for Development and 
Deployment in the Composite Health Care System program to improve 
automation of patient records.
    Question. JCAHO also cited Special Treatment Procedures--the use of 
restraint and seclusion--as a problem area. What is being done to 
ensure that these procedures are used appropriately? What policy is in 
place to help protect the patient?
    Answer. For the survey year 1996, JCAHO found 62.4% of the military 
hospitals in substantial or significant compliance with Special 
Treatment Procedures. In the civilian sector, 51.7% of the hospitals 
were in substantial or significant compliance. Policy and procedures 
are being addressed by all Services, but especially by those facilities 
that were deficient in this grid element. Actions by the Services have 
included notifying quality managers of current requirements, 
standardized flow sheets to facilitate more complete documentation of 
patient restraint, and staff training in patient restraint. Other 
actions to improve compliance include after action reports from 
surveyed hospitals to facilitate improvements at other facilities, 
Service level Quality Management meetings with Military Treatment 
Facilities addressing problematic JCAHO standards, pre-JCAHO site 
surveys for facilities with upcoming surveys, and dissemination of the 
DoD Quality Management Report to the field.
    JCAHO is also working their position on the issue of Special 
Treatment Procedures. Originally the policy was directed at in-patient 
mental health facilities but was expanded to hospitals. Scoring 
guidelines from the JCAHO will change in this area.

                Outcomes of Patient Care and Evaluation

    Question. The 1996 Quality Management Report also cited problems 
with military hospitals and their inability to track and evaluate the 
outcomes of patients. The use of quality reviews and performance 
measures should help providers achieve a higher standard of care. What 
are you doing to increase the use of quality reviews to improve patient 
outcomes?
    OSD Answer. The 1996 Quality Management Report (QMR) introduced the 
Special Studies component of the National Quality Management Program as 
a replacement for the old Civilian External Review Program (CERP). The 
CEPRP was initiated in 1986 in response to allegations of substandard 
care in military treatment facilities (MTFs). The CEPRP successfully 
documented that the quality of medical care delivered in the MTFs was 
not only equivalent to care provided in the civilian sector, but 
surpassed it in various instances. Under the CEPRP, cases were reviewed 
on a case by case basis against a recognized standard of care for that 
disease or procedure. While the CERP reports provided useful feedback 
on the cases reviewed, the program was designed to find substandard 
individuals and not to address quality improvements in the system.
    The ``special'' product line studies are designed to evaluate the 
quality of care (outcomes) provided across the system and the resources 
(cost) expended to achieve those outcomes. The Quality Management 
Reports, generated by the special studies, identify ``best clinical 
practices'' which are defined as the best outcomes achieved with the 
most effective use of resources. These studies have received national 
recognition by the Joint Commission for Accreditation of Healthcare 
Organizations (JCAHO) as leading the healthcare industry in outcomes 
research.
    The annual Quality Management Reports are distributed to the 
Surgeons General offices and to each MTF. In an effort to increase the 
visibility of these studies at the MTF provider level, we have 
undertaken several initiatives:
     The Special Studies are a part of the agenda for the 
Medical Executive Training Seminar (this course is designed for senior 
level staff at the MTFs). In FY 1999 we hope to initiate a similar 
program, in cooperation with USUHS faculty whereby the target audience 
will be the MTF Major/LtCol clinical service chiefs. The focus of this 
program will be helping providers use the data from the Quality 
Management Reports and ORYX program to improve care at the bedside.
     DoD(HA) made a decision to address a new Joint Commission 
accreditation requirement, called ORYX, from an MHS corporate 
perspective by using the processes already in place from the NQMP 
``special studies'' program to address the ORYX requirement. By linking 
these programs together we've given our providers greater visibility to 
both programs. (Both programs focus on patient outcomes and quality 
improvement).
     We are also conducting a pilot test of a special web site 
designed to provide an education and communication forum for providers 
on topics related to the special studies and ORYX programs.
    Question. The 1996 Quality Management Report also cited problems 
with military hospitals and their inability to track and evaluate the 
outcomes of patients. The use of quality reviews and performance 
measures should help providers achieve a higher standard of care.
    To date, a few quality reviews have been completed. However, the 
quality review process is inconsistent. Furthermore, there is little 
evidence that hospitals are changing their practices in response to the 
recommendations of these reviews.
    What are you doing to increase the use of quality reviews to 
improve patient outcomes?
    Navy Answer. In order to increase the use of quality reviews to 
improve patient outcomes, Navy Medicine is:
     Implementing the new JCAHO ``ORYX'' quality monitoring 
criteria at all naval hospitals and clinics beginning July 1998. These 
will provide quality performance measures to help improve outcomes.
     Continuing to participate with the Forensics Medical 
Advisory Service Corporation and Vector Research, Inc., which conduct 
``Best Clinical Practice'' studies for the National Quality Monitoring 
Program.
     Providing ``Lessons Learned'' to commanders of medical 
facilities when patient outcomes may be improved as a result.
    Question. What are the Services doing to follow up on clinics and 
hospitals that do not have adequate performance standards?
    Army Answer. Army medical treatment facilities, on average, 
outscore civilian institutions on overall JCAHO grid scores. Those 
receiving Type 1 or supplemental findings are not currently required to 
provide our office copies of the follow-on documents validating that 
the deficiencies have been corrected.
    Navy Answer. Navy Medicine is unaware of any naval facilities that 
do not have adequate performance standards. When an adverse outcome 
occurs, which suggests possible deviation from the accepted standard of 
care, an investigation is undertaken. If the investigation reveals a 
problem, corrective action may be recommended (if applicable), the 
provider's privileges are subject to review and modification, and the 
commander of the facility is directed to report to the Navy Surgeon 
General that compliance with recommendations has been achieved. If the 
problem is found to be systemic, the issue may be referred to the 
Medical Inspector General for surveillance. If the problem is one which 
might occur in another facility (e.g., the problem is related to drug 
packaging or equipment malfunction), a ``Lessons Learned'' is provided 
for broad dissemination so that corrective action can be taken to avoid 
similar problems in the future.
    Air Force Answer. Combined medical facility JCAHO and Health 
Services Inspection (Air Force Medical Inspector General) survey 
reports are reviewed and kept on file at the Clinical Quality 
Management Division, Office of the Surgeon General. Areas in need of 
improvement, identified by JCAHO as a Type ``1'' Recommendation, as 
well as ``best Practices'' are identified. Respective facilities are 
followed-up with to address their corrective action plans and to put 
them in contact with resources who can assist them in resolving 
deficiencies, if needed.
    In addition, the Joint Commission requires all facilities to submit 
a written progress report, within six (6) months of receiving their 
final survey report, outlining action taken to correct Type ``1'' 
deficiencies. Corrective actions must convince JCAHO that processes 
implemented have resolved the problem(s) identified or risk loss of 
accreditation.
    Question. Do the Services mandate the use of ``Best Practice''?
    Army Answer. Yes. The DOD Utilization Management Directive and the 
DOD National Quality Management Program provide guidance to the 
services in the area of ``best practice''.
    The DOD Utilization Management Directive mandates the 
identification of best practices. Under this directive, the facilities 
identify high cost, high volume, or problem prone diagnoses. The 
facility develops a health care delivery proves utilizing a disease 
management or demand management approach. MEDCOM is tracking diagnoses 
and outcome data by facility.
    The DOD National Quality Management Program identifies best 
practices and outcomes for a select group of high volume, high cost 
diagnoses. The facilities must then develop processes to reach the 
desired outcomes for those diagnoses chosen. The exception is that all 
of our facilities are mandated to implement the National Asthma 
Guidelines.
    Navy Answer. Navy Medicine does not mandate the use of ``Best 
practices'' since ``Best Practices'' are continually changing as the 
practice of medicine advances, so any mandate of today's best practice 
may be inappropriate tomorrow. In addition, there is no central 
repository of proven ``best practices'', although some federal agencies 
and specialty organizations are publishing clinical guidelines that are 
available to interested providers. Although the Navy does not require 
the use of best practices, a number of programs are underway to 
encourage and facilitate the adoption of best practices as they evolve. 
Navy Medicine is currently involved in a project focusing on the birth 
product line. Through an inclusive, interactive, iterative process, 
providers from all naval hospitals are working collaboratively to 
establish meaningful metrics, reduce variation in practice patterns, 
and identify policies that need to be changed. Ultimately, this 
approach will improve the quality of care, improve patient 
satisfaction, and reduce resource requirements and/or increase the 
number of deliveries that can be performed. Other product lines (e.g., 
orthopedics, primary care, and behavioral health) will be targeted with 
similar approaches. In addition, specialty leaders in the various 
medical specialities share best practices with their colleagues as they 
learn of valid research supporting changes in practice patterns. For 
example, the specialty leader for pediatric pulmonary disease has 
disseminated the pediatric asthma practice guidelines put forth by the 
National Heart, Lung, and Blood Institute.
    Air Force Answer. The Air Force does not mandate the use of best 
practices but highly recommends it. Initiatives launched to ensure our 
beneficiaries quality care include:
      Active participation in the DoD Quality Management 
Program through participation in Advance Medicine Clinical Studies.
      Air Force hospitals have additionally been participants 
in the Maryland Hospitals Association Quality Indicator Project (QIP) 
for over seven (7) years. The QIP focuses on measurement and comparison 
of patient outcomes. This project parallels the Joint Commission and 
the Health Care Financing Administration's (HCFA's) efforts and 
research into developing performance measures. Indicators provide a 
focus for the organization's peer review process by ``flagging'' 
instances of apparent substandard care or outcomes as well as favorable 
outcomes. Of note is the fact that Air Force inpatient facilities have 
maintained significantly better rates than the aggregate average of 
over 1,000 participating inpatient facilities nationwide on six 
clinical indicators which include: inpatient mortality, neonatal 
mortality, perioperative mortality, unscheduled readmissions, 
unscheduled returns to the operating room, and unscheduled returns to 
the special care unit.
      Activation of the Air Force Performance Measurement Tool 
(AFPMT). This tool presently includes 27 standardized measurements of 
performance. The performance measures and their automation solutions 
represent a critically important step toward incorporating the 
principles of utilization management/quality management into the Air 
Force Medical Service. The current benchmark for health care plans is 
the Health Plan Employer Data Information Set (HEDIS). The Air Force 
Medical Service PMT establishes the foundation upon which future 
performance assessment enhancements will be built. While our efforts in 
the JCAHO/HSI accreditation process continue, the AF Performance 
Measurement Tool was a crucial step toward meeting our clinical quality 
goals through the identification and sharing of ``best outcomes through 
best practices.''
      Deployment of 3 evidence-based, field-tested clinical 
practice guidelines directed at care of patients with Asthma, Diabetes, 
and Hypertension.

                        Performance Measurement

    Question. Last year, the Department indicated that it would 
establish Performance Measurement and Metrics to improve compliance 
with JCAHO standards. Have these metrics been developed?
    Answer. DoD has established a scientific council that is working 
with the Joint Commission and DoD contractors to incorporate the ORYX 
measures that the Joint Commission is developing. Concurrently, DoD is 
continuing to publish its Military Health System (MHS) Performance 
Report Card which reports JCAHO grid scores and accreditation for all 
MHS facilities.
    Question. How does DoD Health Affairs enforce compliance with JCAHO 
standards?
    Answer. DoD requires all facilities to be accredited by the Joint 
Commission on Accreditation of Healthcare Organizations IAW Department 
of Defense Directive 6025.13, ``Clinical Quality Management Program 
(CQMP) in the Military Health System''. JCAHO conducts surveys on a 
triennial basis to determine facility compliance with accreditation 
standards. Each facility's overall accreditation score (Summary Grid 
Score) is tracked by the parent Service and reported to DoD(HA) 
annually. Services are held responsible for the accreditation status 
and performance of their facilities. DoD aggregates the information on 
facility accreditation status and summary grid scores it receives from 
the Services and publishes it in the annual Quality Management Report.

                             Credentialing

    Question. The Quality Management Report recommended that DoD make 
improvements in tracking malpractice and adverse privileging actions 
against physicians and health care providers. Unfortunately, there has 
been great resistance on the part of hospital commanders and providers 
to reporting instances of questionable practice. How are you changing 
the system of reporting questionable outcomes?
    How will you improve tracking of adverse privileging and 
malpractice?
    Answer. Health Affairs has instituted the Risk Management Committee 
under the TRICARE Quality Council to closely monitor and improve the 
risk management process by providing a forum for communication and 
information sharing between DoD, the Service quality management 
directors/risk managers/general counsel, Department of Legal Medicine/
Armed Forces Institute of Pathology, and the Department of Justice. 
Metrics will be established to monitor the number of malpractice 
payments and adverse actions, the number of reports to the National 
Practitioner Data Bank (NPDB), timeliness of reports, any backlog, and 
any problems with NPDB reporting.
    An external peer review agency is being added to the process to 
review paid malpractice claims that have been categorized as ``standard 
of care met'' or a ``system problem'' by the Surgeons General Office of 
each Service. This mechanism will provide Health Affairs and the 
Services an external second opinion on the determinations made by the 
Surgeons General.
    New automated information software called the Centralized 
Credentials Quality Assurance System (CCQAS) will be a new tool 
available in the Fall of 1998 to facilitate documentation and tracking 
of malpractice and adverse actions world-wide for all Services.
    Question. How many cases of potential malpractice does each Service 
have for review? What are the backlogs?
    OSD Answer. Potential malpractice cases for each Service are: 
Army--1400 open cases, Navy--259 open cases, Air Force--140 open cases.
    The backlogs are: Army--44 cases, Navy--25 cases, Air Force--0 
cases.
    Army Answer. As of April 15, 1998:
    1. 354 paid malpractice claim cases. 109 cases pending HQ, MEDCOM 
Administrative Action.

------------------------------------------------------------------------
                                                   No. of       No. of
                 Admin Action                      cases      providers
------------------------------------------------------------------------
a. Initial Review--Backlog....................           44  ...........
b. Awaiting Provider Response.................           18           21
c. Provider Notification......................           22           29
d. Awaiting Provider Response Review..........            6            6
e. Special Panel Review.......................           10  ...........
f. SJA Adm Review.............................            1            1
g. Initial Review--less than 90 days..........            8  ...........
                                               -------------------------
      TOTAL...................................          109           57
h. Cases closed FY 98.........................           31  ...........
------------------------------------------------------------------------

    2. 245 cases pending documents from MTF (DD Form 2526) and or/ 
CCRB:

        Documents                                           No. of cases
a. MTF DD Form 2526...........................................        48
b. CCRB.......................................................       141
c. CCRB & MTF DD Form 2526....................................        56
                    --------------------------------------------------------------
                    ____________________________________________________

      Total...................................................       245

    Navy Answer. Navy currently has 90 cases in various stages of 
review. Exact number of potential malpractice cases is unknown since 
reviews have not been completed.
    Air Force Answer. The Air Force Surgeon General's Office receives 
approximately 30 malpractice claims each month to complete final 
standard of care review. We maintain a balance of 100 to 150 cases open 
in various stages of review. The Air Force closes 20 to 30 cases each 
month.
    The backlog of paid malpractice claims which require closure and 
potential reporting to the National Practitioner Data Bank (NPDB) are 
part of this total number of open claims. As of April 1, 1998, the Air 
Force has a balance of 51 paid malpractice claims that require final 
standard of care determination and potential NPDB Reporting. Of theses 
51 cases the majority (38) have at least one determination that 
Standard of Care was not met. These 38 cases are in the process of 
being closed by the Air Force which involves: (1) notification of the 
involved provider(s) to respond to the claim, (2) Air Force Clinical 
Review/Medical Practice Review Board and (3) Air Force Surgeon General 
review.
    The remaining 13 backlog cases include 8 cases where standard of 
care is met, 1 case where standard of care is indeterminate, and 4 
cases that have not been received by the AF Surgeon General's Office 
for review.
    The balance of backlog cases fluctuates each month for the Air 
Force, as legal closures are reported to the Surgeon General every 
month. For example, in January 1998, six Air Force claim payments were 
reported and in February 1998, seven payments were reported.
    Question. Why do we still have backlogs? When do you plan to have 
these cases completed? What are the impediments to doing so?
    Answer. We have backlogs for many reasons. Processing time from 
when a claim is filed until it is closed may take many years. Most risk 
management departments at the Surgeons General Office are only 1 or 2 
people deep. Communication between the Department of Justice, Service 
Judge Advocate General's Office, and the Service Risk Management 
Department is disjointed since they are all separate from each other. 
(The contractor cleaning up the backlog for Army and Navy, started work 
at the end of March 1998.)
    Army anticipates their backlog will be completed by the end of 
August 1998 and Navy by the end of June 1998.
    The impediments to cleaning up the backlog include old cases with 
no first hand historical knowledge of events, records, not available 
for review, incomplete records missing documents, tracking down 
documents, tracking down providers who may have transferred to another 
base, separated from the Service, or retired.

Status of Physicians and Providers Cited for Malpractice in the Dayton 
                                 Series

    Question. In October of 1997, the Dayton Daily News, published a 
series of articles on military medicine. The paper reported that 
several doctors in the military health system were allowed to practice 
even though they had been involved in or linked to malpractice.
    According to the Dayton Daily News, Dr. Thomas J. Conage, an Air 
Force Colonel, ``used someone else's license, and continued as Chief 
Flight Surgeon'' at Tinker Air Force base in Oklahoma for six months. 
According to the story, he was reprimanded but continued to practice 
medicine for a year after that. Will you please explain the nature of 
Dr. Conage's reprimand. Was he allowed to retire? Was the disciplinary 
action in this case sufficient to guard against this type of problem?
    Air Force Answer. Please see the response to Mr. Hobson for the 
record for the specific timeline of events regarding this issue, which 
answers the first two questions above.
    There was never a concern about Dr. Conage's clinical performance; 
he provided good quality medical care. ------. We have no evidence of 
incompetence or negligent treatment of any patient by Dr. Conage.
    Question. Dr. Jerry Mothershead, a physician at Portsmouth Naval 
Hospital, was allowed to work in an emergency room ``after he had been 
drinking''. The article says that he had at least a dozen episodes of 
drinking that lasted ``three to four days each'' between 1991 and 1994. 
Nevertheless, the articles report the Commander of the Navy Medical 
Corps, Dr. W.A. McDonald, wrote to the Virginia Medical Board saying 
that: ``I have seen no evidence that Dr. Mothershead's alcoholism has 
any current impact on his ability to practice medicine.''
    The articles say that Dr. Mothershead is still at Portsmouth Naval 
Hospital. Is this true? Was Dr. McDonald reprimanded for his letter on 
behalf of Dr. Mothershead? What are you doing to get the message out to 
hospital commanders that this sort of situation will not be tolerated? 
How do you intend to enforce his policy?
    Navy Answer. Dr. Mothershead currently holds a full, unrestricted 
Virginia medical license and holds emergency medicine privileges at NMC 
Portsmouth. He also serves as the Navy Surgeon General's specialty 
leader for pre-hospital emergency care and is a nationally recognized 
expert in the field.
    To our knowledge, Dr. McDonald was not reprimanded for his letter. 
Thorough review indicated there was no evidence that Dr. Mothershead's 
alcoholism ever affected his professional responsibilities. He has not 
been the subject of any medical malpractice complaints.
    The Navy Medical Department is responsible for providing care to 
all of its beneficiaries, including its staff. When Dr. Mothershead 
sought rehabilitation treatment, the medical department provided that 
support and assisted him through a difficult time. Subsequently, he 
continues to be a valuable asset to the Navy Medical Department.
    All of our MTF commanders are aware of the ``Zero tolerance'' 
policies. The DoD and Service policies provide specific guidelines for 
actions to be taken in these types of cases. The guidelines were 
established to protect the Government, as well as the individual.
    Air Force Answer. Air Force Instruction 44-119, Medical Service 
Clinical Quality Management, published in October 1995, provides 
guidance to commanders on malpractice claims and adverse privileging 
actions. Commanders are required to take an adverse privilege action 
(suspension, restriction, revocation) when a provider's conduct, 
impairment or professional competence impacts patient care or could 
adversely affect patient care. This policy further defines an impaired 
provider as ``a provider who by reason of alcohol or drug abuse, 
emotional disturbance, or medical condition has exhibited 
unprofessional conduct, substandard medical practice or professional 
incompetence, which is, or is reasonably probable of being, detrimental 
to patient safety or the proper delivery of quality patient care.''
    Question. According to the Dayton Daily News, Dr. Edner C. 
Monsanto, a pediatrician at Kings Bay, was involved in two cases of 
malpractice. One involved the misdiagnosis of a child who had 
meningitis, and resulted in permanent disability. A judgment of $1.9 
million was paid. A second case resulted in permanent damage to an 
infant. A judgment of $4.2 million was paid according to the Dayton 
Daily News. Dr. Monsanto is still practicing at Kings Bay.
    What, if anything, was done in the aftermath of these judgments to 
ensure that other patients were not put in jeopardy? Is Dr. Monsanto 
being supervised? Has he had limits put on his privileges because of 
these recent malpractice cases? If not, why not?
    Navy Answer. The two cases mentioned in the articles occurred six 
to seven years ago. There are no other instances where CDR Monsanto's 
care has been found to be below the required standard. In November 
1997, CDR Monsanto underwent extensive Peer Review and was found to be 
a safe, capable provider. There is no basis to limit or revoke his 
privileges.
    Question. According to the Dayton Daily News, one of the most 
troubling cases cited in the Dayton Series is that of Dr. Gary Davis. 
Apparently, Dr. Davis had a history of malpractice before he entered 
the Army. Did the Army review Dr. Davis history prior to assigning him 
to be Chief of Obstetrics in Fort Benning? Was Dr. Davis' truthful 
about his professional history during his initial interviews?
    Army Answer. The standard physician procurement process was used to 
bring Dr. Davis into the Army. This process includes: verifying all 
graduate medical training, verifying that all licenses were 
unrestricted and that at least one license was current, obtaining 
letters of recommendation, obtaining an interview letter from a senior 
OB/GYN physician on active duty, obtaining Officer Evaluation Reports 
from prior military service, obtaining a current curriculum vitae, and 
filling out a health and profession status statement. All of these 
documents and verifications were obtained for Dr. Davis prior to his 
appointment.
    As with any process that relies in part on self-reported 
information, the accession procedures are vulnerable to willful deceit. 
Measures to assure the accuracy of self-reported information, including 
notifying the applicant in writing of the consequences of making false 
official statements are a part of the accession process. Dr. Davis 
answered in the negative to the question asking if he ever had 
professional privileges denied, withdrawn or restricted by any 
healthcare facility. In fact, his privileges had been suspended and 
never restored at Baptist Hospital in Arkansas (1979). On his C.V., he 
accounted for the period of time in 1978 by saying that he did locum 
tenens and a ``brief'' fellowship at the University of Alabama. We now 
know that time was spent on the housestaff at the Baptist Hospital 
where his privileges were suspended.
    Although Idaho verified his license as being current and 
unrestricted, we now know that he was under investigation in Idaho at 
the time of accession into the Army Medical Corps. There was no way for 
the Army to have known this at that time since Idaho would not release 
such information until action was completed. As a direct consequence of 
the Army's discoveries regarding Dr. Davis' inaccurate reporting of his 
own professional history, he was placed before an Army ``Show Cause'' 
board. The purpose of a show cause board is to recommend whether or not 
an officer should be retained in the face of certain negative 
performance criteria, which can include substandard performance of 
duty, misconduct, moral or professional dereliction, or actions clearly 
inconsistent with national security. After considering all of the 
evidence in Dr. Davis' case, the board, comprised of and presided over 
by line officers, recommended that Dr. Davis be retained on active 
duty.
    Question. Has the Army reviewed Dr. Davis' professional 
qualifications--particularly in light of the Dayton Daily News 
articles?
    Army Answer. The Madigan Army Medical Center Credentials Committee 
has fully reviewed Dr. Davis' professional qualifications and 
competency, both in light of the Dayton Daily News articles and as part 
of regular review, and cannot justify any adverse privileging actions. 
Dr. Davis' professional record since entry on active duty is totally 
devoid of any adverse findings.
    Question. How and why was Dr. Davis assigned as Chief of Gynecology 
and Urogynecology at Madigan Army Hospital?
    Army Answer. Dr. Davis was assigned as the Chief of Gynecology and 
Urogynecology at Madigan Army Medical Center due to his experience and 
his qualifications in the area of gynecologic and especially pelvic 
floor reconstructive surgery. Dr. Davis has done solid research in the 
area of pelvic floor injuries and pelvic floor reconstruction. This 
research is directly related to pelvic floor injuries that are much 
more common in females on active duty in the Army and are especially 
related to the achievement of airborne qualifications. This research is 
especially pertinent to women's health in the Army but has much broader 
general implications in the treatment of pelvic floor injuries and 
their sequelae.
    Question. The Dayton Daily News articles say that Dr. Davis was 
able to obtain the rank of full Colonel. Is this true?
    Army Answer. Dr. Davis was promoted to full Colonel while at 
Fitzsimons Army Medical Center. Given that there is no adverse clinical 
or military information in Dr. Davis, Army file, since his entry into 
Army active duty, withholding a promotion could not be justified.
    Question. Does the Surgeon General and the Army Medical Command 
make decisions about the promotion of its providers?
    Army Answer. Officer promotions in the United States Army are 
granted on the recommendation of a duly constituted board under 
provisions of Army regulations. These boards consider information in 
the officer's official personnel file for their recommendations. The 
Board's recommendation for promotion must then be approved by Congress 
and the president. Medical Command's input into this process is by data 
entered into the record, which accurately reflects an individual's 
professional and military performance.
    Question. Is Dr. Davis still assigned to Madigan? Did the 
credentialing committee review his professional story?
    Army Answer. Dr. Davis is currently assigned to Madigan Army 
Medical Center. His full clinical record was most recently reviewed on 
8 January 1998. Based on that review, the Credentials Committee 
continued Dr. Davis' full clinical privileges in obstetrics and 
gynecology.
    Question. According to the Dayton Daily News articles, Dr. Andrew 
Curtis Faire was linked in malpractice lawsuits to the deaths of four 
patients at William Beaumont hospital in Texas. Is he still practicing? 
Has he been disciplined? Have his clinical privileges been limited, 
suspended or revoked? What were the problems associated with these 
deaths? Has an external review group reviewed these cases?
    Army Answer. William Beaumont Army Medical Center (WBAMC) has 3 
documented cases in which Dr. Faire was involved where a death 
occurred. In 1984, Dr. Faire did not recognize the significance of an 
abnormal blood test, and the patient's eventual diagnosis of chronic 
leukemia was delayed. The Risk Management Committee determined that the 
delay in diagnosis did not change the patient's treatment or outcome. 
The second case involved a 67 year old retired soldier who died 
suddenly. He had been under Dr. Faire's care for ten years. In the 
months before the patient's death, Dr. Faire had treated him for muscle 
pains in the arms and shoulders. With the benefit of hindsight, the 
pains may have been due to angina pectoris, but this is speculative. In 
the third case, an abnormal chest x-ray was misinterpreted, leading to 
a delay in diagnosis of lung cancer. Dr. Faire's care of these three 
patients was fully evaluated by the Risk Management Committee, and the 
Committee decided that Dr. Faire had met the standard of care in each 
case. Dr. Faire continues to practice in the Adult Primary Care Clinic 
at WBAMC.

               Plan To Improve the Quality of Healthcare

    Question. In November, the Acting Assistant Secretary of Defense 
for Health Affairs (ASD/HA) Dr. Edward Martin, proposed a 13 point plan 
to fix the problems identified in the Dayton Daily News articles. In 
January, the plan was adopted and established as Department policy. The 
Services have been notified of the new policy and are working toward 
achieving the objectives of the plan.
    The plan includes the following objectives:
          1. Improve Reporting to the National Practitioner Data Bank 
        (NPDB);
          2. Eliminate the use of providers who do not have valid 
        medical licenses (such as the Oklahoma license);
          3. Establish Healthcare Consumer Committees;
          4. Improve communication with beneficiaries;
          5. Provide a Patient Handbook to inform beneficiaries about 
        the qualifications of healthcare providers;
          6. Improve Customer Satisfaction;
          7. Reestablish use of the Quality Management Report;
          8. Establish Centers of Excellence;
          9. Pursue full implementation of TRICARE;
          10. Phase out the use of General Medical Officers (recent 
        medical school graduates with only one year of training);
          11. Evaluate the Military Health Services System (MHSS) 
        weaknesses on a continual basis;
          12. Strengthen the National Quality Management Program; and
          13. Improve automation.
    The Dayton Daily News series criticized the Military Health 
Services System (MHSS) for not reviewing malpractice cases 
expeditiously and for blaming malpractice on the system in order to 
protect individual providers and doctors.
    Dr. Martin has acknowledged these weaknesses. His plan includes a 
three pronged approach to address the problem: (1) conduct an internal 
DoD Inspector General audit to determine the extent of the problem, (2) 
insist that the Services retire their backlog of cases, (3) use an 
external civilian panel to determine whether or not malpractice has 
occurred. So far, none of these goals have been accomplished. Moreover, 
the Services still have large numbers of cases requiring review.
    The Army has a backlog of 131 malpractice cases. Of these 131 
cases, 91 are awaiting external peer review and 40 are in final 
processing. The Navy has a backlog of 130 cases. The Air Force has no 
backlog at this time.
    How many medical complaint cases are currently pending? What is the 
size of the backlog of cases for the Army?
    Army Answer. There are 109 cases pending MEDCOM administrative 
processing as of April 15, 1998. MEDCOM has a backlog of 44 cases as of 
April 15, 1998 awaiting initial review.
    Navy Answer. Navy currently has 90 cases in various stages of 
review. By strict DoD definition there is no longer any backlog, as all 
cases are in some stage of review.
    Air Force Answer. The Air Force has a current balance of 51 paid 
malpractice claims that require final standard of care determination 
and potential NPDB reporting. Of these 51 cases, the majority (38) have 
at least one determination that Standard of Care was not met. These 38 
cases are in the process of being closed by the Air Force which 
involves: notification of the involved provider(s) to respond to the 
claim, Air Force Clinical Review/Medical Practice Review Board and Air 
Force Surgeon General review. The remaining 13 backlog cases include 8 
cases where standard of care is met, 1 case where standard of care is 
indeterminate, and 4 cases that have not been received by the Air Force 
Surgeon General's Office for review.
    The balance of backlog cases fluctuates each month, as legal 
closures are reported to the Air Force Surgeon General every month. For 
example, in January 1998, six Air Force claim payments were reported, 
and in February 1998, seven payments were reported.
    Question. Of the cases that have been completed, how many instances 
of malpractice can be attributed to an individual provider?
    Army Answer. Under the DOD agreement with National Practitioner 
Data Bank only those who also did not meet standard of care can be 
reported. This currently is 18 Health Care Providers of 46 cases closed 
since 15 Jan 98. In the process, either awaiting a response from the 
provider, or awaiting locating the provider we have identified 56 more 
providers to be reported to the National Practitioner Data Bank in 55 
cases. Remember that cases of either ``system'' error or standard of 
care met can be closed quickly while the NPDB process allows providers 
time to respond to a proposed submission, this necessitates a delay.
    Navy Answer. There are two documented instances where a provider 
has been the subject in more than one malpractice case.
    Air Force Answer. Approximately 40 to 50 percent of paid 
malpractice claims identify individual providers who breached the 
standard of care in a way relevant to the cause of the complaint. Of 
130 paid claims that have been closed since 1996, 46 cases (35 percent) 
identified providers who breached the standard of care, 81 cases (62 
percent) identified providers who met the standard of care and 3 cases 
(2 percent) were found to be indeterminate. Indeterminate means 
information was insufficient to make a standard of care determination.
    Question. Aside from reporting a practitioner to the national data 
bank, what disciplinary or remedial actions are taken to guarantee that 
the provider does not cause further harm? Who makes these decisions?
    Army Answer. In accordance with Joint Commission guidelines these 
decisions are local and reviews completed by the local Credentials 
Committees and Privileging Authority. These groups function the same as 
in a civilian hospital to limit privileging and thus practice of 
Providers who do not meet standard. The Joint Commission oversees this 
in all Army hospitals and all are in compliance.
    Navy Answer. The Navy does not wait until a malpractice claim is 
paid to take action. Any time a potentially serious incident occurs, a 
thorough investigation is done. If the investigation reveals that a 
provider's care deviated from the standard, the provider's actions are 
reviewed to determine why the breach occurred. If the deviation was 
because of lack of training, the provider is referred for training and 
supervised until competency is demonstrated. If the situation cannot be 
corrected through training or supervision, an appropriate privileging 
action is taken. All of this occurs usually before a claim is made and 
well before any payment is made. The MTF/DTF commander is responsible 
for initiating these actions.
    Air Force Answer. Reporting to the National Practitioner Data Bank 
(NPDB) for malpractice payment is not intended as a punitive event and 
does not require disciplinary action. The intent of reporting 
malpractice payments to the NPDB is to alert credentialing agencies, 
licensure boards and privileging entities of the provider's malpractice 
history. This information must be considered along with other relevant 
data when evaluating a practitioner's credentials. In addition, a copy 
of each NPDB report made by the Air Force is forwarded to the state 
licensing board(s) for the involved provider. These state licensing 
boards may conduct their own investigation and take a licensure action 
against the provider as they deem appropriate.
    Commanders at each medical treatment facility are expected to 
initiate appropriate administrative or military justice action when any 
adverse professional action involved illegal or unprofessional conduct 
that violates the Uniform Code of Military Justice.
    In addition to the above actions, Air Force headquarters notifies 
our medical treatment facility if a provider is found to have deviated 
from acceptable standards in more than two malpractice claims over a 
three-year period. The medical treatment facility commander is asked to 
review the practice of the provider and determine if further action is 
warranted. The commander is required to provide a report of actions 
taken to the Clinical Quality Management Division at the Air Force 
Surgeon General's Office.
    The Air Force has an effective program of peer review, credentials 
and privileging, a requirement for providers to receive continuing 
education, and a mechanism for removing providers from practice if 
needed. Commanders at each Air Force medical treatment facility grant 
privileges to providers and are authorized to initiate an adverse 
privilege action as needed. These actions may include complete removal 
from patient care duties (revocation of privileges) or a reduction or 
restriction of some patient care duties. Final review of adverse 
privileging actions lies with the Air Force Surgeon General. Adverse 
privileging actions are also reported to the National Practitioner Data 
Bank.
    Question. Of the cases that have been completed, how many instances 
of malpractice can be attributed to ``system'' problems?
    Army Answer. In 6 cases of 46 closed since mid January 1998 we have 
attributed the cause to a ``system'' error.
    Navy Answer. Less than 20 percent of malpractice cases completed 
are related to ``system'' problems.
    Air Force Answer. Very few cases of malpractice are attributed 
exclusively to system problems. A review of closed claims from 1996 to 
1997 revealed three cases of malpractice that were attributed solely to 
system problems. However, each claim is reviewed from a systems 
approach at the medical treatment facility, major command, and 
Headquarters Air Force to identify and analyze system problems that may 
have impacted the quality of patient care given. The identification of 
system concerns is in addition to the obligation to identify individual 
providers who are significantly involved in care at issue in the claim.
    Question. Who is accountable when it is deemed that the ``system'' 
is to blame? How do you correct problems in these instances?
    Army Answer. The commander is responsible. Current NPDB guidelines 
do not allow for the CEO of a civilian hospital, and thus by extension 
a military commander, to be entered for system errors. The NPDB was 
designed to prevent practitioners from escaping consequences of their 
actions by frequent relocations, thus it is a system designed for 
practitioners. The Joint Commission envisioned system errors in their 
mandate for a Risk Management process. They require all hospitals to 
review untoward events and seek to establish a pattern requiring 
change. The new Joint Commission requirement for ``Sentinel Event 
Monitoring'' will be even more helpful to the public at large in 
minimizing system errors and providing a safer environment in which to 
receive Health Care.
    Question. Who is accountable when it is deemed that the ``system'' 
is the blame? How do you correct problems in these instances?
    Navy Answer. Commanding Officers (COs) are accountable for what 
occurs within their facilities. System failures are investigated like 
any other incident. Once a determination is made that a problem is due 
to a ``system error'' the CO takes appropriate corrective action. All 
``system error'' investigations are reported to the Bureau of Medicine 
and Surgery (BUMED), if there is any chance that such an error could 
occur at another facility, BUMED takes steps to alert all COs of the 
potential problem and how to prevent it. Lessons Learned and Risk 
Alerts are disseminated to every Navy military treatment facility to 
prevent recurrence of any systems problems.
    Air Force Answer. A final review of all malpractice claims is 
conducted by the Air Force Surgeon General's Office. System problems 
are identified, if present, in addition to individual providers names. 
If all individual providers were found to have met the standard of 
care, then the system problems identified are analyzed to determine if 
they contributed to the harm the patient suffered. A medical treatment 
facility Quality Assurance review accompanies each claim. In this 
review, the hospital examines the case and identifies opportunities for 
improvement and lessons learned. These reviews assist in policy 
development. System problems identified, lessons learned, risk 
prevention strategies, and clinical alerts are disseminated frequently 
to all medical treatment facilities for education, risk prevention 
purposes, and to facilitate continuous quality improvement.
    Question. How many providers who currently practice in the Military 
Health Services System (MHSS) have been reported to the National 
Practitioner Data Bank?
    Army Answer. Provider reported to NPDB for adverse action--as of 29 
Apr 98: 94 total providers reported; 9 listed in the Centralized 
Credentials Quality Assurance Systems House; 1 Still on Active Duty; 8 
civilians.
    Providers reported to NPDB for malpractice--as of 29 Apr 98: 54 
total providers reported; 8 listed in the Centralized Credential 
Quality Assurance Systems; 7 still on active duty; 1 civilian.
    Navy Answer. The Navy has reported 78 physicians to the National 
Practitioner Data Bank for malpractice. 92 providers have been reported 
for Adverse Privileging Actions.
    Air Force Answer. 125 providers who have a National Practitioner 
Data Bank (NPDB) report currently practice in the Air Force Medical 
Service. This number was obtained from the Centralized Credentials 
Quality Assurance System which tracks when the medical treatment 
facility queries the NPDB and if the NPDB has information on file. 
There are 5,257 physicians and dentists on active duty, therefore 2.3 
percent of our current providers have been reported to the NPDB.
    Question. Has an audit by the DoD Inspector General been completed?
    Answer. The audit has been completed and the DoD Inspector General 
issued a ``Draft of a Proposed Evaluation Report'' on April 6, 1998. 
The DoD response to the report is due June 6, 1998.

      Eliminate the Use of Providers With Invalid Medical Licenses

    Question. The Dayton Daily News identified 77 doctors in the 
military with a special Oklahoma License. The license was issued to 
doctors who could not even meet the minimum requirement required to 
practice on civilians. According to the Dayton Daily News, ``Nearly all 
of the 77 military special licensees either failed the state licensing 
exam . . . or had no evidence that they ever took it.'' One military 
doctor, Dr. Dae Oh Kang, failed the U.S. Medical Licensing Exam (USMLE) 
30 times.
    Prior to the publication of the articles, was DoD aware of the 
existence of the special Oklahoma license?
    Answer. Prior to the publication of the articles, DoD was not aware 
of the continued existence of the special Oklahoma license.
    Question. What has been done or is being done about the special 
Oklahoma license?
    Answer. Providers with the special Oklahoma license have been 
removed from clinical practice or practice under direct supervision of 
a licensed physician. Providers have been given until April 1999 to 
obtain an unrestricted license from Oklahoma or from another state.
    Question. How many of these doctors are still in service? Are they 
supervised? Have they been removed from clinical practice?
    Army Answer. The Army Medical department has eight (8) physicians 
with Oklahoma Special licenses. None of these physicians practice 
medicine in any capacity at this time. All are in non-clinical duties. 
DOD (HA) has issued a policy to begin removal of these physicians from 
the service if they have not completed ordinary licensure by 30 April 
1999.
    Navy Answer. Seven Navy physicians with a special Oklahoma License 
remain on active duty. One out of the seven has requested retirement 
effective December 1, 1998.
    Yes, all seven are practicing medicine under a written plan of 
supervision, in accordance with Department of Defense and Bureau of 
Medicine and Surgery directives.
    No, the seven Navy physicians with a special Oklahoma License have 
not been removed from clinical practice.
    Air Force Answer. I presume you are referring to those physicians 
with an Oklahoma ``Special'' license. Currently, there are six (6) Air 
Force physicians with this license. The four that are in clinical 
positions were placed on supervised privileges, which means a fully 
licensed physician-supervisor is responsible for the medical care 
provided by the supervisee. The remaining two physicians are in full-
time administrative duties and are not treating patients.
    All Air Force physicians with the Oklahoma ``Special'' license are 
to obtain full licensure no later than April 30, 1999. This timeframe 
was established in order to allow for the minimal amount of time 
necessary to take all three parts of United States Medical Licensing 
Exam (USMLE), a requirement for full licensure.
    Question. What changes are being made to ensure that all physicians 
in the military medical system have a valid and unrestricted medical 
license?
    Answer. Policy memorandum ``Management of medical Licensure & 
Modifications of Reporting Procedures Regarding the National 
Practitioner Data Bank'' was signed and promulgated February 3, 1998. 
The memorandum restates DoD policy that all health care personnel must 
have a current, valid, and unrestricted license. The license issue has 
been discussed at the TRICARE Quality Council, the Risk Management 
Committee, and will be discussed at the Military Health System 
Executive Committee May 6, 1998. The Oklahoma Licensing Board decided 
not to convert any of the ``special'' military licenses to regular 
unrestricted licenses.

            Establishment of Healthcare Consumer Committees

    Question. Under DoD's new policy, Military Treatment Facility (MTF) 
commanders will establish committees of health care consumers. The 
purpose of these committees will be to assist the MTF commanders in 
identifying and solving problems. Special attention will be given to 
the needs of enlisted personnel. What is the Healthcare Consumer 
Committee? How do you expect the Healthcare Consumer Committee to 
improve quality and solve problems at the local level?
    Answer. The Healthcare Consumer Committee is composed of 
representatives from the military community served by the MTF. The 
purpose of the committee is to: 1) provide a forum for beneficiaries 
using the MTF to raise issues or provide feedback to the facility 
commander; and 2) enable the MTF commander and staff to inform the 
community of new programs, issues or proposed changes that may impact 
healthcare services at the MTF. Input from consumers is an essential 
component of consumer satisfaction. Without this input, those providing 
healthcare services will not know if they are successful in meeting the 
expectations of the consumers they serve.
    Question. Do you expect that these Committees will enhance the 
accountability of hospital commanders and providers?
    Answer. Yes. In facilities where this committee has been active 
we've found that the members take their position as representatives of 
the healthcare consumer community seriously. They actively solicit 
complaints and questions from their neighbors and coworkers and bring 
their concerns to the meeting. The membership expects answers that they 
can take back to the community. The MTF commander has the opportunity 
of hearing, first hand, how his beneficiaries or consumers feel about 
the facility's performance and where improvements in the system might 
be made.
    Question. What is being done to accommodate the concerns of the 
beneficiaries, particularly the enlisted community?
    Answer. Before concerns can be addressed they have to be brought to 
the attention of those, in authority, who are able to take action. The 
military rank structure does not normally lend itself to a free 
exchange of dialogue between officers and enlisted, particularly if 
they are assigned to different commands. Forums such as the Health Care 
Consumer Committee give the enlisted member a voice to express concerns 
and suggestions he/she may have about the healthcare system. Other 
forums for consumer input will vary depending upon the Service, and the 
command policy at the specific facility. Facilities usually have a 
designated patient representative officer (PRO) or ombudsman who serves 
as the consumer's advocate on a case by case basis. In addition to 
working with consumers individually, the PRO provides the command with 
a monthly summary of any trends or significant issues relating to 
consumer dissatisfaction. The advent of TRICARE has brought a renewed 
interest in consumer education. Consumers are asking for more 
information about their medical benefits, how to access the healthcare 
system, and how to take responsibility for maintaining their health.

               Improved Communication With Beneficiaries

    Question. DoD believes that open communication with its 
beneficiaries will improve the quality of care that is delivered. As 
part of this initiative, DoD plans to issue a ``Report Card'' on the 
quality of care being delivered at specific facilities. The Report Card 
information will also be posted on the Internet. DoD hopes to restore 
some confidence in the military medical system by using these measures.
    The Dayton Daily News series called into question the competence of 
the military medical system and eroded consumer confidence in the 
system. How do you intend to rebuild consumer confidence in the system?
    Answer. Educating consumers is the best way to restore confidence 
in the healthcare system. The educated consumer is better able to 
discern objective evidence of healthcare quality and put media 
allegations into their proper perspective. Evidence of quality may 
include: report cards, satisfaction surveys, facility accreditation, 
and board certification. Quality measurement is ongoing in the Military 
Health System (MHS). New initiatives, such as the MTF report card and 
the Healthcare Provider Directory will bring these measures to the 
consumer. Additionally, the Healthcare Consumer Committee will provide 
a forum for the consumer's concerns or complaints.
    In addition, with the creation of the TRICARE Management Activity, 
a special office dealing with Communications and Customer Service has 
been created. One of the principal functions of this office is to 
answer customer inquiries and examine trends in beneficiary concerns to 
effect rapid program corrections. While we have for several years had a 
Home Page with large volumes of TRICARE Program information available 
to our beneficiaries, we are redesigning it to allow a separate and 
specific entry point for beneficiaries to access important information 
on the TRICARE Program. I expect this redesign to be complete this 
summer and anticipate that the Internet address will be www.tricare.mil 
for those who desire to access it.
    Question. How do you plan to increase accountability and provide 
incentives to improve the quality of care? How will you hold hospital 
commanders and providers accountable for their actions? How will you 
provide information to the beneficiaries about the quality of their 
care? Will you explain the concept of the Report Card?
    Answer. To increase accountability and provide incentives to 
improve the quality of care, a Healthcare Consumer Committee will be 
established at all facilities to meet monthly with the hospital 
commander. The majority of representatives on the committee will be 
consumers and a priority will be placed on enlisted personnel issues.
    Hospital commanders are accountable for their actions based on many 
factors which include patient satisfaction, performance on Service 
specific Inspector General surveys, and performance on Joint Commission 
on Accreditation of Healthcare Organizations (JCAHO) surveys. Provider 
accountability is also based on multiple factors to include patient 
satisfaction, privileging based on past performance, quality of care 
reviews, and attendance of continuing education to maintain licensure.
    The MTF Report Card will be posted in a conspicuous place at the 
facility to enhance communication between patients and the MTF. The 
report card will address facility performance in key areas such as 
waiting times for major services, patient satisfaction, JCAHO survey 
results, and four of the grid element scores from the JCAHO survey. The 
Healthcare Provider Directory will also be available to patients to 
read about the qualifications and background of the provider they are 
seeing for their care.

                            Patient Handbook

    Question. The Dayton Daily News articles criticized the military 
for failing to provide information to patients about the qualifications 
and background of its doctors and providers. The Patient Handbook will 
include basic data on each provider, such as where they attended 
medical school, their licensure and board certification information.
    What will you do to increase confidence of beneficiaries regarding 
the qualifications of those who are providing their care? Will you 
please explain the idea behind the Patient Handbook? What kind of 
information will it provide? How will it help beneficiaries?
    Answer. The Healthcare Provider Directory (patient handbook) will 
be standardized throughout all DoD facilities. Although each MTF may 
include additional information, all MTFs must use the DoD prescribed 
template for the directory's cover and healthcare provider listing. The 
standardization is designed to assist consumers in recognizing this 
reference and encourage its use once matched with a PCM, referred to a 
specialty clinic, or assigned to a new duty and MTF location. The 
directory will provide the following information on each healthcare 
provider: name; medical school and year of graduation; residency 
location, specialty and year of completion; board certification; States 
where licensed; practice specialty; clinic where provider is located 
and clinic phone number. Through the use of the Healthcare Provider 
Directory, consumers will see that military physicians are highly 
educated and meet or exceed the qualifications of their civilian 
counterparts.

                     Improve Customer Satisfaction

    Question. DOD will continue to evaluate data such as access 
standards and customer satisfaction survey results to try to improve 
customer satisfaction. Specific data will be posted in medical 
facilities so that beneficiaries will understand what they can expect 
from their health care system. What measures are you taking to increase 
customer satisfaction with their health care?
    Answer. The Healthcare Consumer Committee has been established to 
give the hospital commander direct input from patient representatives 
about their concerns. The Annual Health Care Survey of DoD 
Beneficiaries is used to collect worldwide data from all beneficiaries 
eligible for military healthcare on access, satisfaction, health status 
and use of services. The Customer Satisfaction Survey is used to 
collect data monthly and focuses entirely on patient satisfaction at 
the military treatment facility level.
    Question. TRICARE should help manage resources better but what 
specific things do you intend to do to increase patient satisfaction on 
a facility to facility basis?
    Answer. To increase patient satisfaction on a facility to facility 
basis, limits on waiting times for acute, routine, and specialty 
appointments have been established to maintain reasonable access times 
for patients. Patients are also assigned to a primary care manager to 
facilitate continuity of care. The Healthcare Information Line has been 
instituted to allow patients to call in about healthcare topics, 
healthcare maintenance/guidance, or for advice when they or a family 
member are ill. As previously mentioned the MTF Report Card, Provider 
Directory, and Healthcare Consumer Committee have all been established 
as other means to increase patient satisfaction and communication.
    Question. What type of information will be posted in Military 
Treatment Facilities to help beneficiaries understand what they can 
expect with TRICARE?
    Answer. Military Treatment Facilities will post the MTF Report Card 
addressing waiting times for appointments, patient satisfaction results 
from surveys, the Joint Commission on Accreditation of Healthcare 
Organizations (JCAHO) Summary Grid Score, and four grid element scores 
from the JCAHO survey. Provider Directories will also be available for 
patients to review the qualifications and background of the providers 
they see.

                       Quality Management Report

    Question. DOD will reestablish the use of the Quality Management 
Report (QMR) to help evaluate the Military Health Services System 
(MHSS). A QMR that was published in 1996 was very effective in 
identifying weaknesses in the system. When will you reestablish the use 
of Quality Management Reports?
    Answer. The next Quality Management Report is anticipated to be 
published at the end of June 1998.
    Question. What type of evaluations will be done to identify quality 
problems? Will you please provide some examples?
    Answer. The Quality Management Report evaluates the areas 
comprising the National Quality Management Program for the Military 
Health System. Specifically the areas evaluated are licensure of 
providers, accreditation status and aggregate Joint Commission on 
Accreditation of Healthcare Organization (JCAHO) scores for medical 
treatment facilities, credentials and privileging issues, medical 
readiness, utilization management, National Practitioner Data Bank and 
Defense Practitioner Data Bank issues, and Special Studies for 
determining best practice at military treatment facilities.
    Quality problems are identified in the Annual DoD Quality 
Management Report by evaluating: licensure status of all practitioners, 
board certification rates for physicians, dental readiness for 
personnel based on oral health, the summary grid score average for DoD 
and problematic grid elements for DoD, JCAHO accreditation of hospitals 
and clinics in the Services, mammography certification in the Services, 
results of the Special Studies, access to care, patient satisfaction, 
and reporting to the National Practitioner Data Bank.
    Question. How do you intend to follow up on problems identified in 
these QMRs?
    Answer. Problems identified in the QMR are followed up with the 
Services three to six months after it's published to find out what 
actions the Services have taken to address the problems.
    Question. Is there a tendency at lower levels to ignore the results 
of these reports? What incentives are there for facility commanders to 
correct deficiencies or weaknesses in the system?
    Answer. The MTF commanders should be aware of the problems that 
exist at their level. The report puts the results in a more aggregate 
DoD perspective for them. The incentive for facility commanders to 
correct deficiencies or weaknesses in the system is based on 
accountability. Results of JCAHO survey are reported from the MTFs to 
their Surgeons General Office for review and monitoring. Health Affairs 
also receives reports from the JCAHO annually to monitor the summary 
grid score average for DoD and how compliant MTFs are with grid 
elements. This data is also shared with the Services. Commanders whose 
JCAHO survey results are poor will come under the scrutiny of their 
Surgeons General Office.

                         Centers of Excellence

    Question. The Dayton Daily News series identified several cases 
where mistakes were made because of a lack of experience--particularly 
with complicated procedures. (For example, Dr. John Owen Colonna, was a 
trainee at Walter Reed when he mistakenly severed a patient's vein 
during gallbladder surgery and the patient died. This was only the 
second time Dr. Colonna had performed the operation on a human being.)
    DOD intends to limit the number of complex procedures being done at 
small hospitals--where doctors cannot remain proficient in certain 
areas. Complex procedures will be done at Centers of Excellence where 
providers will have sufficient workloads to maintain competency.
    A significant number of malpractice cases involve more complex 
medical procedures. What are you doing to alleviate the risk associated 
with complicated medical procedures? Will you explain the concept of 
Centers of Excellence?
    Answer. Centers of Excellence are academic medical centers 
designated to perform complex procedures based on evaluation of their 
past performance and quality indicators, case volumes, and 
certification as a residency training facility. These facilities and 
those designated as Specialized Treatment Services facilities are the 
ONLY facilities permitted to perform procedures delineated in the 
January 24, 1997 HA policy Memorandum restricting the provision of care 
for specific complex DRGs. Among the procedures restricted by the 
January 24, 1997 memorandum are open heart surgery, neurosurgical 
procedures, total joint replacements, radical head and neck resections, 
major ovarian cancer operations, solid organ transplantation, and major 
abdominal surgical procedures. Centers of Excellence and STSs will 
concentrate the case volumes at a small number of facilities insuring 
larger case volumes at teaching facilities where the rigors of academic 
medicine promote practice at the highest intellectual and technical 
level. These facilities will be staffed to assure adequate training and 
supervision while providing valuable readiness training for all 
involved practitioners.
    Question. How may Centers of Excellence will be established? In 
what specialties?
    Answer. The total number of Centers of Excellence has not been 
determined, however, there are 9 established STSs and there will 
probably be only an additional 6-8 Centers of Excellence. The major 
difference between an STS and a Center of Excellence is the catchment 
area, STSs serve a 200 mile catchment area, Centers of Excellence have 
Non-Availability authority for only a 40 mile catchment area although 
they may take referrals from further away on a space available basis.
    The DRGs involved in Centers of Excellence designation are the same 
as for STS excepting solid organ and bone marrow transplantation, and 
major burns.
    Question. Will you maintain all specialties in-house or will you 
purchase certain capabilities from civilian providers?
    Answer. The DoD's primary medical mission is to maintain a medical 
force prepared for war. To that end we will maintain all specialties in 
house for which there is a wartime requirement. That requirement has 
been defined and redefined by the 733 study and update. We are 
currently analyzing our military medical manning to determine how best 
to train and maintain the force dictated by that study and will use 
those parameters to size our training programs and academic healthcare 
facilities. Clearly some capabilities will be available in only one or 
two locations and will be purchased from civilian providers in all 
other locales.

                       Implementation of TRICARE

    Question. Beginning this spring, TRICARE will be in effect in all 
regions of the country. Enrollees will be assigned to a Primary Care 
Manager (PCM) or a team of primary care managers. This should solve or 
improve issues of access, cost, continuity of care and portability of 
the TRICARE benefit.
    How will full implementation of TRICARE help solve the issue of 
access? What are the access standards under TRICARE?
    Answer. The full implementation of TRICARE will help solve the 
issue of access through availability of a network of civilian providers 
who augment the providers assigned to military treatment facilities 
(MTF). Establishment of the TRICARE Prime benefit offers guaranteed 
access to Prime enrollees within specific contractually mandated 
standards. These access standards apply to all enrollees, whether their 
Primary Care Manager (PCM) is assigned to the MTF or is a member of the 
civilian provider network.
    TRICARE Prime enrollees must have access to Primary Care Manager 
(PCM) services on a same-day basis. Access shall be available, by 
telephone or appointment, 24 hours per day, seven days per week. The 
wait time for an appointment for a well visit shall not exceed four 
weeks. The wait time for routine visits shall not exceed one week, and 
the wait time for acute illness shall not exceed one day. Beneficiary 
travel time shall not exceed 30 minutes from home to the site of care.
    TRICARE Prime enrollee travel time to speciality care shall not 
exceed one hour from home to the site of care (except for specialized 
treatment services (STS)). In the case of STS, beneficiaries must be 
informed of the requirements to use them prior to enrollment. The PCM 
making the referral will determine the appropriate waiting time for 
specialty care appointments. In no case, however, should appointment 
waiting time exceed four weeks.
    Question. How will the full implementation of TRICARE enhance the 
continuity of care (i.e., enabling a provider or team of providers to 
care for a patient over time)?
    Answer. TRICARE was designed to enhance continuity of care, 
especially for TRICARE Prime enrollees. It is based on a family 
practice/primary care model which permits a provider or team of 
providers to establish a long-term relationship with an individual, 
monitor that individual's health status over time, promote healthy 
lifestyles and wellness activities, as well as proactively address 
ongoing health concerns.
    Question. How will the full implementation of TRICARE help service 
members when they are required to make a permanent change of station? 
Will portability be an issue?
    Answer. Full implementation of TRICARE will improve service to 
active duty families when they are required to make a permanent change 
of station move. With the implementation of enrollment portability, we 
believe we took a major step in meeting the health needs of our 
families by permitting the active duty family members to remain 
enrolled while they are in transit. They retain a primary care manager, 
health care finder, information phone number, and TRICARE Prime cost 
shares from the time they leave their old duty station until they 
arrive at their new duty station and can be enrolled to a new PCM.
    Question. How will the full implementation of TRICARE help 
beneficiaries in getting information and assistance with their care?
    Answer. Each Managed Care Support contractor has established a 
nationwide toll-free telephone number that beneficiaries may call to 
obtain information and assistance. These toll free numbers are staffed 
around the clock, seven days per week. TRICARE Prime enrollees are 
issued a TRICARE Prime identification card that has the toll free 
telephone number printed on it. In addition, a toll-free Health Care 
Information Line is available to provide information on a broad variety 
of health related topics.
    Question. How will the full implementation of TRICARE improve 
quality of care?
    Answer. TRICARE will improve the quality of care our beneficiaries 
receive on several levels. First, providers must meet high credentials 
standards to be included in our networks. Our contractors must verify 
provider credentials before beneficiaries may be referred to them for 
care. Lead Agents can, and do, perform random provider credentials 
verification. Second, providers agree to participate in ongoing quality 
assurance programs in order to remain in our networks. Providers are 
also subject to monitoring by an independent national Quality 
Monitoring Contractor. Third, TRICARE Prime enrollees benefit from 
enhanced continuity of care, which permits a provider or team of 
providers to establish a long-term relationship with an individual, 
monitor that individuals' health status over time, promote healthy 
lifestyles and wellness activities, as well as proactively address 
ongoing health concerns.
    Question. What are your customer surveys saying about TRICARE? Do 
the beneficiaries believe that they are getting better service, care, 
and access?
    Answer. The Annual Beneficiary Survey is sent to all eligible 
beneficiaries each year. Early indications from the Annual survey show 
improvements in satisfaction with access to appointments, access to 
resources, and overall satisfaction. We also conduct a monthly 
Outpatient Customer Satisfaction Survey which is sent to individuals 
who visited a Military Treatment Facility (MTF). The monthly MTF survey 
is fairly new and it is too early to identify trends. The results 
received so far, however, are positive. They suggest that DoD's 
patients are at least as satisfied with care and access as patients 
enrolled in civilian HMOs. As directed by Congress, an independent 
study of this is underway and will be reported as soon as available.
    Question. Is the cost of TRICARE still at issue?
    Answer. The Department believes TRICARE is the most effective means 
of providing healthcare.

         Phase Out of General Medical Officer (GMO) Accessions

    Question. Over the next 3-4 years, DoD plans to phase out the use 
of General Medical Officers (recent medical school graduates with only 
one year of training). Historically DoD has used GMOs to fill the 
requirements of outpatient clinics and in branch clinics serving line 
units. The Navy, for example, uses GMOs extensively on ship. Fully 
trained physicians (medical school graduates with at least three years 
of post graduate training) will now be used to fill these billets. This 
is important because GMOs are often responsible for poor outcomes due 
to a lack of experience.
    To what extent have General Medical Officers (GMOs) been used to 
fill requirements in the past?
    Navy Answer. Currently, General Medical Officers (GMOs) with one 
year postgraduate training represent 19.9 percent of the Navy medical 
corps. Historically, the GMO percentage has ranged from 17 percent to 
20 percent. These GMOs fill 471 fleet marine and ship positions, 230 
flight surgery positions, and 60 undersea medicine positions.
    Question: What difficulties and problems have you had with respect 
to GMOs and adverse actions? Are they responsible for more malpractice 
cases than fully trained doctors?
    Navy Answer. This data is not routinely tracked in a manner that 
distinguishes between GMOs and specialty trained doctors regarding 
number of problems, adverse actions, and malpractice cases.
    Question. How do you plan to change the use of GMOs?
    Navy Answer. GMOs in isolated duty sites will be given priority for 
replacement by residency-trained primary care specialists as the GMOs 
rotate to graduate medical education or leave the Navy. The replacement 
of these GMOs has been directed to take place over four years. To 
accomplish this goal additional assets are required, including funding 
of the new Loan Repayment Program (LRP) and an increase in the number 
of Financial Assistance Program scholarships. These instruments will 
help to provide the Navy with fully trained physicians to serve in 
operational billets, training, comparable to their civilian 
counterparts. There will still be a few supervised GMO positions for 
individuals with only one-year postgraduate training. These positions 
will be used for medical corps members currently serving as GMOs and 
who wish to continue in that capacity and for individuals that leave 
residency training before completing the training program, but who 
still have obligated service time.
    What difficulties will this cause for the Services?
    Army Answer. Facts of Interest. GMOs have yet to complete residency 
training. They are roughly divisible into two broad groups: Those with 
short term obligation (2-4 yrs, mostly HPSP and ROTC) and those with 
long term obligation (4-11 yrs, mostly USUHS or combinations of 
obligations).
    Physicians who drop out of residency training after their 
internship, physicians who choose to forego residency training in favor 
of paying back their existing obligation, and unsuccessful intern 
applicants for residency training are the contributing factors 
increasing the number of GMOs.
    Accepting GMOs for residency training and separation of GMOs when 
payback of their obligation is complete are the primary mechanisms to 
reduce GMO numbers. Competition for residency training positions is 
very keen. Very qualified applicants are not always successful on their 
first try for residency.
    In the last few years, medical education has changed to specialty 
focused training requiring at least 3 years post graduate training 
(e.g., Family Practice). The Army does not make direct accessions of 
general medical officers. There will be increased costs subsidizing GME 
from 4-5 years to 6-7 years. More training programs for Primary Care 
Providers are needed.
    Summary. We need appropriate management of the ongoing pool of GMOs 
in the present system (residency drop-outs, physicians not wanting a 
residency, and unaccepted residency applicants). We need an increase in 
Primary Care residency training positions to replace the manpower 
shortage that is created. GME costs will increase. Recruitment will be 
more difficult. Remote areas will have fully trained/board eligible 
physicians.
    Navy Answer. The Navy has a greater percentage of GMOs than the 
other services; so more difficulties are expected as we replace 19.9 
percent of our Medical Corps. Some difficulties anticipated are:
     Rank Inversion: The initial replacement specialists will 
be a more senior rank than the current GMO.
     Increased Cost: GMOs are not entitled to specialty bonus 
pay. The replacement specialists will be entitled to more pay due both 
to rank and specialty bonuses.
     Recruiting: The replacement program will depend on the 
recruitment of a significant number of new civilian-trained 
specialists. Historically, recruiting utilizing Financial Assistant 
Programs (FAPs) has been adequate but there is no data to predict the 
performance of the Loan Repayment Program (LRP) as a new recruiting 
tool.
     Excess Endstrength: As new physicians are recruited while 
current GMOs still have a service obligation, temporary endstrength 
excess is projected. The degree of excess can be mitigated by phased 
and prioritized replacement of GMOs.
     Training: Graduate Medical Education will require 
infrastructure modification, while still complying with Residency 
Review Committee accreditation requirements, to accommodate the maximum 
number of trainees. Consideration will need to be given to greater use 
of full time out service training (FTOS) and fully deferred training 
positions; the latter will assist in reducing the endstrength excess. 
Provisions will be needed for military and medical indoctrination of 
the newly acquired civilian-trained physicians before they enter the 
fleet. Additionally, refresher training will be needed for providers 
returning from duty assignments where they have not had the opportunity 
to practice a broad range of care delivery in their specialty.
    Air Force Answer. Of the three Services, the Air Force has the 
highest proportion (86 percent) of physicians that are residency-
trained, and we're taking steps to further increase that proportion. 
Air Force discontinued recruiting General Medical Officers (GMOs) in 
FY97. However, we continue to access approximately 70 training-
obligated Health Professions Scholarship Program (HPSP) or Uniformed 
Services University of the Health Sciences (USUHS) GMOs per year 
because they fail to match, don't desire or resign from residency 
training. With respect to these training-obligated GMOs only, we do not 
concur that their practice is problematic. In our experience, HPSP and 
USUHS physicians are well qualified and highly successful in serving an 
initial tour as a GMO. This group is too valuable an asset in meeting 
our operational requirements for us to either waive or recoup training 
costs.
    We do intend to phase out career GMOs. A revised HPSP scholarship 
contract specifying a requirement for full residency training is being 
developed for implementation in FY99, with phase-in to be complete in 
FY03. Decisions to require recoupment or alternative service should be 
made on the basis of Service staffing requirements and the individual's 
circumstances. Additionally, beginning with Specified Period of Time 
Contracts and Career Reserve appointments executed in FY00, GMOs will 
not be extended beyond their initial training obligation except to 
enter residency training. Since even with recoupment, funds are not 
returned to our O&M account, we've projected a requirement of $880,000 
for HPSP/FAP scholarships and loan repayment grants to offset losses 
due to this change.
    The Air Force has already ensured that GMOs are not permanently 
assigned to bases without a colocated residency trained physician. 
However, GMOs frequently deploy in small units as the leader of a 
Squadron Medical Element. GMOs constitute nearly 30 percent of our 
force of Flight Surgeons, the physician specialty with the highest 
operational deployment tempo. This career field is understrength 
approximately 100 officers, and that situation will worsen by FY99. 
Thus, Air Force will definitely be unable to comply with any directive 
making GMOs nondeployable after 1999. By policy, we compel officers who 
fail to match, don't desire or resign from a residency program to enter 
the workforce as GMOs--approximately half are physically and clinically 
qualified and opt to serve as Flight Surgeons. We are and will continue 
to be heavily dependent on that source of physicians to support both 
peacetime and contingency operations. This source could be replaced 
with 70 four-year HPSP/FAP scholarships or loan repayment grants 
($6.16M per year) in FY04 in funding starts in FY99, however, we 
believe that the elimination of training-obligated GMOs is not in the 
best interest of the Service or our patients. In a general sense, we 
are concerned this could be used as a loophole to avoid federal 
service.

       Evaluate Military Health Services System (MHSS) Weaknesses

    Question. DOD feels that it can and must do a better job to 
evaluate the MHSS and correct weaknesses. One tool that will be used to 
help identify and evaluate the system is the Quality Management Report. 
How do you intend to improve DoD's methods of evaluating the Military 
Health Services System? What tools will help you evaluate the 
performance of the system? Are there new tools which you will use?
    Answer. DoD intends to improve its methods to evaluate the Military 
Health Services System (MHSS) using many tools. The newly instituted 
Risk Management Committee will monitor malpractice and adverse actions 
quarterly to keep a pulse on the number of malpractice payments, the 
number of reports submitted to the National Practitioner Data Bank 
(NPDB), timeliness of reports, any backlogs, and any problems reporting 
to the NPDB.
    The new External Peer Review Agency will review malpractice cases 
where a payment was made and the Surgeons General determination was 
standard of care met or a system problem.
    Quality Management Reviews from the Special Studies will continue 
to discover and provide detailed information on ``best practices in the 
MHSS'' and be distributed to the field in hard copy and a summary 
report on the Web.
    The Annual DoD Quality Management Report will be reestablished.
    The MHSS Performance Report Card will be used to continue to 
improve military treatment facility (MTF) commander's performance by 
monitoring indicators such as JCAHO accreditation/scores, medical 
readiness, and risk management.
    Question. How do you intend to follow up on issues and correct 
weaknesses in the system?
    Answer. DoD intends to follow up on issues and correct weaknesses 
in the system through use of the committees and mechanisms listed in 
question 126 and 127 which provide lines of communication between the 
Services and DoD for action.
    Question. It seems that DoD is reasonably proficient at identifying 
problems in the system. However, DoD seems less successful in 
correcting problems. What tools would help you to enforce corrective 
decisions and demand accountability in the system?
    Answer. The new Risk Management Committee, the new External Peer 
Review Agency mechanism, the MHSS Performance Report Card, and the 
Healthcare Consumer Committees will provide oversight to allow 
accountability and enforcement of corrective action.

           Strengthen the National Quality Management Program

    Question. Another way DoD hopes to improve quality is to cooperate 
with civilian health organizations and other government providers to 
determine the ``best clinical practices''. Under the National Quality 
Management Program, the best techniques and procedures (``best clinical 
practices'') are identified and guidelines are developed to help 
physicians enhance their skill and improve care.
    How do you plan to use quality management programs to identify 
``the best clinical practices'' and help physicians improve their 
skills?
    Answer. Each QMR portrays MHS performance in a specific product 
line (e.g., birth, cardiovascular, etc). The product line studies 
examine the processes of care across the MHS and the outcomes generated 
from these processes. Outcomes are measures of: the clinical outcome; 
the patient's functional status; patient satisfaction and cost. Best 
clinical practices are defined as the best outcomes achieved with the 
most effective use of resources. The medical treatment facilities 
(MTFs) with the best clinical practices for that product line (top 5%) 
are designated as ``best clinical practice MTFs''. The QMR compares the 
performance of each MTF to the performance of all other MTFs (and 
civilian facilities within that region); the DoD average performance; 
the Service average performance, and the performance of the best 
practice MTFs. Providers in one facility are encouraged to compare 
their processes of care to those in facilities having better outcomes. 
Providers can then contact those facilities to compare patient 
management practices, and use information they obtain to improve their 
practices and processes.
    Question. Once these best clinical practices have been identified, 
how do you make sure that hospital commanders and providers are 
following these procedures?
    Answer. Product line studies are published annually in the Quality 
Management Reviews and distributed to each Service, TRICARE Region and 
MTF. The facility commanders, and quality improvement coordinators get 
the information to the physician serving as the product line clinical 
service chief who in turn shares the information with his/her staff. 
We've found that getting the information down to the clinical service 
chief and staff physician level and also getting them to use the 
information was problematic in some facilities. The bedside/clinic 
physicians were either not receiving the information or, when they 
received it, they had difficulty interpreting the study findings and 
applying the information to their practice. Several initiatives begun 
during the past year have improved this situation: (1) DoD stepped up 
its physician education efforts through the combined efforts of DoD 
clinical staff, USUHS faculty and the National Quality Management 
contractor. Information on the NQMP studies have been presented at DoD 
TRICARE conferences, the TRICARE Quality Council, Regional TRICARE 
conferences, as a part of the Medical Executive Training Program and at 
facilities upon invitation from the MTF. In FY 1999 we hope to expand 
our physician education efforts by providing courses on using clinical 
performance outcomes data in the physician's practice. (see questions 
14 and 64); (2) We have linked the Joint Commission Accreditation 
requirement, ORYX, to the NQMP studies. (the DoD National Quality 
Management Contractor is also a Joint Commission approved ORYX 
Performance Measurement System vendor and the work done for the NQMP 
studies is also being used to meet the ORYX accreditation requirement) 
This has greatly increased the exposure of the NQMP studies and 
heightened interest from facility providers. (Both the NQMP studies and 
the ORYX initiative examine the patient outcomes generated as a result 
of the processes engaged to provide medical care. Under the ORYX 
program the procedures used to generate annual NQMP studies will also 
provide the facilities with quarterly feedback about their processes of 
care and the resulting outcomes. These outcomes are also submitted to 
the Joint Commission under the requirements of the ORYX program; (3) 
We've established several Joint-Service committees to direct the ORYX/
NQMP study programs, giving the Services & MTFs more ownership of the 
process and thus more ``buy-in'' into the process in return.
    Question. What teaching and training mechanisms, if any, do you 
have in place to encourage doctors to use best clinical practices?
    Answer. The MHS has several teaching/training mechanisms currently 
in place to encourage doctors to use best clinical practices: (1) The 
information is disseminated to each facility via the publication of the 
``Quality Management Review'' (QMR); (2) QMR findings are discussed at 
medical department and clinic level meetings within the facility; (3) 
Discussions of best clinical practices and the QMRs are often presented 
during regional TRICARE conferences and at the national TRICARE 
conference; (4) Each facility can contact FMAS, the external contractor 
performing the product line studies, for assistance in understanding 
the study report findings and their implications for physician 
practice; and (5) Educational sessions via VTC with the staff from 
USUHS.

                               Automation

    Question. DOD has been criticized often for its antiquated patient 
record keeping system which has led to improper or adverse care. 
However, DOD recognizes the problem and has budgeted nearly $275 
million for information systems management in Fiscal Year 1999. 
Advancements in Computerized Patient Record (CPR) keeping and data 
collection are key aspects of understanding a patient's needs and 
improving their care. The ability to send x-rays or other images via 
computer has also improved readiness. How much funding is in the budget 
to improve automation of patient records?
    Answer. There is $94 million in FY 1999 for Development and 
Deployment in the Composite Health Care System program to improve 
automation of patient records.
    Question. How much funding is in the budget to improve automation 
and enhance administrative functions for hospitals and clinics?
    Answer. There is $91.217 million in FY 1999 for three major 
programs to improve automation and enhance administration functions for 
hospitals and clinics.
    The Corporate Executive Information System has $36.0 million for 
delivering analytical decision support and executive information tools. 
This includes data warehousing, comparing and benchmarking between 
facilities, and conducting extensive research on at risk populations.
    The Health Standard Resources System has $6.716 million for Expense 
Assignment System IV deployments and $20.701 million for Defense 
Medical Human Resources System deployments. These include tools 
supporting medical personnel functions, labor costing, education and 
training, and readiness deployability tracking.
    The Tri-Service Infrastructure Management Program Office has $22.4 
million for Local Area Network upgrades and $5.4 million for system 
drops within facilities. This provides a standard, unified backbone 
capable of delivering connectivity to required users' desktops. It 
establishes LANs in medical facilities to support web-based 
applications and migrates facility networks from local-only systems to 
systems capable of handling standard Internet protocols.
    Question. How much funding is in the budget for telemedicine 
initiatives?
    Answer. The FY 1999 budget contains $1.4 million for telemedicine.
    Question. How will advanced communication and computer 
infrastructure improve readiness?
    Answer. The MHS must maintain a high state of medical readiness to 
support joint operations in a dynamic global environment. Requisite to 
providing health support is the ability to capture, maintain, and 
provide comprehensive, relevant, and accurate patient-centered 
information to support delivery of health service to the right person, 
at any time and at any location over the patient's lifetime. 
Telemedicine will be one of the key enablers. Our objectives include:
           Keep active duty forces on the job;
           Enhance and measure the health and fitness of the 
        fighting force;
           Reduce the forward-deployed medical footprint to 
        support lightning strike operations;
           Modify the MHS staffing model.
    As a direct result of the President's directive to create a new 
Force Health Protection Plan, Public Law 105-85 established the 
requirement for an improved medical tracking system for service members 
deployed overseas in contingency or combat operations. In response to 
this directive, a Personal Information Carrier (PIC) was identified. 
Successful implementation and utilization of the PIC will depend on the 
availability of an advanced communication and computer infrastructure 
worldwide.
    Advanced communications and computer infrastructure will enable 
medical units to improve force health protection by automated 
monitoring of the health risks of our deployed service members. In 
addition, when the Global Combat Support System becomes operational and 
available to medical units, they will have the capability to 
communicate with command and medical echelons vertically within their 
Service and horizontally across all Services.

                Uniformed Services Treatment Facilities

    Question. There are 10 Uniformed Services Treatment Facilities 
(USTFs), former public hospitals, that have agreed to provide health 
services on behalf of the Department of Defense. The budget provides 
for $380 million in spending for USTFs in 1999. This is a 4% increase 
over 1998 spending for USTFs. In general, DoD has not encouraged USTF 
enrollment to grow significantly because of two factors, both related 
to the high cost of USTFs.
    The first issue relates to ``unnecessary'' costs to the government 
that are incurred when a USTF member goes outside the USTF for care. 
(Service members who are enrolled with a USTF agree not to use other 
government health care services such as Medicare, CHAMPUS and MTFs. If 
they do, the government incurs additional and unnecessary costs. GAO 
estimated that unnecessary costs to the government could be as high as 
$38 million.
    The second issue relates to the higher per capita cost incurred 
when USTFs are used as opposed to CHAMPUS, TRICARE or Medicare. (For 
example, DoD estimates that the government will pay $6.5 million more 
for beneficiaries under 65 and $8 million more for Medicare-eligible 
beneficiaries who are enrolled in a USTF).
    Despite these factors, USTFs continue to press for additional 
annual enrollment allocations from DoD. This is primarily due to the 
fact that DoD contracts are not competitive and that DoD pays them a 
higher per capita rate than other plans do.
    The Department has had some trouble integrating USTFs into its 
system of TRICARE providers. How has this relationship changed with the 
advent of TRICARE?
    Answer. The Department and the USTFs worked jointly to develop 
Guiding Principles as a framework for the new contracts and supported 
the legislative language reflected in the statute. The Department 
developed a request for proposal (RFP) that incorporates the Guiding 
Principles, the statutory requirements, and many additional 
recommendations subsequently made by the USTFs. All the USTFs have 
entered into new contracts with the Department. The new contracts will 
enable enrolled beneficiaries to continue their current relationship 
with the USTFs and will more closely integrate the USTFs into TRICARE, 
offering a standard national benefit to all of our beneficiaries.
    The start of health care services for the designated providers' 
(formerly called USTFs) implementation of TRICARE Prime is as follows:
    Sisters of Charity of the Incarnate Word, Houston, TX, April 1, 
1998.
    Pacific Medical Clinics, Seattle, WA, April 1, 1998.
    Fairview Health System, Cleveland, OH, May 1, 1998.
    Johns Hopkins Medical Services Corporation, Baltimore, MD, June 1, 
1998.
    Martin's Point Health Care, Portland, ME, June 1, 1998.
    Brighton Marine Health Center, Boston, MA, June 1, 1998.
    Bayley Seton Hospital, Staten Island, NY, August 1, 1998.
    Question. Do USTFs abide by the same guidelines and rules as other 
TRICARE providers? What are the similarities? What are the differences?
    Answer. Although a single request for proposal was issued, each 
designated provider had the opportunity to negotiate different terms 
and conditions according to commercial items acquisition guidelines. 
Therefore each designated provider contract is different from the 
managed care support contracts and from other designated provider 
contracts.
    The designated providers' contracts all contain the same TRICARE 
Prime benefit and cost share structure, TRICARE Prime access standards, 
portability from one TRICARE Prime contractor to another, TRICARE Prime 
appeals and grievance procedures, and TRICARE Prime quality of care 
review requirements.
    The most visible difference is that the designated providers 
provide care to Medicare eligible beneficiaries electing to enroll, 
while other TRICARE contractors cannot. The designated providers are 
paid on a per member per month capitation, while the TRICARE managed 
care support contractors are paid a fixed price per year with a bid 
price adjustment. The MCS contractor is responsible for all CHAMPUS 
eligible beneficiaries in the MCS region while the designated provider 
is only responsible for beneficiaries that are enrolled in the USFHP. 
As a result, retirees and their dependents can enroll and disenroll in 
the designated provider program once per year during an open season, 
while the MCS contractors continually enroll members. Although these 
terms and conditions are the major differences in the programs, there 
are other minor differences in administrative terms and conditions as 
negotiated by each designated provider that do not affect the overall 
TRICARE program.
    Question. Is there a difference in cost per beneficiary? Are USTFs 
more expensive to the government?
    Answer. The USTF capitation rates reached under the new USTF 
designated provider contracts are markedly more cost effective for DoD 
than the rates in the previous agreements. However, for a variety of 
reasons, the capitation rates are still significantly higher than the 
amounts the government would have paid for these beneficiaries under 
the Managed Care Support (MCS) contracts or that Medicare would have 
paid under its managed care (risk HMO) program.
    First, as required under Section 726 of the FY 1997 Defense 
Authorization Act, DoD is required to pay each USTF an amount that 
reflects a blend of fee-for-service costs and managed care costs. 
Specifically, for the under age 65 beneficiaries, DoD's calculation of 
the USTF capitation rates blends the historical costs of Standard 
CHAMPUS with the historical costs of Managed Care Support contracts. 
Including the Standard CHAMPUS costs increases DoD's costs because the 
Standard CHAMPUS costs are higher than the MCS contract costs. 
Similarly, for Medicare beneficiaries, DoD's calculations of the USTF 
capitation rates blend the costs of beneficiaries in Medicare's fee-
for-service program with the costs in Medicare's managed care program 
(the Medicare risk HMO program). Again, because the costs in the fee-
for-service program are higher, this raises DoD's cost of providing 
benefits to Medicare beneficiaries in USTFs above what a Medicare risk 
HMO would have been paid. In short, DoD is paying more for the USTF 
managed care program than it would pay its MCS contractors or Medicare 
would pay a Medicare risk HMO because of the blending of fee-for-
service and managed care costs required under Section 726.
    Second, the USTF rates for Medicare beneficiaries exceed the costs 
Medicare would pay because DoD pays the USTFs an additional amount to 
provide outpatient prescription drugs for USTF Medicare beneficiaries. 
In addition, DoD is able to purchase drugs at very low prices (``DAPA'' 
prices). Because the USTFs are unable to purchase all of their drugs at 
DAPA prices, DoD is able to purchase drugs more cheaply than the USTFs. 
Thus, DoD must pay the USTF more for some drugs than it would have to 
pay for those drugs if they were purchased at an MTF. DoD also pays 
more at some USTFs than Medicare because DoD bases part of the 
capitation payment on Medicare's AAPCC level for the county of the USTF 
facility rather than on the AAPCC in the county of residence, which 
Medicare uses. Because the county of residence AAPCC is lower than the 
county of facility AAPCC at these USTFs, this means that DoD pays more 
than Medicare would.
    As a consequence of all these factors, the government pays the 
USTFs more for health care services than it pays the MCS contractors or 
Medicare risk HMOs. DoD estimates that it will pay an additional $6.6 
million for persons under age 65 and the government will pay an 
additional $15.2 million for persons age 65 and over during the first 
option period of each of the USTF contracts (generally May 1, 1998-
April 30, 1999). DoD will pay an additional $193 million for persons 
age 65 and over during the first option period of the USTF contracts. 
If the USTF programs did not exist, Medicare would pay the health care 
costs of these beneficiaries, not DoD. Thus, the additional amounts 
that DoD would pay are equal to the total capitation payment paid by 
DoD.
    Question. Some USTFs believe they should be able to enroll as many 
military beneficiaries as possible. What is your view?
    Answer. The Department must operate all programs within 
constraints, including the designated provider program. One of those 
constraints is the availability of funding. The Department is allowing 
each designated provider to market and enroll all current enrollees and 
all other eligible beneficiaries electing to enroll in the designated 
provider program. Although we are allowing market conditions to dictate 
enrollment, we also require the designated provider to obtain approval 
of the applicants prior to enrollment as a safety measure to ensure 
there is funding available for all applicants and current members. The 
Department believes that the contract and market conditions provide 
sufficient controls on enrollment, but believes the statutory 
limitation of 10 percent growth per year is necessary to ensure that 
the Department is not placed in an anti-deficiency situation as 
occurred with open enrollment in October 1996. The statutory limitation 
could allow for a potential growth of 50 percent over the five-year 
life of the designated provider contracts.
    Question. Some USTFs believe they should have a specific 
appropriation. What is your view? Should USTFs be guaranteed a certain 
amount of funding? If now, why not?
    Answer. The designated providers have each signed new contracts to 
provide the TRICARE Prime benefit and compete with the managed care 
support contractors and the military treatment facilities for a share 
of the beneficiary population in those geographic areas serviced by the 
designated providers. It is the Department's position that the Defense 
Health Program Budget (without a separate line items for USTFs) is the 
appropriate vehicle to fund the TRICARE program. As the market share of 
the MTFs, the MCS contractors, and the designated providers change, 
funding resources can be applied as needed to ensure the beneficiaries 
receive quality care under the TRICARE program.
    The original intent in creating the USTFs was to provide them the 
opportunity to compete as private entities in the health care market 
place. The Department has entered into contracts, not to exceed 60 
months, with each designated provider allowing them the opportunity to 
openly market and enroll beneficiaries under the TRICARE program. 
Enrollment with those designated providers that have completed the 
process has resulted in a decrease in enrollment for some designated 
providers and an increase in enrollment for others. To guarantee 
specific funding for the designated providers would remove the ability 
of the Department to manage the Defense Health Program and allocate 
resources where they are most effective for the beneficiary population. 
It is the Department's intent to allow the designated providers to 
compete with other contractors and it is our intent to allocate the DHP 
budget allowing beneficiary choice. The designated providers will be 
funded for all beneficiaries electing to enroll in their program, 
within the limitations agreed to in the contracts.
    Question. What is your current estimate regarding the amount of 
double billing that is going on? Will that continue with the 
implementation of TRICARE? How can these costs be avoided?
    Answer. The Department matched Defense Enrollment Eligibility 
Reporting System (DEERS) records on enrollment in the USTF program 
against the Medicare files for the period of October 1, 1993 through 
December 31, 1995. The results indicate that Medicare paid $30.7 
million in care for enrollees of the USTF, while DoD was paying a 
capitation to the USTF for the enrollee's comprehensive care. The 
Department and the USTFs are in the process of analyzing the data match 
to determine which Medicare billings were authorized and which Medicare 
billings for care were inappropriate.
    The Department has placed provisions in the designated provider 
contracts to manage the Medicare leakage within their networks, but 
this will not stop leakage by enrollees who go out of network to a 
Medicare provider for their care. We do expect the leakage to be 
reduced as a result of the contract provision. To completely stop the 
Medicare leakage problem, the Health Care Financing Administration 
(HCFA) would need to flag the Medicare file to ensure that care 
provided designated provider enrollees and billed to Medicare is 
appropriate prior to the release of payment by HCFA.

                Sierra Health Services Tricare Contract

    Question. There has been some concern about the recent award of a 
$1.3 billion contract to Sierra Health Services, a Nevada based 
company. Concern stems from two matters that have received attention 
since the contract award.
    First, according to an article published in the Las Vegas Review 
Journal, the CEO of Sierra Health Services (SHS), Dr. Anthony Marlon, 
was convicted of fraud in connection with a contract to provide 
healthcare coverage to federal employees under the Federal Employees 
Health Benefit Plan (FEHBP).
    Second, after the award for Region 1 was announced, Dr. Marlon was 
quoted in the Las Vegas Review Journal stating that: ``One of the 
reasons we [submitted a bid], quite frankly is we have no business on 
the East Coast . . . the government will fund our expansion. . . .''
    He went on to say: ``If it costs more to treat the CHAMPUS 
beneficiaries than is anticipated, the government will pick up 80 
percent of the cost overrun.''
    There has been some concern about the fact that DoD awarded a $1.3 
billion dollar contract to Sierra Health Services, a company whose CEO 
has, according to an article in the Las Vegas Review Board, been 
convicted of fraud in connection with another federal contract. Is this 
true? If true, is this consistent with Administration efforts to crack 
down on Healthcare and Medicare fraud? Why should DoD award a $1.3 
billion contract to a company that has been convicted of defrauding the 
federal government?
    Answer. In September of 1997, DoD awarded the TRICARE Managed Care 
Support contract for Region 1 (11 northeastern states, the District of 
Columbia, and portions of Virginia/West Virginia) to Sierra Military 
Health Services, Inc. (Sierra Military). Dr. Anthony Marlon serves as 
the Chairman of Sierra Military's Board of Directors, and has been the 
CEO and Chairman of the Board of the parent company, Sierra Health 
Services, since its inception in June of 1984.
    During 1988, the Office of Personnel Management (OPM) conducted a 
routine audit of Sierra Health Services' Health Maintenance 
Organization (HMO), Health Plan of Nevada, Inc., regarding its contract 
to provide health care coverage to federal employees in Nevada under 
the Federal Employees Health Benefits Program (FEHBP) for contract 
years 1984-1988. The audit included a finding which questioned 
approximately $515,000 of the HMO charges. In addition, a separate 
investigation was conducted by the U.S. Attorney for Las Vegas into 
allegations that false and misleading information had been provided to 
OPM during 1988.
    In February of 1991, the U.S. Attorney's investigation ended with 
an agreement that Dr. Marlon plead guilty to a misdemeanor offense of 
knowingly causing to be provided to OPM a false certificate that the 
HMO was utilizing community rating in setting the rates of the 1988 OPM 
contract. Dr. Marlon was sentenced to 24 months probation and fined 
$25,000. He was also sanctioned by Sierra Health Services and 
relinquished 6 months compensation with the company.
    Sierra Health Services agreed to pay OPM $434,000 in overcharges 
and to provide free medical services having a value of $500,000 to the 
indigent and uninsured population in the Las Vegas area. No other 
criminal charges were filed against Sierra Health Services or its 
employees. Neither Sierra Health Services nor any of its subsidiaries 
has been the subject of contract suspension or debarment proceedings by 
the federal government. In fact, both OPM and the Health Care Financing 
Administration (HCFA) have renewed contracts with Sierra's HMO, Health 
Plan of Nevada, Inc., on a regular basis and it remains one of the 
largest FEHBP insurers in Nevada. Also, effective October 1, 1996, it 
was one of 6 HMOs in the country to be selected by HCFA to operate a 
second generation social HMO program designed to provide enhanced 
health care services to certain Medicare Risk enrollees. Finally, the 
Office of the Inspector General of the Department of Health and Human 
Services determined that the 1991 misdemeanor plea did not preclude the 
State of Nevada from contracting with Sierra's HMO for the Medicaid 
program. Therefore, effective April 1, 1997, it began providing 
services under Nevada's Managed Medicaid Program.
    All of the above information was furnished to DoD and reviewed 
during the evaluation of competitive proposals for award of the TRICARE 
Region 1 contract. In addition, Sierra Health Services has implemented 
a Federal Healthcare Contract Compliance Policies and Procedures Manual 
to ensure contractual, statutory, and regulatory compliance with all 
federal health benefits contracts. It has also adopted a Code of Ethics 
applicable to all company employees that requires compliance with the 
letter and spirit of all laws and regulations designed to ensure 
integrity in contracting with governmental customers at the federal, 
state, and local levels. In view of the totality of the circumstances, 
it was determined that no legal basis existed to exclude Sierra 
Military, a subsidiary of Sierra Health Services, from consideration of 
contract award.
    Question. Dr. Marlon is quoted in the Las Vegas Review Journal as 
saying that he viewed Sierra's TRICARE contract as a means to fund 
``our expansion to the East Coast.'' Does it concern you to hear these 
comments?
    Answer. The comments have to be assessed in context of the 
competitive process under which the TRICARE contract was awarded. 
Because price was a significant factor in distinguishing between 
competitive proposals, DoD was assured of awarding a contract with 
reasonable costs. In fact, Sierra Military Health Services, Inc., 
submitted the lowest evaluated contract price. Obviously, most 
companies achieve benefits in commercial business from economies of 
scale resulting from performing government contracts. The same 
economies of scale, in return, tend to produce lower contract prices 
for the government. Therefore, the cited comments could apply to the 
potential expansion of business for any awardee of a government 
contract.
    Question. Dr. Marlon also stated in that article that the 
government would incur all or most of the risk of a cost overrun. Does 
this disturb you?
    Answer. The government's risk of a cost overrun for the TRICARE 
Region 1 contract is the same as under all other TRICARE Managed Care 
Support contracts. Under the full and open competition process used to 
select the contractor, the proposed health care costs of each competing 
offeror were subjected to a cost-realism analysis to determine the 
ability of the offeror to perform the contract and to project the most 
likely actual health care costs that each offeror would incur under 
pricing assumptions suggested by the offeror and validated by the 
government as reasonable and realistic. Once the reasonableness and 
realism of each offeror's price was determined, the sensitivity of each 
bid price to potential cost overruns and underruns was assessed an 
estimated risk premium. That risk premium, among other factors, was 
added to the offeror's bid to establish the adjusted proposed health 
care price. Therefore, an offeror's price had to be determined to be 
realistic and the contractor had to be determined reasonably capable of 
performing the contract as bid in order to qualify for contract award.
    Because of the high level of financial risk, along with the 
rapidity of change in the health care services environment, the 
government established a tiered risk sharing feature which is common to 
all TRICARE Managed Care Support contracts. Under the contractual 
provisions, the contractor and DoD share in both gains and losses; 
i.e., the difference between the costs proposed by the contractor and 
determined by the government to be reasonable and realistic and the 
actual health care costs experienced under the contract. Any contract 
period resulting in a cost underrun of 20 percent or less will result 
in the government sharing 80 percent of the underrun; any cost underrun 
in excess of 20 percent will result in a government share of 90 
percent. Alternatively, any cost overrun will be covered by the 
contractor's forfeiture of its profit and incurring all losses up to 
101 percent of the contractor's adjusted proposed health care price. 
Any overrun exceeding the 101 percent threshold will be additionally 
shared 20 percent by the contractor until all cumulative gains under 
the contract and all equity committed under the contract have been 
forfeited by the contractor.
    Excluded from the above risk sharing arrangement is any 
``capitated'' costs in a contractor's proposal. In Region 1, Sierra 
proposed a significant amount of health care costs under capitated 
rates. Therefore, any gains or losses resulting from the guaranteed 
capitation portions of the contract are not shared by the government.
    Question. I understand that the Sierra award has been protested. 
What is the nature of the complaint? Is it routine?
    Answer. The TRICARE contract award for Region 1 was protested to 
the General Accounting Office (GAO) by an unsuccessful competitor, 
Foundation Health Federal Services, Inc. Given the significant dollar 
value of the TRICARE contract, protests of contract award are routine 
business practice. On February 12, 1998, GAO issued a decision 
sustaining the protest. The major finding by GAO was that DoD failed to 
adequately disclose the weights of the significant evaluation factors. 
Although additional minor findings were made, such findings were not 
determinative of the outcome. Under GAO procedures, DoD will file a 
request for reconsideration of the protest decision, seeking reversal 
or modification of the decision based on cited factual and legal 
errors. No time period is established for GAO's response to the request 
for reconsideration.

         Regions 2 and 5 TRICARE Contract Award Anthem Alliance

    Question. Anthem Alliance was awarded a $3 billion TRICARE contract 
to provide health care for regions 2 & 5. The contract was protested 
and GAO made a preliminary ruling against Anthem Alliance. A final 
determination has not yet been made.
    Dr. Martin, will you please tell us about the protest? Which 
company protested the award and why? Is there anything unusual about 
this?
    Answer. Award of the TRICARE contract for Regions 2&5 to Anthem 
Alliance for Health, Inc. was protested to the General Accounting 
Office (GAO) by two unsuccessful competitors, Foundation Health Federal 
Services, Inc., and Humana Military Health Services, Inc. Given the 
significant dollar value of the TRICARE contract, protests of contract 
awards are an expected business practice.
    Question. When do you expect GAO to make a final decision on the 
award?
    Answer. On February 4, 1998, GAO issued its decision sustaining the 
protests. The major finding by GAO was that DoD failed to adequately 
disclose the weights of the significant evaluation factors. Although 
additional minor findings were made, such findings were not 
determinative of the outcome. Under GAO procedures, DoD will file a 
request for reconsideration of the protest decision, seeking reversal 
or modification of the decision based on cited factual and legal 
errors. No time period is established for GAO's response to the request 
for reconsideration.
    Question. How long will TRICARE be delayed if the protest is 
upheld?
    Answer. The Department is working to complete nationwide 
implementation of the TRICARE program while being responsive to any 
final GAO decision. Anthem will complete contractual tasks for 
transitioning Regions 2&5 to the TRICARE managed care program as 
originally scheduled. Actual delivery of health care by the contractor 
will commence May 1, 1998. Following receipt of the GAO reconsideration 
decision, DoD will make a reasoned analysis and undertake appropriate 
action regarding any remaining GAO recommendation. While the 
possibility exists that a transition to another contractor may occur 
within 2 years should GAO not act favorably on DoD's request for 
reconsideration, interim contract performance will avoid delaying 
TRICARE implementation in Regions 2&5.

                 TRICARE Contract ``Resource Sharing''

    Question. As a means of maximizing resources, TRICARE contractors 
initially agreed to provide supplemental civilian personnel, equipment 
and supplies to military hospitals and clinics. This concept, called 
resource sharing, was supposed to provide about $700 million in savings 
over 5 years.
    However, because of a lack of clear program policies, neither DOD 
nor its contractors now believe that these savings are possible. This 
means that the original contract bid prices were too low and that DOD 
will need to make upward price adjustments.
    DOD estimated that resource sharing would account for approximately 
$700 million in savings over 5 years. Are these estimates still valid? 
Why is the Department unable to count on these savings?
    Answer. Prior to the award of the MCS contracts for Regions 7 and 8 
in April 1997, DOD estimated that over the five year life of the MCS 
contracts then in operation, resource sharing would result in nearly 
$700 million in cost avoidance. This estimate was based on the 
assumption that resource sharing opportunities of the magnitude 
experienced during California/Hawaii CHAMPUS Recapture Initiative would 
be the norm in future contracts. The MCS contractors also believed this 
to be the case and committed aggressive savings levels, with the 
assumption that resource sharing would be the primary vehicle for the 
Government to recapture CHAMPUS. Cost saving investments for all 
operating TRICARE regions less Regions 7 and 8, currently amount to 
over $82 million annually (which equates to $410 million over five 
years), and resource sharing investments continue to grow. However 
resource sharing remains only one of many tools to recapture CHAMPUS 
costs and MTFs had already taken many managed care steps to recapture 
CHAMPUS costs even before the MCS contracts began. TRICARE continues to 
save money, but through different mechanisms than initially 
anticipated.
    Question. What are some of the problems with resource sharing? What 
is being done to adjust current and future contracts? Will you explain 
alternative financing?
    Answer. Part A--The return on a resource sharing initiative is tied 
to the Bid Price Adjustment (BPA) process within the MCS contracts. 
This is a complicated process that must balance an uncertain level of 
risk associated with current proposals with a long-term payoff. 
Resource sharing agreements also depend on mutual agreement between the 
MTF commander and the contractor. In an effort to gain more confidence 
in the expected results of an agreement, proposals have often been 
over-analyzed and agreements delayed for lack of complete data. In 
Regions 3 and 4, MTFs embraced managed care by trying to recapture 
CHAMPUS costs on their own (mainly through direct contracting efforts) 
without waiting for the MCS contract to begin. In these cases, doing 
the right thing had the unexpected impact of reducing resource sharing 
opportunities for the contractor because MTF CHAMPUS savings 
initiatives preempted what could have otherwise been resource sharing 
savings.
    Part B--DOD is making changes to current and future MCS contracts 
regarding resource sharing. The TRICARE Lead Agents and the contractor 
for Region3/4 have entered into a process to maximize current resource 
sharing opportunities within the region. Part of this process involves 
reviewing individual direct contract initiatives designed to recapture 
CHAMPUS to see if they are appropriate for resource sharing. The MCS 
contracts for Regions 1, 2 and 5 will have far less emphasis on 
resource sharing than earlier contracts. The next generation of MCS 
contracts, MCS 3.0, will have no resource sharing provisions; instead 
there will be a simplified form of resource support whereby MTFs can 
obtain needed manpower through a streamlined task order process that 
does not require detailed analysis or savings goals on the part of the 
contractor.
    Part C--Revised financing (previously referred to as alternative 
financing in its development stage) is an approach to managed care 
contracting that gives MTF Commanders in TRICARE Regions 1, 2 and 5 
more flexibility and responsibility regarding beneficiaries who chose 
to enroll in TRICARE Prime with an MTF Primary Care Manager.
    There are four goals to the MCS revised financing approach:
           Enabling MTFs to manage their own Prime enrollees 
        (i.e., those with military PCMs) without concern for Bid Price 
        Adjustment interactions;
           Providing MTFs with all funding to invest in the 
        care of their Prime enrollees, in return for assuming full risk 
        for these enrollees;
           Maintaining the overall MTF-contractor partnership 
        through a continued sharing of risk for all CHAMPUS eligibles 
        not enrolled with MTF PCMs; and
           Improving the ``real-time'' cost impact of 
        management decisions through more frequent formal bid price 
        adjustments.
    Under revised financing, the MTF will receive funding for those 
CHAMPUS eligibles who enroll in Prime with an MTF PCM, and the MTF will 
have sole financial responsibility for these CHAMPUS eligibles (i.e., 
the MCS contractor will not be at risk for the MTF's enrollees). For 
any civilian care required for the MTF's enrollees, the MTF will pay 
the contractor at the individual network providers' rates (i.e., the 
discounted rates). The contractor will track those claims paid for the 
MTF's enrollees separately from other TRICARE claims, and the MTF will 
reimburse the contractor on a monthly basis.
    The contractor will continue to be at risk for all other CHAMPUS 
eligibles (those who enroll in Prime with civilian PCMs and all 
beneficiaries in Extra and Standard), with bid price adjustments and 
risk sharing provisions applicable only to these non-MTF-enrollees. 
From a budgetary perspective, initially the MTF's budget will include 
O&M, MILPERS, and the portion of TRICARE (CHAMPUS) associated with the 
MTF's Prime enrollees.
    Quarterly bid price adjustments will account for changes in the 
contractor's at-risk population and MTF utilization by that at-risk 
population.
    Question. Will alternative financing provide any savings? If so, 
what are your estimates?
    Answer. The TRICARE MCS contracts are projected to reduce costs in 
Regions 1, 2 and 5. In accordance with Congressional cost certification 
requirements for expansion of DoD's Managed Care Support (MCS) program 
into Regions 1, 2 and 5, DOD analyzed the cost impact of the MCS 
contract on both CHAMPUS costs and direct care costs over the life of 
the contract. This analysis indicated that the Region 1 MCS contract 
will reduce overall MHS costs in the region by approximately $20 
million over the life of the contract, relative to MHS costs in the 
absence of the contract. The same analysis for Region 2/5 indicated 
that the Region 2/5 MCS contract will reduce overall MHS costs in the 
region by approximately $190 million over the life of the contract. 
These revised cost estimates have been incorporated in the POM 
requirements for the TRICARE program.

     Food and Drug Administration Investigation of Navy Blood Bank

    Question. According to the Washington Post, after a three month 
investigation, the Food and Drug Administration (FDA) forced the 
closure of Bethesda's blood bank due to ``sloppy management practices 
and rampant bookkeeping errors that sent suspect blood into the 
military blood supply, including units not thoroughly tested for the 
AIDS virus.''
    Among other things, the FDA reported that two patients receiving 
transfusions received the wrong type of blood last year. The FDA also 
reported that 126 units of blood were left in the blood bank even 
though they had not been fully screened for the AIDs virus. The mistake 
was not noticed for nearly a year, and 33 units of blood remain 
unaccounted for today.
    Admiral Koenig, what happened that caused the closure of the blood 
bank at Bethesda Naval Hospital?
    Navy Answer. The FDA conducted the annual inspection of the 
National Naval Medical Center Blood Bank in September through November 
1997 and cited 77 observations in reference to compliance issues. 
Analysis of these observations identified: (1) lack of process control 
in procedures, training, and documentation (2) failure to follow 
Standard Operating Procedures, (3) lack of adequate supervision. The 
Commander, National Naval Medical Center discontinued all blood 
collections on the same day that the FDA reported its finding. A new 
management team has established a plan of action and is currently 
achieving milestones to correct the problems.
    Question. Why did it take the FDA to identify and uncover the 
``sloppy management and rampant bookkeeping errors'' that sent suspect 
blood into the military blood supply? Why didn't the Commander of the 
hospital and the senior staff know about these serious problems?
    Answer. The FDA's observations of non-compliance reflected issues 
previously identified. These issues were being addressed by the senior 
management at the time of the FDA inspection. Correction of the process 
problems required time and dedication of resources to properly correct 
the root cause. There was no ``suspect'' blood placed into the military 
blood supply. There are currently two tests required by the FDA for the 
early detection of Human Immunodeficiency Virus (HIV), i.e. HIV 
antibody and antigen. The frozen blood units, which were not tested by 
the newly licensed (March 1996) HIV antigen test, were restricted for 
use. All these units, however, had been tested for HIV antibody and 
found to be negative.
    Question. What is being done to correct the situation? Will the 
blood bank remain closed?
    Answer. The Commander, National Naval Medical Center discontinued 
all blood collections on the same day that the FDA reported its 
finding. A new management team has established a plan of action and is 
currently achieving milestones to correct the problems. The blood bank 
consists of the Transfusion Service and the Blood Donor Center. The 
majority of the FDA's observations were in the Blood Donor Center. The 
Blood Donor Center will remain closed until all process problems have 
been corrected. The Transfusion Service has remained operational during 
this period by obtaining blood products from other sources.

                            Anthrax Vaccine

    Question. On December 15, 1997, Secretary of Defense Cohen 
announced a plan to systematically vaccinate all U.S. military 
personnel against the biological warfare agent anthrax. The 
vaccinations will begin in the summer of 1998 and will be administered 
to approximately 100,000 military personnel assigned to high threat 
areas. According to DOD, the vaccine is FDA licensed and has fewer side 
effects than the flu or typhoid vaccines. However, there have been 
questions about the safety of administering the vaccine.
    The Defense Health Program does not include funding for vaccinating 
our troops to protect them against anthrax. Funding is included in the 
Chemical and Biological program.
    Is there any reason to be concerned about the Anthrax vaccine? Is 
it safe?
    Answer. There is no valid reason to be concerned about the safety 
of the anthrax vaccine. The anthrax vaccine is a licensed vaccine, 
approved by the U.S. Food and Drug Administration (FDA) since 1970. It 
is a formalin-inactivated vaccine, which means that it used dead or 
killed bacteria as opposed to live bacteria, which have a higher risk 
of side effects. In this respect, it is very similar to the Diphtheria 
vaccination (DPT) that all children in the U.S. receive before they can 
enter public school. It has been routinely administered in the U.S. to 
veterinarians, laboratory workers, and livestock handlers for more than 
25 years and has an excellent safety record. No reports of significant 
adverse effects have been reported by the producer of the vaccine, the 
Michigan Biologic Products Institute.
    This same anthrax vaccine was given to approximately 150,000 
military members during the Gulf War. Several national scientific 
groups, to include the Presidential Advisory Committee on Gulf War 
Veterans' Illnesses, have closely examined this issue and found no 
evidence to link the anthrax vaccine with illnesses among Gulf War 
veterans.
    To validate the safety of the Department's Anthrax Vaccination 
Program, an external review of the health and medical aspects of the 
program was performed by an independent expert, Dr. Gerard N. Burrow, 
who serves as Special Advisor for Health Affairs for the President of 
Yale University. Dr. Burrow, who previously chaired the Institute of 
Medicine Committee on Health Consequences of Persian Gulf War Service, 
completed his independent assessment of the program on or about 
February 19, 1998. In his report, Dr. Burrow concluded that the FDA-
licensed anthrax vaccine appears to be safe and offers the best 
available protection against anthrax as a biological weapons agent.
    Question. How many doses are required to protect a soldier?
    Answer. The FDA-licensed anthrax vaccine should be administered in 
accordance with the manufacturer's package insert that specifies that 
the primary series must be subcutaneously administered in a six shot 
regimen. The first three shots are given 2 weeks apart at intervals of 
0, 2, and 4 weeks, followed by three additional shots given at 
intervals of 6, 12, and 18 months. After the primary series has been 
completed, an annual booster shot is required to maintain ongoing 
immunity.
    Question. When will the vaccines be administered and to whom?
    Answer. The total force of approximately 2.4 million, including 
more than 1 million members of the National Guard and Reserves, will be 
vaccinated against anthrax over a 6-7 year period in accordance with 
the Department's time-phased implementation plan. Under the time-phased 
implementation plan, forces expected to deploy to high threat areas 
will be the first to be vaccinated against anthrax. This phase, 
referred to as Phase I (program years 1 and 2), includes service 
members and mission-essential DoD civilians assigned or deployed to 
high threat areas in South West Asia (SWA) and North West Asia (NWA) or 
Korea. Since 3 March 1998, forces assigned to SWA have been receiving 
the anthrax vaccination with forces assigned to NWA scheduled to begin 
vaccinations on or about 1 August 1998. Early deploying forces 
supporting SWA and NWA, to include Active and Reserve Component, will 
constitute Phase II (program years 3, 4, and 5), which is scheduled to 
begin on or about January 2000. Phase III (program years 6 and 7), 
which is scheduled to begin on or about January 2003, will include the 
remainder of the force, both Active and Reserve Component, and 
accessions.
    Question. How much is it expected to cost?
    Answer. The current cost of a single dose at the manufacturer level 
is approximately $3.50. A troop equivalent dose (TED), consisting of 
the full six-dose regimen, cost approximately $21. When all associated 
costs (i.e., transportation, storage, administration, etc.) are 
included, the costs of vaccinating an estimated 2.4 million personnel 
over a 6-7 year period is projected to be approximately $130 million.

                      Medical Deployment to Bosnia

    Question. The Services are each providing medical support to 
deployed forces in Bosnia. The Army has the primary medical mission in 
Bosnia. The average rotation for certain physician and doctors have 
been shorter than anticipated primarily because of the lack of 
casualties. Therefore, surgeons in particular must be rotated in order 
to maintain their proficiency.
    What is the status of our medical deployment in Bosnia? What assets 
are still deployed?
    Answer. We are continuing our medical deployment rotations in 
Bosnia without interruption in order to provide the best medical 
support to our forward deployed forces. Our physicians, nurses, 
enlisted medics and other officers of the Army Medical Department 
(AMEDD) team are doing a superb job in all aspects of health care 
delivery. Our inpatient count remains low and stable. Patients 
requiring definitive treatment and longer hospitalization are evacuated 
as soon as possible to our hospital in Landstuhl, Germany. The current 
Army medical assets include: organic medical elements of the 1st 
Armored Division, the 30th Medical Brigade, the 67th Combat Support 
Hospital (CSH) (-), the 94th CSH(-), the 296th Ground Ambulance 
Company, the 261st Area Support Medical Battalion (-), the 226th 
Medical Logistical Company, the 100th Veterinary Detachment, the 159th 
Air Ambulance Detachment, a Forward Support Medical Team, and the 93rd 
Dental Detachment. These medical units except for the 30th Medical 
Brigade and the 261st Area Support Medical Battalion (-) just arrived 
in April 98. These two units just rotated new personnel from their rear 
assets.
    Question. How long is the average deployment for doctors, nurses 
and medics? Have these deployments been shorter or longer than 
expected?
    Answer. The deployments are for a period of six months. Some 
physicians, nurses, AMEDD officers and enlisted medics have voluntarily 
extended their stay for up to 364 days total for various reasons, 
foremost of which is job satisfaction. Activated U.S. Army Reserve 
physicians were deployed for shorter periods in order to return to 
their positions and/or practices.
    Question. Have medical personnel been able to maintain their skills 
in the field?
    Answer. With the exception of surgeons, the answer is yes, they 
have. Due to the stability of the region and the excellent aeromedical 
evacuation system, opportunities for surgeons to operate are reduced. 
They perform the same procedures normally done in our Army hospitals 
here in the United States, from seeing outpatients, to performing 
special procedures in various specialties found in CSHs, like 
orthopedics, family practice, and obstetrics/gynecology (OB/GYN). As 
you are well aware we have a number of female soldiers deployed and we 
want to provide them the best OB/GYN support wherever they may be. Our 
goal is to continue to hone the skills of our medical personnel 
whenever and wherever we can. Deployments like Bosnia-Herzegovina are 
excellent training vehicles for AMEDD soldiers as well as with other 
branches of the Army.
    Question. What have we learned with the deployment of telemedicine?
    Answer. Lessons learned from deployment of telemedicine in Bosnia 
fall into two categories.
    Technical lessons: High-bandwidth satellite communication for 
telemedicine was not cost-effective in Bosnia. We now look first to 
commercial companies to supply low-bandwidth landlines and if they are 
not available, we turn to commercial satellite links. For the longer 
term, we need to build communications infrastructure for telemedicine, 
along with other medical system requirements, into our deployable 
medical units, thus integrating them into the Signal community.
    Business Process lessons: Even though the use of telemedicine may 
seem intuitive to some people, we found that even highly educated 
clinicians had trouble utilizing the technology without adequate 
training. Training is the key to usability as well as to user 
acceptance. The most effective way to increase the training 
opportunities is to make the use of telemedicine an integral part of 
the business process in our peacetime MTFs. Once it becomes a part of 
everyone's daily practice, it will achieve its maximum effectiveness in 
the field.
    The lack of training and user familiarity resulted in the following 
observation from the data collection team:
    ``We learned that you can't save evacuations if you don't re-
engineer. We didn't re-engineer in Bosnia. Of the 285 evacuations that 
occurred in the last six months of our data collection, a sizable 
number of them (93) were for lab/x-rays/EKG . . . simple, inexpensive 
portable diagnostic equipment far-forward would have provided the 
clinicians in those areas the ability to diagnose the diseases without 
sending the patient for a consult to the `Blue Factory' ''

                            Gulf War Illness

    Question. The Comprehensive Clinical Evaluation Program (CCEP) is 
DOD's primary clinical program for addressing Gulf War Illness.
    Please tell the Committee about your Clinical Evaluation Program 
(sic) (CCEP). What is the process for care for soldiers affected with 
Gulf War Illness?
    Answer. The Comprehensive Clinical Evaluation Program (CCEP), 
developed by a multidisciplinary team of DoD and VA medical 
specialists, was established in June 1994, for Gulf War veterans with 
symptoms or illnesses they perceived were related to their Gulf War 
experience. To date, there is no singular entity that comprises the so-
called Gulf War Illness. Gulf War veterans have experienced a wide 
variety of diagnosed and undiagnosed medical conditions, which span the 
entire range of medical experience. The original CCEP was refined based 
upon recommendations of the Institute of Medicine within the first year 
of the program. This refinement facilitated the completion of most of 
the evaluation services at a local military treatment facility (MTF) 
rather than travel extensively to the larger medical centers. The 
history and medical examination is comparable to an evaluation 
conducted for an in-patient hospital admission. The medical review 
contains questions about family history, health, occupation, unique 
exposures in the Gulf War, and a structured review of symptoms. Health 
care providers specifically inquire about the symptoms and exposures 
listed on the CCEP Provider-Administered Patient Questionnaire. The 
medical examination focuses on patient symptoms and health concerns, 
and included standard laboratory tests (complete blood count, 
urinalysis, and serum chemistries) and other tests as clinically 
indicated. Patients with complex symptoms or whose needs exceed the 
capacity of the local MTF are referred to one of the major military 
medical centers.
    Those with persistent concerns about impaired physical functioning 
are referred to the Specialized Care Center (SCC) and the Walter Reed 
Army Medical Center. The SCC provides an intensive three-week 
evaluation, care, and rehabilitation program for CCEP participants 
suffering from chronic, disabling symptoms. Offering a 
multidisciplinary team of physicians from various specialties, 
behavioral health psychologists, nurses, and physical and occupational 
therapists, the treatment program effectively focuses on functional 
improvement rather than an endless search for etiology.
    Question. How many soldiers have shown symptoms of Gulf War Illness 
(sic)?
    Answer. There is no singular entity that comprises of Gulf War 
Illness. Gulf War veterans have experienced a wide variety of diagnosed 
and undiagnosed medical conditions, which span the entire range of 
medical experience. We reiterate the consensus of the scientific 
community, including prior findings of the Institute of Medicine, that 
Gulf War veterans' illnesses appear to be a heterogeneous group of 
disorders, exhibiting widely varying manifestations and not amenable to 
a single unifying case definition. Therapeutic approaches have been 
tailored appropriately to each individual veteran's needs.
    Question. How many soldiers have been evaluated to date? How many 
soldiers are currently being treated?
    Answer. As of March 31, 1998, 26,698 soldiers have been evaluated 
by the CCEP. An additional 1,499 soldiers are undergoing evaluation. 
Statistics for treatment per se are not collected since the soldiers 
who require follow-up treatment are referred to appropriate providers 
in the general Military Health Systems (MHS).

                  Composite Health Care System (CHCS)

    Question. In 1995, the Defense Health Program completed development 
and deployment of the Composite Health Care System (CHCS), an automated 
medical information system with a life cycle cost of $2.8 billion. The 
Department is proposing to now proceed with CHCS II at a life cycle 
cost of about $7.2 billion.
    What has been the reaction of the people in the medical treatment 
facilities to using the existing CHCS?
    Answer. The reaction has been positive. The following is a list of 
benefits identified by end-users themselves during a survey of 10 CHCS 
sites:
 General
     Avoidance of repeat visits caused by misplaced or 
incomplete information
     Reduced length of stay because of earlier availability of 
diagnostic results
     Increased availability of physician, nurse and support 
personnel time
     Improved documentation
     Electronic mail
 Benefits to Patients
     Responsive scheduling of appointments
     Fewer delays in receiving laboratory and radiology results
     Reduced waiting times at pharmacy
     Fewer repeated tests due to lost or delayed results
 Benefits to Health Care Providers:
     Easier access to complete patient care information and 
administrative data
     Visibility to complete patient care information and 
administrative data
     Visibility to complete pharmacy profile
     Better quality control of health care process
     Immediate access to pertinent patient data
     Transmittal of outpatient orders
     Tracking status of orders
     Display of medication profiles, graphs of lab values, 
patient measurements, and clinical appointments on demand
 CHCS streamlines administrative function such as: patient 
registration/data accessibility; patient/bed management; record & film 
tracking; patient accounting; and work load reports
 Clinical users identified the following as requirements for 
future development:
     Improve documentation for both inpatient and ambulatory 
encounters
     Provide a graphical user interface
     Simplify navigation through screens to enter/access 
information
     Improve provider order entry capability
    Question. What do you see as its (CHCS) strengths and weaknesses?
    Answer. Strengths: The GAO issued a report titled, ``MEDICAL ADP 
SYSTEMS: Defense Achieves Worldwide Deployment of Composite Health Care 
System,'' dated 5 April 1996. It noted that the DoD has successfully 
completed its planned development of the CHCS and is in a position to 
begin realizing the benefits of the system such as improved scheduling, 
greater and quicker access to patient information, and improved 
productivity for health care providers. The report also notes that 83 
percent of this saving is attributed to increased productivity and 
direct cost offsets. The Gartner Group at a December 97 in process 
review noted CHCS as ``a resounding success in world-wide integrated 
health care delivery.''
    CHCS streamlines administrative functions such as:
     Patient registration/data accessibility
     Patient/bed management
     Records & film tracking
     Patient accounting
     Workload reports
     Electronic mail
    Health Care Professionals spend less time collecting, tracking, and 
distributing patient information since CHCS:
     Provides immediate access to pertinent patient data
     Transmits orders
     Assists in formulating multi-disciplinary care plans
     Provides work lists for nurses and ancillary departments
     Tracks the status of orders
     Reports results in a variety of custom formats
     Displays medication profiles, graphs of lab values and 
patient measurements, and clinical appointments on demand.
    Weaknesses: At the time CHCS was deployed many of the weaknesses 
noted were not designated to be a part of the system functionality. 
Noted shortcomings of CHCS and other deployed clinical AIS systems:
     An electronic equivalent of patient records is not 
provided precluding the capability to electronically transmit service 
members' medical records to the theater of operations.
     Consult tracking, many diagnostic tests, and documentation 
of other clinical procedures cannot be performed.
     The comprehensive capture of data and synthesis of 
information regarding findings by physicians and nurses, patient 
complaints, physical exams, differential diagnoses, developing 
treatment strategies, etc. is not provided
     Detailed information concerning health care protocols and 
outcomes is not contained
     Health care providers cannot view patient historical data 
during a patient encounter.
     Support for preventive medicine and dental services is not 
provided
     Numerous computer platforms used are difficult to manage, 
and lack electronic interoperability, integration, and interface with 
other medical systems, the Global Command and Control System (GCCS), 
and the Global Command Support System (GCSS). Input and retrieval of 
data from other systems requires the creation of custom coded 
interfaces. Lack of interoperability results in redundant data storage, 
increases the probability of human error, and increases life cycle 
costs.
    Question. When the original CHCS was fielded, DoD projected that it 
would provide total benefits of $4.1 billion. This included 
productivity by having the patients' medical records on the computer, 
savings from eliminating the paper-based system and an anticipated 
decrease in malpractice claims.
    Do you believe that CHCS is achieving these goals?
    Answer. Yes, CHCS surpassed the goals for which it was designed. 
Specifically it successfully automated:
     Patient administration functions (such as registration, 
admission, and disposition)
     Ordering, processing, and retrieving results of laboratory 
and radiology procedures
     Ordering and recording prescriptions
     Radiology reports
     Patient appointment scheduling.
    Question. Did CHCS successfully automate the medical records, 
eliminating the paper-based system?
    Answer. It successfully automated the functions listed above. CHCS, 
supplemented by numerous stand-alone, specialized, information systems, 
forms the major automated vehicle for supporting the patient care 
process. It was, however, designed to operate within one catchment area 
or facility using 1980s era functional requirements and technical 
architecture. While these stand-alone systems have performed well, they 
were never designed to facilitate the exchange of information from one 
system and/or facility to the next. They do not and were not designed 
to address all the functionalities currently required to obtain a 
completely automated medical record, such as: ambulatory documentation, 
inpatient order entry, and complex decision support. This will happen 
with the CPR.
    Question. Has there been a decrease in malpractice claims?
    Answer. The original CHCS benefit realization work used historical 
malpractice rates and payment figures to predict what future costs and 
case numbers would be. They predicted that 1986 would see an increase 
to 401 claims at a cost of approximately $58.9M. Malpractice 
information for DoD during the period of 1988 through 1995 is 
summarized in Legal Medicine: Characteristics of DoD Medical 
Malpractice Claims: An Update, A Quality Management Tool for DoD(HA), 
the TRICARE Lead Agents and the MTF by Granville, Wiley, Peterson, 
Shutt, and Litts. It reveals that 3,077 claims were filed against the 
DoD for medical malpractice, for a total of $309,158,644 for that 8-
year period. This is an average of 384 claims per year, 17 less than 
what was predicted for 1986 alone.
    Question. Is $4.1 billion still the right number?
    Answer. The correct benefit results are annotated below. The table 
summarizes the benefits, costs, and positive return on investment (ROI) 
for CHCS. Category 1 benefits (Cost Avoidance and Direct Offsets--such 
as reduced malpractice claims) are calculated with the other benefit 
types and also separately since they were determined to represent the 
most tangible and easily realizable of all those attributed to the 
implementation of CHCS.

      Table 1.--CHCS Benefits, Costs, and ROI through October 1996
                         (Figures in $Millions)
------------------------------------------------------------------------
                                                                  All
                                                     CAT 1    Categories
------------------------------------------------------------------------
Benefits.........................................      871.8    1,111.50
Costs............................................      852.5       861.9
Net Benefit......................................       19.3       249.6
ROI..............................................         2%         29%
------------------------------------------------------------------------
A($ are in discounted FY86 dollars).

    Question. In preparation for developing CHCS II, have you 
undertaken a formal after action review of the original CHCS program to 
identify any lessons learned or any shortfalls to be corrected? If so, 
what are those lessons learned?
    Answer. Yes, several efforts were accomplished, and are summarized 
below. These assessments provide valuable information for the present 
CHCS II staff who use these ``lessons learned'' to improve the business 
practices and systems they implement today.
     A detailed mission assessment was completed by the 
functional community to determine if there was a critical mission need. 
This is documented in the CHCS II Mission Needs Statement (MNS). Beyond 
the high level need which is solidly identified in the MNS, the 
functional community, as represented by the Clinical Working Group, 
continues its assessment to determine specific detailed functionality 
requirements and their prioritization.
     The CHCS Benefit Realization Improvement Program (BRIP) 
sponsored a lessons learned project that surveyed multi-disciplinary 
end-users at several sites concerning CHCS and the deployment process 
used. The project separated the information into three essential 
categories: planning core lessons, implementation core lessons, and 
work center considerations. There is also information addressing 
specific CHCS modules, including: Laboratory, Patient Administration, 
Patient Appointing and Scheduling, Pharmacy, Radiology, Managed Care, 
and System Change Requests. This information has been shared with the 
entire MHS community via the BRIP Newsletters available on the CHCS II 
website.
     The Navy Medical Information Management Center sponsored 
an Information Resources Manager's conference to capture CHCS lessons 
learned along with organizational issues specific to the Navy 
information management community. Staff from across the enterprise 
identified not just lessons learned but also solutions, obstacles, and 
alternatives.
     The CHCS Program Office developed the CHCS 
``Implementation Assistance Manual'' which contains a robust section of 
lessons learned during the implementation of CHCS. This manual was 
designed for use by facility staff during implementation of CHCS, and 
provides a valuable resource for the current CHCS II staff.
    Question. What are the major benefits of CHCS II compared with the 
original CHCS?
    Answer. CHCS II will support the creation of a CPR as well as 
integrate pertinent functions that currently exist, are in development, 
or are planned in over 50 separate DoD and Service-specific legacy and 
interim migration systems. As it is envisioned, the CHCS II will 
provide the most feasible functional and technical solution for a 
complete, longitudinal, clinical and preventive record of care for 
every DoD beneficiary.
    The CHCS II Benefits Assessment is presented in the CHCS II 
Benefits Assessment Analysis, dated 15 April 1998. The assessment was 
implemented using the Episode of Care methodology. The majority of the 
projected benefits will be from utilization management (UM), inclusive 
of health care demand reductions and reductions in inpatient length of 
stay. Deployment of the CHCS II will generate the following specific UM 
benefits:
           The substitution of outpatient procedures for 
        inpatient admissions.
           The reduction of the length of stay of inpatient 
        admissions.
           The reduction of the intensity of inpatient care via 
        clinical guidelines and utilization review.
           The ability to monitor cost of care by procedure and 
        provider through utilization review.
           The ability to create and improve community-oriented 
        preventive health programs, including well-baby, health 
        promotion, dial-a-nurse, and immunizations.
    Caregiver timesaving and efficiencies are also anticipated from the 
deployment of the CHCS II. The CHCS II Benefits Assessment projects the 
following timesaving due to the implementation of provider 
workstations, order entry, results retrieval, notewriting, summary of 
care, diagnostic and procedure coding, digital imaging, and vital signs 
capture. The implementation of clinical information systems can improve 
the efficiency of healthcare provider time usage by the following:
           Complete CPRs eliminates redundant intake 
        interviews, chart reviews and testing.
           Instant availability of patient records at any 
        workstation eliminates wait times for laboratory and radiology 
        results.
           Eliminates dictation, transcription, and review of 
        notes.
           Manages clinical information from patient records 
        and medical knowledge databases.
           Direct physician and RN order entry ability 
        eliminates work steps, transcription, and duplicate entries.
           Provides standardized care plans and ``charting by 
        exception''.
    Further benefits from CHCS II will be derived from the following 
cost avoidance:
           The reduction of adverse drug events and adverse 
        drug reactions by having the complete CPR for medical history 
        and allergies, and the electronic order entry function for 
        inpatient and outpatient drug orders.
           The increase in operating room capacity by 
        accelerating the surgical scheduling process, thus increasing 
        the number of surgeries in the facility without increasing the 
        number of staff.
           The reduction of medical malpractice claims.
           The reduction of laboratory and radiology testing 
        costs through universal access to results and digital 
        archiving, as well as providing caregivers the cost of tests at 
        the time the tests are ordered.
    CHCS II will also support the validated requirement for seamless 
medical care for all beneficiaries across the operational continuum. 
Specifically, the CHCS II will allow for timely, pre-, during, and 
post-deployment medical assessment for the active duty population. 
Additionally, when integrated with the Theater Medical Information 
Program, CHCS II will provide the mechanism for computerized medical 
data in the field preventing the problem of dealing with lost or 
missing records within the theater of operations, as well as enhance 
delivery of care. Utilizing the same information system in both peace 
time and theater operations significantly reduces medical staff 
training requirements.
    In compliance with the Clinger-Cohen Acts of 1996, the CHCS II 
Program office accomplished a comparison and ranking of the CHCS II, as 
part of the Analysis of Alternatives (AoA) dated April 17, 1998. 
Appendix C of the AoA reviews the CHCS II along four major areas: risk, 
organization impact, mission effectiveness, and benefit-cost impact. 
This evaluation, in accordance with the GAO/AMIS-10.1.13 (Feb 1997), 
demonstrates the CHCS II as the best investment opportunity for the 
MHS.
    Question. As part of implementing ITMRA, OMB issues a list of eight 
criteria that all major information systems are required to meet. With 
reference to CHCS II, for each criteria could you provide the name of 
the document where you address compliance with that criteria and the 
name of the organization or office that has the responsibility for 
confirming your programs compliance with that criteria.
    Answer. The office responsible for confirming compliance of CHCS II 
with these criteria is ASD(C3I). In addition, the CHCS II program 
receives functional oversight from the MHS Program Review Board and the 
MHS Proponent Committee. It also receives programmatic oversight from 
the TRICARE Management Activity. Furthermore, the CHCS II program has 
had external review from the General Accounting Office and the DoD 
Inspector General.
    Criterion 1: Does the project support core/priority mission 
functions that need to be performed by the Federal government?
    This criterion is addressed in the CHCS II Analysis of 
Alternatives.
    Criterion 2: Can this project be undertaken by an alternative 
private sector or governmental source?
    This criterion is addressed in the CHCS II Analysis of 
Alternatives.
    Criterion 3: Does this project support work processes that have 
been simplified or otherwise redesigned to reduce costs, improve 
effectiveness, and make maximum use of commercial, off-the-shelf 
technology? (OMB recognizes that many agencies are in the middle of 
projects initiated prior to enactment of the CCA, and may not be able 
immediately to satisfy the criteria. For those systems that do not 
satisfy the criteria, OMB will consider requests to use funds to 
support the redesign of work processes, the evaluation of investment 
alternatives, the development of information architectures, and the use 
and evaluation of prototypes.)
    This criterion is addressed in the CHCS II Analysis of 
Alternatives.
    Criterion 4: Does your IT portfolio management and analysis 
demonstrate that the return on investment is equal to or better than 
other bureau IT investments. Does this project demonstrate a projected 
return on the investment that is clearly equal to or better than 
alternative uses of available public resources? Return may include: 
improved mission performance in accordance with GPRA measures; reduced 
cost; increased quality, speed, or flexibility; and increased customer 
and employee satisfaction. Return should be adjusted for such risk 
factors as the project's technical complexity, the agency's management 
capacity, the likelihood of cost overruns, and the consequences of 
under or non-performance.
    This criterion is addressed in the CHCS II Analysis of Alternatives 
and the CHCS II Economic Analysis.
    Criterion 5: Is the project consistent with Federal, Commerce, and 
bureau information architectures which: integrate agency work processes 
and information flows with technology to achieve strategic goals; 
reflect the bureau's technology vision and year 2000 compliance plans; 
and specify standards that enable information exchange and resource 
sharing, while retaining flexibility in the choice of suppliers and in 
the design of local work processes?
    The CHCS II project is predicated upon compliance with the 
appropriate Federal, Commerce, and Health Affairs directives to ensure 
that strategic goals and Year 2000 (Y2K) compliance are achieved, while 
providing essential interoperability and flexibility. CHCS II has been 
developed in response to both National Policy and Public Law. The 
architecture and design comply with standards and directives in the 
areas of Y2K (including FAR Part 39 for COTS products), 
interoperability (such as DII/COE Level 5), and security (C2 level of 
trust), CHCS II is based on the Joint Technical Architecture (Version 
2.0) to provide an open-system infrastructure for evolving system 
requirements and capabilities.
    The CHCS II Test and Evaluation Master Plan (TEMP) provides a 
comprehensive treatment of the architecture and design with respect to 
critical system characteristics and the extent to which they are based 
on compliance with the appropriate Federal, Commerce, and Health 
Affairs directives. The MHS Y2K Plan, the CHCS II Single Acquisition 
Management Plan (SAMP), and the CHCS II Program Office Strategic Plan 
also address compliance with this OMB criteria.
    Criterion 6: Has risk reduction been addressed by avoiding or 
isolating custom-designed components to minimize the potential adverse 
consequences on the overall project; using fully tested pilots, 
simulation, or prototype implementations before going to production; 
establishing clear measures and accountability for project progress; 
and securing substantial involvement and buy-in throughout the project 
from the program officials who will use the system?
    This criterion is addressed in the CHCS II Program Office Strategic 
Plan, the CHCS II SAMP, the CHCS II TEMP, the CHCS II System 
Integration Plan, the CHCS II Analysis of Alternatives, and the CHCS II 
Integration and Migration Plan.
    Criterion 7: Can the project be implemented in phased, successive 
chunks as narrow in scope and brief in duration as practical, each of 
which solves a specific part of an overall mission problem and delivers 
a measurable net benefit independent of future chunks?
    This criterion is addressed in the CHCS II Program Office Strategic 
Plan, the CHCS II SAMP, the CHCS II TEMP, the CHCS II System 
Integration Plan, the CHCS II Analysis of Alternatives, and the CHCS II 
Integration and Migration Plan.
    Criterion 8: Does the project employ an acquisition strategy that 
appropriately allocates risk between government and contractor, 
effectively uses competition, ties contract payments to 
accomplishments, and takes maximum advantage of commercial technology?
    This criterion is addressed in the CHCS II Program Office Strategic 
Plan, the CHCS II SAMP, the CHCS II TEMP, the CHCS II System 
Integration Plan, the CHCS II Analysis of Alternatives, and the CHCS II 
Integration and Migration Plan.

                       Year 2000 Computer Problem

    Question. One of the problems that we face as we enter the next 
century is older computers that are only programmed to remember the 
last two digits in a year. Thus they remember ``1997'' as simply 
``97''. The year 2000, however, will be saved as ``00'', the same as 
the year 1900, leading to serious calculation errors and system 
failures.
    Are you confident of the Defense Health Program's ability to 
correct this problem before the year 2000?
    Anwer. Yes, we are confident that all mission critical Defense 
Health Program systems will be compliant by the year 2000. The Defense 
health Program has established an aggressive approach to addressing the 
Year 2000 (Y2K) problem.
           An Integrated Product Team representing all Business 
        Areas and the three services has been addressing Y2K issues for 
        the MHS systems.
           An MHS Y2K Management Plan has been published and is 
        in use to ensure consistent guidance and action.
           A Compliance Assurance Review, currently being 
        conducted for the Clinical Business Area, is now being expanded 
        to the other business areas. Elements of this activity are:
           Reviews of each system to validate compliance 
        strategy (has been completed for the Clinical Business Area).
           Identification, documentation and reviews of all 
        interfaces within and between MHS and other systems.
           Performance of Independent Verification and 
        Validation for mission critical systems.
    Question. How many systems does the Defense Health Program have to 
evaluate and where do they stand in the process of assessment, 
renovation, validation and implementation?
    Answer. There are 112 Automated Information Systems. In addition, 
there are information system infrastructure components that are being 
evaluated for the need to fix, repair, or replace. Of the 112, 33 have 
been designated for repair or have been repaired. These break down to 
18 systems in renovation, 3 systems in validation, 2 systems in 
implementation and 10 systems that have completed repairs.

    [Clerk's note.--End of questions submitted by Mr. Young.]
                                         Wednesday, March 18, 1998.

                   READINESS OF UNITED STATES FORCES

                               WITNESSES

GENERAL WILLIAM W. CROUCH, VICE CHIEF OF STAFF, UNITED STATES ARMY
ADMIRAL DONALD L. PILLING, VICE CHIEF OF NAVAL OPERATIONS, UNITED 
    STATES NAVY
GENERAL RICHARD I. NEAL, ASSISTANT COMMANDANT OF THE MARINE CORPS, 
    UNITED STATES MARINE CORPS
GENERAL RALPH E. EBERHART, VICE CHIEF OF STAFF, UNITED STATES AIR FORCE

                              Introduction

    Mr. Young. The Committee will come to order.
    As I explained, some of the members are busy meeting with 
the Speaker. Another one of our members is in the Chair 
presiding over this great debate this afternoon on the 
withdrawal of forces from Bosnia. But I expect that shortly we 
will have fairly good attendance.
    We are happy to welcome General William Crouch, Vice Chief 
of Staff of the Army; Admiral Pilling, Vice Chief of Naval 
Operations; General Neal, Assistant Commandant of the Marine 
Corps, and General Eberhart, Vice Chief of Staff of the Air 
Force.
    This afternoon's hearing is closed, so you can be free to 
tell us all of those little goodies that you might not in an 
open session.
    Our topic this afternoon is readiness. We have heard a lot 
of comment on readiness from witnesses who have been here prior 
to your visit. There are some major concerns at the operational 
level, and we are concerned because some of us are not sure 
that this budget actually meets the requirements of the 
services to maintain that readiness and to--not only for those 
who are on the so-called point of the spear, but for those who 
are in a follow-on position.
    We are happy to have you here because we know the important 
role that all of you play in these major decisions. But before 
we start, I would like to yield to Mr. Murtha.
    Mr. Murtha. Nothing.
    Mr. Young. Mr. Murtha has no comment at this point. Your 
entire statements will be placed in the record, and you may 
feel free to summarize them in any way you like, and then once 
we have heard from all of you, we will have some interesting 
questions for you.
    General Crouch, would you like to start, sir?

                  Summary Statement of General Crouch

    General Crouch. Yes sir, thank you, very much. Before I 
begin, let me thank both of you gentlemen personally for the 
many trips that you have made to Bosnia, to all of our training 
centers, and to Korea; and for the intense interest that you 
have shown in the Army, its condition, its readiness, and our 
troopers--where you have made contact with them constantly in 
the field. That is extremely important, and it means a lot to 
us.
    There are four purposes of the Army, as you know--to 
compel, deter, reassure, and support. In Southwest Asia right 
now, we have 9,000 troopers who we have been able to deploy in 
slightly less than five days. It took us almost a month eight 
years ago to be able to amass that amount of combat power. It 
is a tremendous improvement in strategic mobility and 
capability because of prepositioning of equipment and readiness 
of troops.
    In Bosnia, as you all know very well, we have 8,500 troops 
now deployed. By the way, they have not been challenged by any 
of the three former warring factions, who were not ready to 
take them on, and these people were accustomed to 600 years of 
ethnic strife.
    In Korea, the 2d Infantry Division continues to deter 
incursion from the North. For 45 years they have been in 
position to contribute, with their Republic of Korea allies.
    Today, in Houston, gentlemen, as I am sure you know, the 
National Guard and Active personnel are involved in training 
the municipal government in protection from weapons of mass 
destruction. National Guardsmen have been on active duty 
continuously in the Southeast and Midwest over the past few 
months in disaster relief, not to mention what they did in such 
events as Hurricane Andrew in 1992.
    Commanders are accustomed to a balance between training 
readiness and quality of life for their people. That is all 
near-term readiness. They are constantly challenged with 
keeping the amount of resources they are given for tank ranges 
and training, balanced with homes and quality of life on post. 
It is a daily and yearly balance that they go through.
    But contrast that with the Department. I have found the 
same kind of balance, but instead of the near-term training and 
quality of life, it is near-term readiness as opposed to 
modernization. We know that if we resource only near-term 
readiness, we are going to wind up with a readiness disaster 
about 10 years from now in terms of modernization. So we have 
to work that balance, just as finely as a commander does at 
Fort Hood or in Korea, to make sure that we make the proper use 
of those resources.
    What we have tried to do is finely tune the balance with 
this budget submission. We have consciously decided we have to 
invest more in modernization than we have in the past. What 
that has done is stretch us in the only place that we can 
absorb it, which, is of course, in near-term readiness, which 
we have tried to stretch through efficiencies. To a large 
extent, we have had success with that.
    Very frankly, however, the 1998 and 1999 budgets are so 
finely tuned that every single commander has told me personally 
he has no leeway. Therefore, twice I have asked them to come in 
and lay out for me how they are going to deal with 1998 and 
1999. We will make it in terms of readiness, but I am extremely 
concerned. I am concerned enough to have asked them to come in 
and explain twice where we stand and where we are going into 
1999.
    And I don't trifle personally with their time. I have been 
there, and they don't have time to waste.
    I would say with guarded optimism that as far as the future 
is concerned, we have given you the best shot that we could on 
this budget. I am concerned about unintended results of changes 
in the way that we have had to balance this. In other words, if 
there are changes from what we have submitted and the final 
products we could have to deal with unintended results.
    The second thing I am concerned with, of course, is the 
supplemental for Bosnia that we have submitted for 1998. Sir, 
we must have that supplemental without offsets or we are going 
to be in deep trouble later on this year.
    Gentlemen, thank you.
    Mr. Young. General, thank you very much.
    [The statement of General Crouch follows:]

              [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]



    Mr. Young. Admiral.

                  Summary Statement of Admiral Pilling

    Admiral Pilling. Mr. Chairman, Members, thank you for the 
opportunity to discuss readiness with you today. I would just 
like to make a few brief remarks.
    Your Navy is the best in the world, and we continue to 
display our relevance on a continuing basis. In November of 
last year, your Navy was called upon to demonstrate American 
resolve in enforcing U.N. sanctions. The Navy-Marine Corps 
team, led by the carriers GEORGE WASHINGTON, NIMITZ and the 
INDEPENDENCE, provided the combat power that led to a 
successful diplomatic outcome in Iraq. Today, Iraq is well 
aware that the JOHN C. STENNIS, the INDEPENDENCE and the TARAWA 
remain on station in the Gulf, ready to respond if needed.
    The recent events surrounding Iraq and our Navy's forward 
presence in the Gulf is a clear example of your Navy and Marine 
Corps team's ability to react quickly in a crisis. Whether 
enabling diplomacy in the Iranian gulf or influencing events 
ashore, from A to Z, referring to Albania and Zaire last year, 
our ability to transition forces quickly between trouble spots 
throughout the world is an inherent quality. It also 
demonstrates your Navy is ready to influence directly and 
decisively events ashore, any time, anywhere.
    But the fragile nature of readiness requires that we remain 
attentive for signs of degradation. Deployed readiness is high, 
and, by design, nondeployed readiness is being maintained at a 
lower level. This cyclical readiness posture has served us well 
in the past, and is the most effective and efficient 
utilization of our resources.
    With reduced budgets and greater efficiency come increased 
risks, which General Crouch addressed. Funding shortfalls 
today, when they occur, have a greater and more rapid impact on 
nondeployed forces than in the past. Our readiness monitoring 
system has proved reliable in identifying deficiencies, and we 
have been quick to take corrective action when they have been 
identified.
    Last year we were faced with an underpricing and resultant 
shortfall in our aviation readiness account. This committee was 
instrumental in obtaining funds to correct this underpricing, 
and I would like to take this opportunity to thank you. Your 
plus-up, in addition to the $2.3 billion the Navy moved into 
our readiness accounts in fiscal years 1999 through 2003, will 
facilitate the procurement of additional resources to enhance 
readiness.
    Specifically, it will allow our maintainers to order the 
necessary parts and perform the essential repairs needed to 
improve material conditions. We have already observed 
improvement in aircraft-mission-capable and full-mission-
capable rates.
    Balancing the fiscal and operational needs of today with 
the defense requirements of tomorrow is a challenging task. At 
the same time, providing our sailors with a quality of life 
commensurate with the sacrifices they make is a necessity. We 
cannot accomplish these alone. We need your continuing support.
    Thank you for the opportunity to testify. I look forward to 
responding to your questions.
    Mr. Young. Admiral, thank you very much.
    [The statement of Admiral Pilling follows:]

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    Mr. Young. General Neal?

                   Summary Statement of General Neal

    General Neal. Mr. Chairman, fellow committee members, we 
appreciate the opportunity to be before you to discuss 
readiness in the Marine Corps specifically.
    Your Marine Corps remains ready today. We take very 
seriously the challenges our Commandant has laid on us to make 
Marines and to win battles. At present, we have over 27,000 
Marines forward deployed around the world, from Haiti to Bosnia 
to Southwest Asia. They are well trained, they are well 
equipped and they are well led.
    Our major problem, as you well know, sir, is the age of our 
equipment. It just takes us longer to maintain and it costs 
more to maintain it, more in precious dollars and also in 
manpower. So our Marines, as they are maintaining this 
equipment, they are losing valuable training time and also they 
are losing quality-of-life time.
    If we are not careful, today's modernization problems may 
well become tomorrow's readiness problems. The solution is 
modernization and continuation of this effort. The actions of 
this committee over the past years have been substantially in 
support of us and have been appreciated by your Corps.
    I look forward to answering your questions.
    Mr. Young. Thank you, General.
    [The statement of General Neal follows:]

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    Mr. Young. General Eberhart.

                 Summary Statement of General Eberhart

    General Eberhart. Sir, first of all, I would like to join 
my counterparts in thanking this Committee for all they have 
done to make sure we have a ready, capable force. Your help 
over the years has led to that situation.
    It is a pleasure to be with you. It is an honor to 
represent the men and women of the United States Air Force. You 
know, from your travels, that they are highly dedicated, very 
motivated, and we owe them nothing less than to make sure they 
are well equipped, properly trained, and ready for any task we 
send their way.
    So as we look at those forces in the field today and, as 
you know from your visits, when we ask them, ``are you ready,'' 
they will tell you, ``yes, we are''; we are making the mark. 
However, they will also tell you it is tougher than it ever has 
been. It is tough to pass that test. Why? Because the equipment 
is aging and the operations tempo is up.
    So those two things certainly complicate that task. That is 
why it is so important to carefully balance modernization, 
readiness, and their Quality of Life, the Quality of Life of 
our soldiers, sailors, airmen, Marines, and their families. And 
we know this Committee is committed to making sure we have a 
ready, capable force not only today, but in the years ahead.
    Thank you very much.
    Mr. Young. General, thank you very much.
    [The statement of General Eberhart follows:]

              [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]



                          REMARKS OF MR. YOUNG

    Mr. Young. I think all of you know that members of this 
Committee are pretty aggressive in visiting with our troops, 
not only here at home in the continental United States, but 
overseas as well. In fact, several of us just a week ago were 
in Bosnia for 2 days. We understand the tremendous job that you 
do.
    But what I am hearing from all of you is that while things 
are really good today, readiness is sharp, readiness is up, in 
the future it could not be quite that good because we are 
wearing out people, we are wearing out equipment, we are having 
spare parts problems in some cases.
    And the commanders in the field tell us the same thing, 
that they have the best of what is available. But they express 
concern about what is in the line behind them if they have to 
replace what they have on the front lines now.
    The soldiers, the troops that we see, the men and women, I 
am just amazed at the confidence that they express in 
themselves and their units, the knowledge that they are doing 
something really important and the way, as much as they would 
like to be back home with momma and the kids, they realize that 
they are doing a very important job.
    I say that having just met on this last trip with about 25 
Reservists from my hometown, who really would rather be back in 
our hometown. But they understand they are doing a very 
important mission.

              FISCAL YEAR 1998 SUPPLEMENTAL APPROPRIATIONS

    So this brings us to the subject of the budget. In order to 
do the things that I am reading into what you are telling us, 
we need more money. I am really happy that all of you and the 
witnesses who have preceded you, and the administration this 
year have asked for the contingencies to be considered as an 
emergency and not be offset.
    We tried to get the administration to take that position 
last year, but they wouldn't so our leadership in the Congress 
backed away from that and we had to offset it. The truth is, 
now we have offset a little over $7 billion for Bosnia alone, 
and that will go a long way towards getting you well in some of 
the areas where you are wearing out equipment and where your 
spare parts are not keeping up with the demands.
    Anyway, we think we have a deal this year. This 
subcommittee reported out the supplemental for Defense on 
Thursday of last week without any offsets. We are going to the 
full committee on Tuesday next week, and we hope that we can 
maintain that no offsets, at least from the Defense budget.
    There are those who appear to be demanding offsets of the 
entire supplemental, including the Defense part of it, from 
non-defense areas. While that might work, I think it is 
dangerous, because I think that puts the question of 
survivability of the legislation on the floor.
    So I am not sure where we are going, but the members of 
this committee are doing everything we can not to offset that 
and further shrink what you have available to you.
    I have used my time for questioning to make that very 
profound statement, but we are going to be in a major battle 
here, and we have got to win. Otherwise, we are going to see 
things come to a screeching halt, I am afraid, sooner rather 
than later.

                          FORCE MODERNIZATION

    Mr. Murtha.
    Mr. Murtha. I appreciate what the Chairman is saying, 
because we will not vote for offsets. That means it will be 
vetoed and it will slow up the legislation. So I am hopeful if 
we can get a majority of members to vote this bill out without 
offsets.
    Domestic offsets will not solve the problem. Every agency 
is hurting and there are a lot of people who believe there is 
some easy way to get the money because it comes out of the 
domestic side. I don't believe that. I believe if we start that 
kind of stuff, in the end it will really hurt us.
    What I am hearing you say is a little different than what I 
have heard before--at least I haven't heard it for a long 
time--that modernization is just as important to readiness as 
some of the things that this Committee has been concentrating 
on. They kid me about the HMMWV seats and the boots and so 
forth that we put out there. We know how important those are. I 
know it and the committee does.
    I remember, years ago, 20 years ago, I suggested that we 
ought to be counseling some of our people because of abuse at 
home, because--and everybody laughed at that. But it sounds 
like things are changing right now, where modernization is 
raised to a level much higher than I heard before. No longer 
can we just take care of what we consider the immediate needs 
of the troops; we have to consider modernization or we are 
going to run into a problem.
    For instance, I understand that the Army needs 2,400 of the 
new tanks, and yet every way I look at it, they are only going 
to get 1,100 or 1,200 tanks, the A-1 and A-2. That means the 
Guard will not have any of the new tanks. So we are going to be 
substantially under the number of tanks you really need under 
any circumstances.
    The Navy has had a terrible problem with aircraft. They are 
worn out, they are old, and we have got problems there.
    The Air Force has been, at least I think has been, ahead of 
the modernization thing. With the F-22 they keep themselves in 
pretty good shape. I think we made a mistake when we didn't 
jump over the B-1 and go to the B-2, but that is because the 
Wall came down, and it is easy to say that now. But at any 
rate, I am beginning to see you say that modernization, what 
Shalikashvili said when he left, we need $60 billion a year in 
modernization.
    Would you all agree that is the right figure? Is that the 
figure we really need to get modernization up to the level that 
it should be?
    Admiral Pilling. We think $60 billion is about right, sir. 
We don't get there until about fiscal year 2001.
    General Neal. That was the figure that Shalikashvili, then 
Chairman, had laid out as sort of the mark on the wall, that if 
in fact we made a sustained level of investment at the $60 
billion mark, that in fact the modernization across DOD would 
be satisfied, the requirements.
    I think that is exactly where Secretary Cohen is trying to 
lead us, towards that $60 billion mark on the wall.

                 BALANCING READINESS AND MODERNIZATION

    Mr. Murtha. Should we consider modernization, does it now 
outweigh troop O&B and things like that?
    General Crouch. No.
    Mr. Murtha. In your estimation? We believe this is one of 
the best budgets we have gotten, more balanced, honest. We are 
going to have a hard time changing it.
    Do any of you think that we ought to reduce money for 
troops and put it into modernization?
    General Crouch. As I tried to say earlier, we have tried to 
push that as hard as we can. We have shifted as much as we can 
internally to modernization. I think at this point--and, sir, 
we have worked and stretched this thing about as far as we can, 
and that is the reason why you see the investment in 
modernization that we have made--anything that would further go 
after either base operations, repair and maintenance, or 
operating tempo (OPTEMPO), shifting it out of near-term 
readiness, would really cause us problems.
    Mr. Murtha. So the answer is not in cutting near-term 
readiness. You need modernization, but you need extra money for 
modernization. You can't do it with near-term readiness.
    Admiral Pilling. I would give a slightly different answer, 
sir. The way we look at it, at the top of the pyramid is 
readiness and quality of life for our people. Right after that 
is acquisition, or modernization, the word you are using. And 
right below that is infrastructure. If we were able to reduce 
some of our excess infrastructure, the transfer would be right 
into the modernization account.
    Mr. Murtha. One of the things I learned when I was out 
visiting McDonnell Douglas, they were telling me since Thailand 
cancelled their airplanes, we could get eight airplanes for $80 
million, 8-Ds with the new configuration.
    Does that make sense to make those kind of changes, if we 
could fine the offsets for them, to buy those? I know the 
Marine Corps doesn't need them for a couple of years, but does 
that make sense to buy the eight airplanes at that price if we 
can offset it?
    General Neal. I am not completely familiar with the price, 
but the requirement remains, and I would strongly say that just 
as you had alluded to earlier, the offsets are not resident 
within the Department of the Navy in order to afford those 
aircraft.
    But the requirement, yes, it is a legitimate requirement. 
It seems like it is a good step in the right direction. They 
were probably more affordable back when we programmed for them.
    Mr. Murtha. If we go to OMB and find some offsets someplace 
else, it is a buy, is what you are saying?
    General Neal. Yes, sir. I think what I would say as follow-
on to your question, and my two compatriots here, it is a 
balancing act, and I think all of us would probably step up to 
the table and say a lot of that, puts and takes and trading, 
was done within each of the services in trying to balance the 
modernization account, the quality-of-life account, and the 
readiness account.
    From the Marine Corps' perspective, we have made some tough 
calls, our Commandant has, based on staff input; and 
essentially we have put first priority on readiness, to be able 
to respond when called. And then, of course, we think it is a 
circle. It is almost like a life cycle.
    I think the next step is to try and get your modernization 
account where it is so that in fact you can then be 
contributing to readiness by having newer equipment, which 
frees up your Marines to train and, at the same time, for more 
quality of life.
    Mr. Murtha. It costs more money if you have older 
equipment, because of cannibalization.
    General Neal. Absolutely. And more time, too, which is a 
critical variant, where we tie up our young Marines on the 
flight line, the ramps and the motor pool.
    Mr. Murtha. Thank you.
    Mr. Young. Mr. Skeen.

        MODERNIZATION AND RESEARCH AND DEVELOPMENT REQUIREMENTS

    Mr. Skeen. Thank you, Mr. Chairman.
    Gentlemen, I am sorry I was not here to listen to your 
opening remarks, but I think we are reflecting along--on the 
same lines, I am concerned about the modernization situation, 
particularly with the advancement of technology in the kind of 
atmosphere we have today; it is so rapid.
    You are talking about $60 billion to either maintain the 
forces you have now and also take care of modernization?
    Admiral Pilling. The $60 billion is just procurement, sir.
    Mr. Skeen. What about modernization?
    Admiral Pilling. If your definition is RDT&E----
    Mr. Skeen. Are we talking about the same thing?
    Admiral Pilling. No, sir, we are talking about buying 
hardware with the $60 billion. RDT&E is not in there.
    Mr. Skeen. Is not in there.
    What do you propose in the budget there, or do you have a 
budget for that?
    Admiral Pilling. Well, we do. The Department of the Navy is 
somewhere around $7 or $8 billion this year.
    Mr. Skeen. On modernization?
    Admiral Pilling. On RDT&E.
    Mr. Skeen. Thank you, Mr. Chairman. I yield back.
    Mr. Young. Mr. Dicks.

                            CANNIBALIZATION

    Mr. Dicks. Thank you, Mr. Chairman. I understand our 
surveys and investigation staff has looked at cannibalization. 
The Air Force readiness problems have become steadily worse 
over the past 6 years with the percentage of aircraft reported 
as mission capable dropping each year. Shortages of personnel, 
lack of spare parts, and increased cannibalization are a way of 
life for some units.
    Gentlemen, what is the rate of cannibalization in your 
respective services?
    General Crouch. Sir, we are relying on repair parts supply 
and not cannibalization in the Army.
    Mr. Dicks. For your helicopters, you are not doing ``hangar 
queens''? You have enough spare parts so you don't have to do 
that?
    General Crouch. I am sure that there is movement of repair 
parts in certain units, but we are not relying on 
cannibalization to keep aircraft up.
    Mr. Dicks. Admiral.
    Admiral Pilling. We are sir. Since 1980, our 
cannibalization rates have been going down. We do it in terms 
of per 100 flight hours, how many cannibalizations. Last year 
we had a problem. In fiscal year 1996, our cannibalization rate 
was 8.3 cannibalizations per 100 flight hours.
    In 1997, we had a shortfall in the flying hour program and 
it went to 9.1. But thanks to the efforts of this Committee, we 
had a $322 million plus-up, and we have already seen that rate 
drop down to 8.8 so far in fiscal year 1998. So we did have a 
problem in 1997.
    Mr. Dicks. General.
    General Neal. We had a problem in 1997. We were about 8.2, 
sir. We are down to about 6.7 now.
    Mr. Murtha. Aircraft only?
    General Neal. That is aircraft, yes, sir. We watch it very 
closely, and we don't in fact attempt to go the cannibalization 
route unless it is really necessary to meet the readiness 
requirements.
    Mr. Dicks. General Eberhart?
    General Eberhart. Sir, as you know, our rate was tracking 
about 2.5 in the first part of this decade. Then it went up 
over 4 to about 4.5 about a year ago. This last quarter or the 
first quarter of this fiscal year, it is down to about 3.5. 
That is across our Air Force, and it considers some of the new 
systems we have and some of the airplanes that fly long 
sorties.
    As we look at some of our older systems, such as the F-15, 
we see cannibalization rates that are higher. In fact, I think 
the Chairman is very familiar with the deployment to Southwest 
Asia where we saw rates as high as 18.
    So we are trying to look at this, system by system, and not 
let the overall cannibalization rate give us a false sense of 
security. But with your help--and we have taken steps to add 
more money for spare parts in the 1999 budget to address this 
issue.
    Mr. Dicks. Is it a maintenance problem? Lack of funding? 
What drives this?
    General Eberhart. Sir, I believe for us it is a combination 
of two things. We cut some corners betting on the ``come'' 
that, through efficiencies, that we in fact would continue to 
have the same success that we had earlier in this decade. What 
was working against us was, the airplanes were getting older 
and the ops tempo. So, therefore, we bet on the ``come'' and it 
actually got worse.
    So we now know we can no longer fool ourselves, and we need 
to put more money there. Of course, the long-term solution is 
modernization.

                              SPARE PARTS

    Mr. Dicks. Now, there is a problem with spare parts, isn't 
that right, a lack of spares?
    General Eberhart. Yes, sir, there is.
    Mr. Dicks. And is it a problem in the supply system, depot 
maintenance, or is it the cost? I hear that the cost of spares 
is going up. Is that accurate? If that is accurate, can you 
tell us why you think it is?
    General Eberhart. Sir, first of all, to answer the first 
question, I believe, again it is a combination of things. It is 
older systems breaking more; therefore, our models, the way we 
forecast, how many spare parts we need, are not as good.
    We underfunded. We need to step up and put the right money 
against our spare parts.
    Now, whether or not the spare parts are getting more 
expensive, I think this varies from spare part to spare part. 
For those systems where we are drawing down the system or the 
vendors are drying up, I think the spare parts are in fact more 
expensive.
    But I don't know and I can't tell you. I will have to 
supply for the record, as we look across the board at the spare 
parts problem.
    Mr. Dicks. I would like each of you, for the record, to 
just give us a little summary of that.
    Thank you, Mr. Chairman.
    [The information follows:]

    Navy Answer. The primary cause for insufficient spares in FY97 was 
directly related to the underpricing of the Flying Hour Program. By 
underestimating the growing cost and demand of aviation depot 
repairables (AVDLRS), our Sailors were not provided sufficient OMN to 
order the necessary parts required to conduct all their maintenance. As 
a result aircraft mission capable and full mission capable rates were 
impacted.
    The FY98 Congressional plus-up, in addition to the funds we have 
added to our readiness accounts for FY99-03, will provide our 
maintainers the necessary funds to order parts and help improve the 
material condition of our aircraft.
    While the increasing cost of spare parts is a concern, we are 
working hard with industry to reduce the life cycle costs of our 
weapons systems with improved reliability. Although the individual cost 
of an improved part may increase, improved reliability means we do not 
have to replace it as often and the life cycle costs are reduced.
    Air Force Answer. The cost of repairable spare parts is going up. 
Using FY 94 as a baseline year, Air Force analysis shows that on 
average, the acquisition cost of all Air Force managed repairable parts 
increased 7.4% in FY 95, 6.1% in FY 96 and 7.9% in FY 97. As you can 
see, these cost increases are much higher than the inflation factors 
used in our budget submissions. There are several reasons this is 
happening. Because we are still flying older weapon systems, such as 
the B-52 and the A-10, we must buy or repair parts that are now 
obsolete, or find new vendors to replace those that have gone out of 
business, or modify the parts to newer configurations.

                            CANNIBALIZATION

    Mr. Young. I would like to ask just a quick question on 
this same subject.
    On the cannibalization, is there a procedure where, let's 
say, airplane A is in the hangar because it was cannibalized 
for parts, and then about 25 days into that cannibalization 
period, we cannibalized aircraft B to put the parts back into 
A, so it doesn't become an official hangar queen?
    Question number 2, General Eberhart, you and I have 
discussed this before, but some of your folks who are on the 
flight line have told me and members of this committee that 
some of the parts that they get from the depots don't work. I 
wonder if you would comment on both of those points.
    General Eberhart. Sir, first of all, Air Force-wide, we 
don't have in our Air Force Instructions a policy statement or 
a definition of a ``hangar queen.'' That is a management tool 
that has been used in Commands, it was used in command when I 
was a wing commander. In Air Combat Command, it is defined as 
an airplane that has not flown for 30 days, that is not in 
depot status.
    When you look at United States Air Force Europe, that is 30 
days. When you look at Pacific Air Force command, that is 50 
days. If you go to Air Mobility Command, they don't have a 
definition of ``hangar queen.''
    I personally believe--my philosophy is, this is a good 
management tool because we find, if we just keep cannibalizing 
an airplane and let it sit there for month after month after 
month, pretty soon it is not a very airworthy airplane and you 
essentially don't have anything that resembles an airplane any 
more, so you are fooling yourself.
    But sometimes you do in fact take a part of another 
airplane and put it on another airplane, when you need to get 
that airplane back in service, you need to start putting hours 
on the airplane as opposed to the other airplanes you are 
flying harder.
    The last question, the question I think that you ended 
with, and that is the quality of the parts coming from the 
depot, I can tell you that we are concerned about this as we 
look at the turbulence in our depots, for reasons that we could 
talk long and hard about. But as we track this, the only area 
where we see signs of quality that concern us is in the C-5 
engine.
    Everything else our gut tells us watch out, look out 
because of all this turbulence, you might have quality control 
problems. We don't have the data to support that yet.
    When we look at the parts that are returned to depot 
because they are unserviceable, we find that usually it is 
because there was a breakage that had nothing to do with what 
the depot did to that part or with that part. It had to do with 
shipment or how it was handled at the receiving end.
    But we are looking at that, sir. Our gut tells us that 
might happen, and we are worried about it.
    Mr. Young. Thank you.
    Mr. Hobson.

                        NATIONAL GUARD READINESS

    Mr. Hobson. Thank you, Mr. Chairman. I have three areas I 
would like to discuss and then one general comment.
    For the Army, General, the Army National Guard faces a $693 
million shortfall in your fiscal year 1999 budget. I understand 
the budget was prepared with the assumption that the Army 
National Guard force structure would be cut by 17,000 troops. 
Although the troop cut was avoided, the budget was never 
``fixed.'' The Active Army is at 79 percent, the Army Reserve 
is at 78 percent, but the Army Guard is only at 71 percent of 
required resources.
    It is my understanding that the budget needs the following: 
$156 million so Guardsmen can go to school and special 
training, $10 million for the Active Army Guard and Reserve 
program, $110 million for surface OPTEMPO, $98 million for more 
real property maintenance, and $94 million for depot 
maintenance.
    I guess my question is, how ready is the National Guard? Do 
these shortfalls thwart claims to redesign Guard divisions for 
combat support and combat service support missions; and I 
guess, why does the Army Guard get short shrift in what is 
supposed to be a total force concept?
    General Crouch. The number is $634 million. Now, let me 
translate it for a second to readiness.
    Following a first-to-fight commitment resourcing strategy, 
there are 15, as you know, enhanced brigades that are fully 
resourced in equipment and people. We have not been able to 
give them 100 percent of what they need, but they are in a 
quick deployment readiness band that we can get them ready 
quickly enough.
    We have taken risk in the later deploying National Guard 
units based on defense planning. I would like to have them 
higher, but based on our strategy at this point, we have funded 
them as best we can to be able to perform that mission.
    Can we use more? Yes, sir. And is this figure what I would 
ask for? Of course. And that would help the Guard raise that 
level of readiness.
    Mr. Hobson. Okay. I think it is a problem, and we have to 
look at the problem, because I think if we are going to make 
this a total force and use these forces, we have got to try to 
make sure they are ready to go. Because the Army always gets 
short shrift in the Guard, and then they are not ready to go; 
and then everybody says, they didn't do their job and what are 
we doing.
    Part of it is, I think we have to address some of these 
problems to make the Army, really truly, the Guard part of the 
total force.
    For the Air Force, the Air National Guard fares better than 
the Army with training program needs and how they are funded. 
However, there is a growing and pressing modernization gap that 
needs, I think, to be addressed--between $50 and $100 million 
in modernization upgrades to the F-16, F-15, A-10, KC-135 and 
C-130 fleets. Frankly, is the Guard keeping pace with the Air 
Force and can the Guard support its wartime mission?
    General Eberhart. Sir, I think it is important to note when 
you look at the Guard and Reserve, as we go through our 
corporate process of resource allocation, they are a full-up 
member of the team. They sit at a table just like this as we 
make our presentations, as we make our decisions, and we build 
that budget together.
    When you look at the quality of the forces, the quality of 
the training, if you look at the operational commitments--and 
that is really the key, because they are engaged and employed 
just like their active duty counterpart, so you can go to 
Turkey, you can go to Bosnia, you can go to Southwest Asia; and 
you will see Guard and Reserve fighter units there. You can go 
to the same theaters and see airlift and tanker units there. 
And unless you look at the airplane and know that that insignia 
came from a Guard or Reserve base or organization, you see no 
difference.
    So I believe that they are keeping pace. I don't think we 
are modernizing across the Air Force as fast as we would like 
to, or should, but we are not modernizing and leaving the Guard 
and Reserve behind. It is a total force modernization.
    Mr. Hobson. I want to see the Army--I am picking on the 
Army, but I am trying to help the Army. I hope you realize I am 
not picking on you.
    The Navy does a great job apparently of lobbying. Having 
Wright-Patterson Air Force Base in my district, I understand 
about that.
    I also do worry about the--and I will be pretty quick on 
this--but I do worry about the C-141s, our Reserve units. There 
are a lot of Reserves flying C-141s. They are an old airplane. 
They are going to be around for a little further, but I didn't 
see enough C-17s coming along fast enough, and I worry about a 
bridge.
    So you don't have to answer that now, but I am sure you 
people are looking at it. But sometimes it worries me that we 
are not looking at it.

                                TRICARE

    I have one medical question, and then I want to make one 
other comment. The military health services system is changing 
from a fee-for-service--and you can all answer this--health 
care, CHAMPUS, to a managed care system called TRICARE. TRICARE 
is now being provided in most of the regions of the country, 
including mine. It is just starting.
    This transition caused some anxiety and confusion among 
beneficiaries in all of the services. How satisfied are you 
with the medical care of the service? Do the troops like 
TRICARE? Do you get many complaints from the troops about 
medical care, and what types of complaints? What is your 
impression of the medical care programs for dependents?
    And what kind of feedback are you getting about the new 
dental plan? That is something else.
    General Crouch. TRICARE is still a very new program. One of 
the problems, as far as I am concerned, with TRICARE is that 
the system that we implemented is very, very complex, and it is 
extremely difficult for the trooper to understand, and it is 
extremely difficult for me.
    But for the trooper to understand how the system works and 
what the entitlements are, we need a little bit more 
experience, I think. In fact, we have not implemented it yet in 
the final region. That is yet to come. We need to get through 
that, and I think we should be able to gain a better feel for 
how this is going to work and gain some confidence in the 
system.
    It is too early to tell, as far as I am concerned 
particularly from the troopers' standpoint, how this is going 
to work. There is uncertainty.
    Admiral Pilling. Sir, we have not fully implemented TRICARE 
across the country, but in those regions where it has been 
implemented, we have done surveys to see whether the people 
liked it or not.
    What they most like about TRICARE were four things: access 
to care, customer services, low copayments and choice of 
providers. The biggest complaint: It is a very difficult system 
to understand.
    General Neal. Sir, about the same findings. It suffers from 
an image problem. As you know, it was originally approached 
starting up in the Northwest quadrant of the country and then 
has matriculated around. They expect to open up Norfolk-Camp 
Lejeune, one of our major bases, in May; and then the last 
region will be the Capital District region going up to the 
Northeast.
    The thing I found in my travels, basically to reinforce 
what my compatriots said, is the understanding of it, the 
complexity of it; the different systems under the TRICARE plan, 
which one is best for the individual.
    A second thing I would say, an observation, is that there 
is concern about the folks that are out there in recruit 
billets, I&I staff serving in Reserves, they may be away from 
the medical facilities that are not normally associated with a 
military environment. So trying to figure out what is the best 
system for them.
    A third problem is leadership itself, the folks from myself 
on down trying to understand it and articulate and educate our 
young folks as to what the best system is for them, a big-time 
problem.
    Fourth, a great constituent is the retired community. They 
are worried about it.
    Mr. Hobson. Tell me about it. I have a lot of them.
    General Neal. Any time you have to pay for something they 
rightfully view as a benefit, it brings prickly heat to the 
back of their necks--and to yours, I am sure.
    General Eberhart. Sir, what I would add is that, first of 
all, we as individuals are not very good with change, so in 
most cases people don't like change, and that is directly 
proportional to how long they have experienced the current 
system.
    That is where we get to the retirees. Of course, they are 
very comfortable coming to the base hospital and the system as 
it was. They are less comfortable obviously with a system they 
don't understand. And they have to pay money; maybe it doesn't 
involve the base hospital.
    Secondly, we are finding as we implement this around the 
country, in some areas, it doesn't fit very well because we 
have a hard time getting providers to sign up, so our people 
sign up for TRICARE, but we do not have enough providers sign 
up to provide the health care. So that is certainly 
complicating the issue.
    In some cases, we are our own worst enemy. When we have 
good leadership out there educating people and making sure the 
system works, it is more successful.
    Mr. Hobson. The only comment I will make is that somebody 
finally got the message on readiness on trucks. Mr. Murtha is 
not here now, but it doesn't look like we have to put them in. 
Somebody finally said, we have to have trucks.
    Mr. Young. Mr. Sabo.

                AIR NATIONAL GUARD AND AIR FORCE RESERVE

    Mr. Sabo. Does it make sense in the long term to continue 
to have both an Air Guard and Air Reserve? I have both units, 
and they both do their work well.
    General Eberhart. This is pretty dangerous territory here.
    Mr. Sabo. They do the same tasks and they share some 
facilities.
    General Eberhart. Sir, I think because of law, it does make 
sense, and that is because of the commitment to the governor of 
those militia forces.
    Mr. Sabo. I guess if one made a change, it would have to be 
the Air Guard, because of the commitments to the State.
    General Eberhart. The current system works, it is not 
broken, and it provides the governor with the capabilities our 
Founding Fathers had in mind.

            BALANCING PROCUREMENT AND NEW SYSTEM DEVELOPMENT

    Mr. Sabo. Regarding modernization and procurement, how do 
the services make sure that some of the basics, like Mr. 
Hobson's trucks, are in place versus money for new systems?
    General Crouch. Sir, let me start. That is the balance that 
I was speaking about earlier between near-term readiness and 
modernization--a tension that each department has to work its 
way through every single year. We have decided we have got to 
get enough into modernization so that we don't have a near-term 
readiness problem 10 or 15 years from now.
    But at the same time, we have to make sure that everything 
from repair parts to the condition of homes, from OPTEMPO to 
base support, is in the right kind of balance. That is not an 
easy task.
    Are we doing it at this point? We are able to, but because 
of this need to invest in modernization, we have taken away all 
the flexibility that our commanders have had in the past.
    General Neal. As you know, sir, we have an active truck 
replacement program going on right now.
    Mr. Sabo. I am not thinking of trucks in particular. I used 
that as an example.
    General Neal. But it is a critical element for us, because 
trucks are not section I, they don't have wings and they don't 
go fast, but they get the troops to the battlefield. And if we 
have old trucks, both our 5 tons and our HMMWs, and we have an 
active program to replace them and we have put a lot of money 
in it, that is part of our ground modernization program.
    So going back to the balancing act and looking across the 
spectrum both on the ground side and on the aviation side, we 
have to start replacing these older programs soon. The effort 
has already begun through this committee's help. And it takes 
too long, even as well as we have crafted it; and we will 
suffer with that because, as we have older equipment, as I 
mentioned earlier, it just takes longer to repair it. If it 
takes longer to repair it, it means more Marines that don't 
have the time or money to go out and train. So that goes in a 
circle and affects the quality of life.
    The modernization is critically important to--really our 
ability to meet the 21st century head on.
    Admiral Pilling. Sir, as I understand your question, you 
are asking us, how do we make the trades between upgrades to 
existing systems and buying new ones?
    Mr. Sabo. Yes, and the things we are not going to have a 
contract for.
    Admiral Pilling. Right. I think it is a balancing act. But, 
for example, in the F-18C and -D, we have no room for growth in 
that airplane. There is only one-third of a cubic foot left for 
growth in it. We have 17 cubic feet in the F-18E, -F, so you 
don't have a choice to upgrade -C and -D; you have to go to a 
new airplane to have future growth.
    The same thing happens, why we went to new submarine 
programs; we had no room for growth in the 688-I. We had no 
room for growth, so we had to grow.
    We need an industrial base that is going to be there if we 
have to surge. If we stop buying airplanes and ships and go the 
upgrade route, if we do have to surge because of a national 
security emergency, we might not be able to do it.
    Mr. Sabo. I am told there are a few minutes left, and I 
have to go vote.
    Mr. Young. I think you should vote.
    Mr. Sabo. This is the Bosnia vote, I assume?
    Mr. Young. This is the Bosnia vote.
    Mr. Sabo. I had another question, but I will pass.

                                 TRUCKS

    Mr. Young. I have been trying to get the exact number, but 
this Committee has increased the amount of investment in trucks 
in the last 3 years very substantially, and I am wondering if 
the problem is still that severe. If we had not done that, you 
probably would not have any trucks today that run.
    But the big question I have, has all the money we have 
appropriated over and above the President's budget for trucks, 
has that gotten down to the services, or has it been siphoned 
off for some other purpose?
    General Neal. From our perspective, sir, it has not been 
siphoned off. It is too critical a piece in our entire makeup 
for deployment for ground forces. And, as I had mentioned a 
moment ago, through this committee's good efforts and the plus-
ups that you have given us, our truck program is working. It is 
mostly just production and getting them out to the folks in the 
fleet. The same holds true for the HMMWV replacement, light-
weight tactical vehicle.
    Mr. Young. Mr. Nethercutt.

                          MEASURING READINESS

    Mr. Nethercutt. Thank you, Mr. Chairman.
    Welcome, gentlemen. I think the whole issue of readiness is 
obviously very important to what the military does, and I read 
your statements and noticed your commitment to readiness. I 
guess my question is, how do we accurately determine readiness? 
In other words, what standards do you have, what tools do you 
have to really accurately define or assess readiness?
    Secondly, how does the readiness of today compare with the 
readiness of 15 years ago, given the current state of affairs 
that we find in the world and the optempo that seems to be 
developing for our military?
    I was just in Bosnia with Mr. Bonilla and Chairman Young, 
and we are certainly impressed with our young people there and 
certainly the commanders that we met with. It is a little 
different mission than Iraq or Vietnam or other places that we 
have gone in the world.
    I wonder if you could, for the record here, tell us how you 
can accurately assess readiness. I know we all want to say, we 
are ready, but how do you really assess readiness? And second 
of all, how does it compare to prior readiness conditions?
    General Crouch. I think the best measure that we have right 
now is the monthly readiness report. However we have never been 
completely satisfied with the report. We have one that we 
believe by the end of this year, is going to be automated to 
the battalion level and objective enough in some of the 
measurement devices that it is going to give us an even better 
feel. But when I read what I get right now, it is measured in 
personnel logistics training and, most importantly, in the 
commander's comments, because he has a place in the report to 
tell us exactly what his concerns are.
    Buried in logistics, of course, are comments about funding, 
and he will also use that as an opportunity to address 
training. We receive the report from, for instance, the 10 
divisions, or the 15 National Guard Enhanced Brigades and all 
of the Army units, to tell us whether they are in a condition 1 
through 4 in any one of those areas, and then elaborates on it.
    Is it an infallible system, sir? Absolutely not. There are 
all kinds of room for interpretation.
    I have some real hope for this new system, because it is 
more objective than what we have right now. Does it give us a 
pretty good feel for readiness, however? I have worked with it 
long enough personally that I have confidence in it. I also 
know the commanders. I know the guys that are reporting, and I 
know the words that they are using, and I know what those words 
mean to me. Let me take the second part of your question. When 
you commit a unit to Bosnia or to that kind of operation, you 
are going to take a tank battalion that runs offensive and 
defensive operations and put them in a role of running convoys 
and checkpoints.
    In fact, a battalion conducting negotiations with three 
former warring factions and trying to keep them all on an even 
playing field is not doing intelligence preparation of the 
battlefield in a conventional sense, nor the preparation of a 
fire plan for a conventional operation to mass battalion fire 
on an objective.
    Your question is, does that erode the readiness of a combat 
division immediately? The units we commit to that, we have to 
train for those tasks. We are not going to commit a tanker, an 
artillery man, or infantryman to a task for which they are not 
trained. So we are going to train them on checkpoints, when and 
how to perform, and the kinds of mine fields you run into in 
Bosnia, which are vastly different than an antitank mine field 
we expect to run into in Southwest Asia.
    Conversely, however, if you are a helicopter repairman, you 
are going to repair the helicopter the same way in Bosnia as in 
Southwest Asia. So there is some trade-off, and it depends on 
the skills.
    But when we bring a unit out of a peace support operation 
like Bosnia, when I brought them back, it would take me about 
six months to retrain them.
    Now, I could crash, probably in about 45 days--that means 7 
days a week, near 24-hour days at a training center. But that 
wasn't the mission. These troopers have been separated from 
their families for a year. The idea was to balance training 
with weekends off, troopers going home at 5 o'clock in the 
afternoon, and making sure that we took care of the family 
piece at the same time we were trying to get our troopers 
retrained. Does it have an effect, absolutely.
    Admiral Pilling. Sir, we have a similar system to track, 
called SORTS. We have so many reporting systems, probably the 
fleet would prefer that they were reduced by about 50 percent. 
I won't go into details, but we track a lot of things on a 
daily, weekly and monthly basis. We even have a two-star 
admiral on the Navy staff who is in charge of tracking down 
anecdotes. If we hear about a problem, we go find out what 
happens.
    Compared to where we were years ago, our forward deployed 
forces are just as ready, if not better, today as they have 
been in the past. We do see things like cannibalizations going 
down as a function of time. The quality of people is good.
    If I had to make an overall comment, the one thing that 
makes us nervous is the nondeployed readiness. The forward 
deployed is very good, and we are always going to push to the 
point of the spear. But we see--as we come back from a 
deployment, we sort of go into what we call a ``bathtub.'' We 
degrade and then go back up. It looks like the depth of that 
bathtub is deeper and the climb out to the forward deployed 
readiness is steeper. We are nervous about that.
    General Neal. Basically, the Navy and the Marine Corps do 
it the same way, going forward deployed. Of course, the forces 
out there are as ready as we can make them 100 percent full 
mission capable in aviation, with 98 percent on the ground 
side, for the 11th that is deployed, as we speak, out in 
Southwest Asia.
    I think the same systems that we used 15 years ago are 
still being used today, there has been maybe a little 
refinement, but the same systems of measuring personnel, 
training, equipment and logistics, and then the commander's 
comments on what his assessment is to complete his mission.
    Fifteen years ago--I was a battalion commander at that 
time--I thought I was as ready as ready could be and that I 
could accomplish any mission the Marine Corps was going to give 
me. But, you know, I have been traveling around the Marine 
Corps these past 2 years, and I see the young men and women 
that we call Marines now, I see the type of training they are 
doing.
    I didn't really do--we used to do--we used to call it old 
NBC training. Now, for weapons of mass destruction, they are in 
mopp gear; they do a lot of their training clothed and they get 
out and they beat the bushes.
    Last week I was down at Camp Lejeune, and a young Marine 
was out there doing a mine-clearing operation for an FSSG 
organization, just out there practicing in full mopp gear. I 
grabbed the Marine to ask him some questions. It turned out to 
be a woman Marine. Now, I wouldn't have found that 15 years 
ago.
    But she was doing it. She had the best equipment we had at 
that particular time. She felt very comfortable operating in 
that environment. I don't think my battalion would have been as 
good 15 years ago.
    So to your question, it really hasn't changed much from our 
forward deployed units have always been ready. As they come 
back, it takes the units that are back in the garrison longer.
    Right now, we are finding it is taking them longer to get 
back up to step into a C-1 category only because we have aging 
equipment that takes longer to repair and stand up.
    General Eberhart. Sir, as you know, we report through SORTS 
like the other services do. Is it a perfect system? No. I think 
it is a system that we understand, and we understand its 
shortcomings and we are working to fix those.
    The thing I like about it is the reporting from the unit 
level. No one else has a vote. The unit commander writes down 
that report and send it up. So the wing commander, the numbered 
Air Force commander can't change anything, can't put a footnote 
on there; and that is looked at by the CINC that they report 
to, by the Service Chief and by the Chairman of the Joint 
Chiefs and by the Secretary of Defense.
    Now, he or she does have commander's judgment where they 
can change an upgrade or downgrade. Years ago, I hate to say, 
when I was commander, we almost always upgraded. But when you 
look out there, today at the changes for commander's judgment, 
about a half to two-thirds are upgrades, but there is another 
third of them that are downgrades, which says it is okay to 
call it how you feel in your gut. And there is no stigma 
attached.
    How do we go on and verify that? The first thing that 
happens when you go on a base for an operational readiness 
inspection, we check the reporting. That is important to us 
because we know then how to grade them. We have standards, but 
we want to make sure the reporting is correct. There is nothing 
worse than to be reporting you are this good, and when we knock 
on your door, you are not really that good. What if we did 
commit you to battle and you weren't prepared?
    How do we compare it to the past? I think if we look at the 
hollow force, we are nowhere near where we were in the hollow 
force. When we look at the late 1980s, our numbers were 
probably better, our numbers were probably better in terms of 
cannibalization rates and in terms of mission-capable rates.
    The irony is, we are more capable today for the reasons 
General Neal talked about. Our systems are more capable, and we 
hate to say it, we are proud of it, the people are better today 
and we take great pride in it.

                           COLD WEATHER GEAR

    General Neal. If I could have an alibi, sir, one thing I 
probably should have mentioned in thinking about it while Ed 
was talking, the equipment also. Just the simple equipment, 
like Gortex--and this committee helped immeasurably with 
outfitting the Marines with Gortex--if you have a Marine with 
equipment that keeps him dry in inclement weather, warm in cold 
weather, you have a happy Marine. You give him two meals--you 
don't have to give him three; you give him two, and save money 
on not giving him three, and you have a happy Marine. They make 
a difference, because nowadays they last longer. And this 
Gortex, I tell you, this is better than sliced bread.
    Mr. Nethercutt. Mr. Chairman, I am over my time. I want to 
say one thing.
    I think in looking at readiness, you can't ignore the 
employer of the Guardsmen or Guardswomen who are part of the 
force that represents you so well, and I think that that has to 
be carefully considered. I have been one who wants to get more 
incentives to the employer, so they can support the employee 
who wants to do his or her duty as a Guardsman.
    Thank you, Mr. Chairman. Thank you all.
    Mr. Young. General Neal, about those two meals for the 
Marines, General West has educated me on how you do the third 
meal each day, and it is sort of disgusting, but apparently it 
works. He tried to convince my sons about what it was that he 
ate when he couldn't get regular meals.
    Mr. Bonilla.

                        OPTEMPO AND DEPLOYMENTS

    Mr. Bonilla. Thank you, Mr. Chairman.
    First of all, I would just like to say it is nothing short 
of a miracle what you guys accomplish in this day and age with 
the cutbacks you have experienced over the last few years. I am 
very proud that we have been able to at least maintain the 
levels of readiness that we are at today. Hats off to you for 
keeping your chin up and trying to do the best you can under 
these circumstances. Please know that there are a lot of us on 
this subcommittee that are deeply concerned about some of the 
things we are talking about here today.
    I pulled a few facts out of your testimony, and these 
figures are incredible from every branch:
    Marines routinely working 12 to 16 hours per day, 6 to 7 
days a week to maintain aging equipment;
    Since 1986, the Air Force downsizing 40 percent while 
experiencing a fourfold increase in operational commitments;
    Ten Air Force specialties experienced deployments above the 
120-day mark in 1997;
    The Air Force is currently 200 pilots short;
    During the Cold War, the Army averaged one deployment every 
4 years; since 1989 it has averaged 14 every 4 years.
    I could go on and on.
    Again, I just wanted to say for the record that I don't 
know how you do it, and we are just proud of what you are 
accomplishing under the current circumstances.
    In General Eberhart's testimony, he states the high level 
of operations over the past several years is beginning to wear 
on both our people and systems and is stressing our current 
readiness.
    My question to you, General, and for the others here as 
well, is how long before the situation becomes absolutely 
critical? Or are we close to that already, are we there 
already?
    General Eberhart. Sir, I think that we have used this term 
for years, that we are on the ragged edge, we don't have any 
margin left. So to tell you when it is going to happen, I am 
not sure. I think that we are assisted by the help of this 
Committee, the adds that you have provided over the last 
several years. The fact we have moved about $1 billion from 
1998 to 1999 to fix those types of issues in the spares 
accounts, and repairables, because we realize we cannot 
continue to operate that way because this state of operations, 
these deployments, contingencies around the world, doesn't look 
like it is an aberration. It looks like it is here to stay.
    We have to go ahead and fund accordingly and organize 
accordingly.
    But I would never say that the bottom is going to fall out 
next year or the following year, and the reason I can't say 
that is because of those young men and women you saw on your 
most recent trip. Because they can make almost anything happen. 
Again, that is why it tears at your heart strings to be out 
there and talk to them and hear them say, sir, we can do it, 
but it is tough. It is getting tougher all the time.
    Mr. Bonilla. It does tear at your heart strings, General. 
Would anyone else like to comment on when the situation may 
become so critical that it is time it would actually shock the 
country, I guess, to find out what is going on?
    Admiral Pilling. I don't think we have a forecast of a year 
or any date certain, but one of the ways we think about it in 
the Navy is, there are sort of four pots of money: Readiness, 
you don't want to take money out of readiness; force structure, 
you just make the problem worse by taking money, because now 
the deployments have increased for those that are left; 
acquisition, that is your insurance policy for the future. The 
only other place to look is infrastructure.
    We have more infrastructure than we have military forces. 
If we can figure out some way to reduce infrastructure, we can 
put that money into the readiness, modernization and force 
structure accounts.
    General Crouch. Let me narrow this just to the personnel 
idea that you talked about two or three times as you made that 
comment.
    That is something that we are really concerned about in the 
types of deployments and the types of missions that we are 
taking on, the average of deployments every 4 years. There are 
a number of different ways you can figure it.
    We are concerned about it enough that we are at this point 
monitoring monthly every single battalion and the repetition in 
deployment of troops. We have all been concerned about how many 
times a trooper is going to Bosnia; or back to Congressman 
Nethercutt's concern about the employer, and how many times we 
are activating that trooper to take on one of those missions, 
and what happens to the job. How long can he go and how many 
times can that happen?
    So that is something that four or five years ago did not 
require the kind of monitoring that we are doing right now. But 
General Reimer and I look at that every single month, and we 
have reversed plans for a couple of units recently that looked 
like they were going to be activated to go on that kind of a 
back-to-back deployment.
    We have also implemented a new rotation policy that if you 
are gone for a month, you are home for a month. So it may be a 
six-month deployment, but you may not be touched for the same 
amount of time as an individual once you get back, once you 
return.
    Conversely, the mystifying part of it is, the troopers who 
are deployed, the troopers who are going on these missions, are 
the ones that are reenlisting at a high level, at 140 percent 
to be accurate, in U.S. Army Europe. They are deployed and 
gone, yet when you question them at the reenlistment, they are 
doing what it is they signed up to do.
    Where is the break point? I honestly don't know. Is it 
something we have to watch and we have got to put systems and 
guards in place? Yes, sir. It hasn't happened yet.
    General Neal. I think I can follow-up on that, sir.
    Retention is really good. We are already at 90 percent of 
filling our boat spaces for first-term reenlistments, and we 
are not even halfway through the year. Marines like to deploy. 
They like to feel like they are doing a real mission.
    I think what we have to be very conscious of all the time 
is making sure we talked about this balancing act of readiness, 
modernization and quality of life. The readiness piece, I don't 
think any one of them argues about. It is when they get back 
off of deployment, the long hours that it takes for them to get 
ready for the next event, whether it is a training evolution or 
whether it is another contingency, or whether it is in fact a 
deployment 18 months down the pike. So that is where we owe 
them.
    Our budget is on a fine line, and there is no discretionary 
money in those budgets nowadays. So even the supplemental 
which--the Marine Corps doesn't have a lot of dollars involved 
in the supplemental, but it has to be an emergency supplemental 
that doesn't require offsets, because that money--we are only 
talking $12 million for the contingencies, but that $12 
million, if I don't get that, then I have to take it from 
somewhere else; and ultimately what that means is the quality 
of life will suffer first, because I am going to put the money 
into the readiness account.
    Likewise, for the storm damage by El Nino, that is $30 
million. If I don't come up with that $30 million without 
offsets, then in fact that is going to be critical, and I am 
going to have to take it from somewhere else or not make the 
repairs that need to be done that in fact eventually affect 
readiness, because it affects morale, because I don't have the 
right quality of life for the troops.
    Mr. Bonilla. I come from an area where I deal directly or 
indirectly with about 7 installations. We are proud of support 
we give our military in south Texas, in San Antonio. But across 
this country, people take for granted what we have here in our 
backyards, tremendous prosperity.
    We don't have to look very far to see another culture, even 
in Mexico, which is just a few miles down the road from my 
home. That country is struggling, people wondering where they 
are going to get their next meal.
    You go to Bosnia and see the destruction, in other parts of 
the world there is bloodshed. In this country the greatest 
concern parents have on weekends sometimes is whether or not 
they can get all the Beanie Babies for their kids. But they 
don't understand how we got to this place in history because of 
the strength of our military.
    Unfortunately, until we have an acute situation out there 
where there is a crisis or a confrontation and people go, I 
thought we had a higher level of readiness, I thought we were 
capable, that we were at the level we were at during the 
Persian Gulf War, what happened?
    But politically, the country is focusing on so many 
domestic problems and whether or not the Federal Government is 
going to give them a child seat and child care in the 
afternoon, they are not concerned about the fundamental things 
that got us to where we are at this point in history.
    That is what concerns me, and that is what I kind of have 
been harping on quite a bit lately.

                      FORCE STRUCTURE REQUIREMENTS

    I have a question for the record, gentlemen. If you would 
be so kind as to submit what you feel would be the force levels 
required to meet this administration's numerous contingency 
operations and future procurement and training requirements for 
such an active force; in other words, to have the right number 
of people to do all these things we are doing, how many do we 
need?
    If you would provide that, I would appreciate it.
    [The information follows:]

    Navy Answer. The Quadrennial Defense Review (QDR) validated the 
requirement to maintain twelve aircraft Carrier Battle Groups (CVBGs) 
and twelve Amphibious Ready Groups (ARGs) in order to provide Navy's 
required core combat capabilities. The numbers of surface combatants, 
submarines, and other ships were accordingly adjusted commensurate with 
these core capabilities and are sufficient to meet our forward presence 
and combat requirements.
    Marine Corps Answer. The Marine Corps has marginally enough people 
to support the assigned commitments throughout the world. During the 
recent Quadrenniel Defense Review (QDR), the Marine Corps was 
determined to be an extremely lean fighting force. Having our 
endstrength further reduced, even slightly, cuts into our ability to 
support our current level of commitments. By looking at our current 
unit Deployment Tempo (DEPTEMPO) figures we can show you how close we 
are to breaching our deployment goals.
    Our deployment goals are as follows:
    (1) A turnaround ratio between major deployments of 2:1, with 3:1 
preferred.
    (2) 180 days or less of DEPTEMPO per 12 months when looked at over 
both a 12 month and a 36 month period.
    DEPTEMPO is defined as when a unit spends 10 or more days away from 
home station during a given period. Periods of less than 10 days are 
not tracked, nor are periods at home station greater than 10 days 
tracked.
    For example, during the last 12 months ending March 1998, 7 of 24 
Marine infantry battalions had DEPTEMPO greater than 180 days. All of 
these units were either deployed or preparing to deploy during this 
period. The remaining infantry battalion's DEPTEMPO varied depending on 
whether they had just returned from deployment or were preparing to 
deploy. This DEPTEMPO is currently sustainable, but any increased 
contingencies or decreased manpower will cause us to adjust our 
schedules to share the increased deployment load with all like units.
    Regarding procurement and training requirements, the Marine Corps 
requirement for procurement of equipment to support our ground units is 
approximately $1.2 billion per year and training requirements (formal 
schools and unit training) average $271 million per year.

                       JOINT TRAINING REDUCTIONS

    Mr. Bonilla. General Crouch, specifically, in your 
testimony you stated that reductions in joint training 
exercises and a reduction in the number of brigade task force 
rotations to the national training center are among the steps 
we have taken to reduce PERSTEMPO and improve personnel 
readiness. I am concerned that while these steps required to 
reduce PERSTEMPO that you are suggesting, how can these steps 
actually heighten readiness if we are doing less? Do you see 
the contradiction?
    General Crouch. Absolutely. If I may, our level of 
exercises have been increasing at such a rate that, when 
combined with deployments, sir, every commander can find a 
better way to train; and I have never seen a commander who 
didn't want another exercise added into his training program to 
make something better. Generally, that is true, but there is a 
limit.
    So when we combined all of the deployments to Bosnia, to 
Macedonia, to Partnership for Peace exercises, along with the 
requirements to take troops from the United States to fill 
shortages, both in the Pacific and in European Command areas--
and we have a continuing growth in exercises--we had finally 
had to say, stop.
    What is the right point, particularly from a personnel 
standpoint? We are not deploying our troopers more than about 
120 days a year, which is where we want to keep it.
    So if we go beyond that, then we are asking, why is there 
so much deployment and is there another good exercise that 
someone has come up with that is stretching a unit beyond the 
point which is rational?
    Mr. Bonilla. One more question, or am I out of time?
    Mr. Young. You have been out of time, but it is okay. Take 
one more question.
    Mr. Bonilla. I am not going to prolong it. If I have any 
more questions, I will provide them for you. I appreciate your 
time very much. Sorry about that, Mr. Chairman.
    Mr. Young. That is fine. The gentleman is already very 
patient with the rest of us. We appreciate that.
    Mr. Istook.
    Mr. Istook. Thank you, Mr. Chairman.
    Gentlemen, I appreciate the insights that you are providing 
us. Let me ask a couple of questions.
    I am interested, General Neal, if these other gentlemen are 
willing to put their people on two-a-day rations, or if that is 
just a function of the Marine Corps.
    General Crouch. No.
    General Eberhart. We didn't get any Gortex.

              CHANGES IN THE SIZE OF THE DEPLOYABLE FORCE

    Mr. Istook. If you had Gortex, would that be okay? 
Oftentimes, when we hear readiness discussed--you mentioned, 
Admiral, of course, the ``bathtub effect'' and the climb-out 
after deployment and becoming fully ready and the difference. 
You mentioned that the forces that are deployed are certainly 
in full readiness condition and fully capable.
    I often hear the total forces discussed in terms of, this 
is the number of people in the force structure, and we talk 
about how many are deployed. There is probably something you 
have that is basically defining who is deployable. Because they 
are not tied down to some pre-positioned spot or they are not 
required for something that is here within the continental 
U.S., but they are deployable, that if you had to deploy 
someone, they would be it.
    The real question is, what is the readiness and the numbers 
of those people when you compare them with what have been the 
historical numbers and the historical readiness of other 
people, rather than just talking about the level of preparation 
of those that are already deployed or the total number of 
people we have. That may be something you need to provide, for 
the record. I am very interested in knowing that delta, if you 
needed to make a commitment, who are they, how many are they, 
and what is their level of readiness?
    I would also appreciate your comments on--you mentioned 
certainly, General Neal, the difference in the level of 
capability of troops today compared to 15 years ago, and that 
is obviously a very significant factor. But I don't know if 
there may have been some historical changes in the definition 
of readiness or the different levels of readiness.
    I find sometimes in different agencies they are using the 
same term, but they have formally changed the definition over 
the years. I am interested to know if there have been any 
changes in what we define as ``readiness,'' so again we can 
measure that capability. I would appreciate it if you may be 
able to respond to those issues.
    General Crouch. If I could start with the second one, 
traditionally, I am sure there is a formal redefinition in the 
publication of Army Regulation 220-1 that covers readiness 
reporting and some differences as we have modified that 
requirement over time.
    Generally, however, the same categories are measured, 
generally the same comments are solicited, and generally in the 
same way we have dealt with it, as far as I am concerned, for 
probably the past 25 years.
    The one difference in the Army that has gradually taken 
place, particularly in the past three or four years, is the 
consideration of the quality of life of the trooper and his 
family as a part of readiness, which in the old days was not 
given much consideration.
    If, when we deploy a unit, the conditions that we leave a 
family in, or if the conditions of housing, transportation, 
family and trooper support on an installation are not adequate 
when he is coming back, or if we haven't properly prepared him 
for deployment, then that is a more intangible element of 
readiness.
    We have had difficulty trying to codify what I have just 
defined, but we recognize it now as a very, very important 
piece of readiness.
    Mr. Istook. That would be the major change, the recognition 
of that, even though you haven't been able to codify or 
quantify it.
    General Crouch. As clearly as we would like to--that is 
correct, sir--the deployable numbers, I think, and the way that 
is accounted for, because it can go every place from a prisoner 
is nondeployable to, at a certain stage of pregnancy, a soldier 
is nondeployable.
    What I need to do is get that for the record.
    [Clerk's note.--The Army did not provide a response for the 
record.]

                          MEASURING READINESS

    Mr. Istook. That is a way of measuring the capability of 
the troops, the response. Thank you.
    Admiral Pilling. Sir, we measure our force structure not in 
terms of people, but the ships and the battle force. Now, 
obviously, some of those are in long-term maintenance and are 
not deployable while in that maintenance.
    You should know on a quarterly basis, each of the services 
is required to identify--in the Navy, by the name and hull 
number of the ship, the number of the wing--whether we can meet 
our commitments if we had to make the theater wars within the 
time lines the warfighting CINCs set up for this. We have to do 
this quarterly. Given a day, if you had to do this, starting 
today, could you make it?
    With some exceptions, when we get 10 or 11 carriers there, 
they show up, C-1, C-2, which are the highest states of 
readiness, when we do this on a quarterly basis, if we see a 
problem, then that is what we are going to work on for the next 
3 to 6 months to try and correct that problem.
    So in terms of the deployable force, we can deploy the 
force levels in accordance with the time lines today that the 
CINCs set on us.
    On changes in definition of readiness in the Navy, I can 
only think of one that has been a significant change, and it 
had to do with a certain class of ships. To be C-1 or C-2, you 
had to have all of your torpedo tubes loaded at all times. It 
made no sense. We said, no, if you are within 24 hours of an 
ordnance depot to get those torpedoes, it would be okay.
    General Neal. Sir, we do the same as the Navy on units 
versus individual. Our measure of merit for readiness is unit 
readiness. Personnel, logistics, equipment and commanders' 
comments all apply. I think the real key is that our mission 
has not really changed in the past 15 or 20 years. We still see 
it as a go-to-war footing. We still see it as the central 
ingredient of two ingredients for the Marine Corps' challenges, 
making Marines and winning battles.
    So we see it as our responsibility by law and legislation 
by this Congress. We have to be the most ready when the nation 
is least ready. So time is not the determinant. Basically we 
take that as gospel, and we gear, we budget, we equip, and we 
train our young Marines to meet that requirement.
    I think that General Crouch made a very good point. One of 
the differences that I have seen over the past 15 or 20 years 
is an appreciation by the Marine Corps of the family, because 
really if you can deploy the Marines without the worry about 
their family that is left behind at Camp Lejeune, Camp 
Pendleton or wherever, if he can go out or she can go out with 
peace of mind that they are taken care of, then they are going 
to be that much more an effective fighting force.
    We have created organizations that are structured just for 
that purpose, from key volunteers to links to an infrastructure 
on each one of those bases so they can in fact deploy.
    When Desert Storm went down and actually led out with 
Desert Shield, there were a lot of forces that traditionally 
did not deploy as often as some of the forces that were 
resident in the two divisions here in the United States. But it 
was amazing that they were able to respond, and very quickly 
get up to step for deployment.
    Then finally I would say, on the total force, I think that 
is not just a catchy term as far as the Marine Corps and the 
other services are concerned. The total force makes sure that 
the Reserves are ready to go. Desert Shield, Desert Storm 
confirmed that. Fully 53 percent of our Reserve forces actually 
made it to Southwest Asia. Right now, fully 95 percent of our 
total force, our Reserve elements, are in major war plans for 
the CINCs. So it is across-the-spectrum within the Marine 
Corps.

           MODERNIZING AND INTEGRATING THE RESERVE COMPONENTS

    Mr. Istook. General, let me follow up on something you 
mentioned with regard to Reserve. I am interested in the 
capability of the Reserve forces to mesh with the Active Duty--
as you are going to things that involve more of the electronic 
battlefield, digitizing communications and the other things 
there.
    I would be interested in some comments about how is your 
upgrading, the sophistication of the Active Duty units, how 
that compounds the ability to use the Reserves in a force 
structure that makes the Reserves a more important element than 
ever with the downsizing.
    General Neal. Just following right along, where I talked 
about units, we measure readiness by unit rather than by 
individual. We have 10 combined arms exercises per year out at 
29 Palms; two of those are for the Reserves alone. But during 
the other 10, or the other 8, I should say, Reserve 
organizations, units, join up with their Active Duty brethren; 
and it is almost a seamless transition when you bring their 
units in with our units.
    We will have a Reserve company going down to Panama in 
about 1 month. They will take over an Active Duty mission for 
90 days.
    Right now, as I speak, in Norway, we have a combination of 
both Active and Reserve battalions in Norway doing a major NATO 
exercise in northern Norway.
    So the migration, or I should say the including together of 
the Reserve with the Active structure is seamless, it is almost 
transparent. There are some places where they fall behind in 
some of the improvements in equipment, but basically we know 
that, we identify it, we program for it, and we fix it as 
quickly as possible.
    General Eberhart. When we look at our force and report 
readiness, by the SORTS proces--we do it for every unit, 
whether it is forward deployed or in garrison, to include the 
total force, Air National Guard and Air Force Reserve--as we 
look out there across the force, we slice it a little 
differently. We look at supply squadrons, we look at medical 
squadrons, 95% of reported AF units are C-1 or C-2.
    But we don't want to let the figures mislead us. Then we 
cut it differently, so we know by fighter squadron, by airlift 
squadron or by missile squadron exactly what we are tracking in 
terms of the C-1 and C-2.
    So that is important to us because we know, and it has 
already been addressed, it is whether we are a Guard squadron 
or Reserve squadron or Active Duty squadron, we know we are 
committed to a CINC war plan, and we don't have months to get 
the squadron ready. Every unit that is C-3 or below, we track 
exactly why that unit is C-3 or below and what the projected 
get-well date is, and we measure that get-well date.
    Mr. Istook. Are they meeting the projections on the get-
well dates?
    General Eberhart. Most of them meet, about 75 percent of 
them meet that get-well date. If they don't, it is something 
beyond their control. But we do measure that. Every once in a 
while, we will look back 1 year and say, okay, who was C-3, -4, 
-5? What did they project and how did they do versus the 
projection to make them take a little more interest in making a 
commitment to that projection?
    As we look at standards, I would say, if anything, that 
standards have gotten tougher, once again, for these expanded 
missions. Because of the precision-guided munitions and other 
things, I think we have not lowered the bar; if anything, we 
have raised the bar.
    Mr. Istook. General Crouch, was there anything further 
regarding the integration of the Reserves and the equipment 
differences?
    General Crouch. In near-term, in deployed operations, as 
you know, we have had a heavy commitment from both Army Reserve 
and National Guard.
    As far as peace support operations, for instance in Bosnia, 
the entire civil affairs operation is provided by Army Reserve. 
The only way you can tell that a trooper is not Active duty is 
by knowing that there is a specific specialty that we only have 
in the Reserves, such as civil affairs. But military police, 
hundreds of other specialties it really doesn't make any 
difference. You can't tell between them. That is near-term.
    Sir, as you know, we are using our Army warfighting 
experimentation process to lead us to Force XXI. We focused 
that on the 4th Division at Fort Hood. As we make decisions on 
development, restructuring and so forth, it applies to the 
entire Army--Active, Reserve and National Guard.
    Now, the resourcing piece is based on first to fight; in 
other words, those units that will be first committed will, of 
course, get the first equipment with digitized information 
systems, data flow systems, weapons, and so forth. Our task is 
to make sure that we keep that synchronized throughout the 
entire force, both Active and Reserve--because not all of the 
Active Troopers will get it at the same time, nor will the 
Reserve. That can be done.
    Mr. Istook. Thank you, gentlemen. I appreciate it. For the 
record, I would appreciate getting further information and 
analysis on the get-well process. I think that would be very 
useful information when a unit has dipped below readiness, you 
project a date. It may be something that is beyond your ability 
to effect, but that doesn't mean it is beyond the ability of 
Congress to have an effect on why they might not be able to 
climb out or climb back into readiness as quickly as you have 
projected.
    I think that information would be very useful to us, Mr. 
Chairman, to know about this resiliency and what may be 
affecting it.
    Thank you, gentlemen.
    Thank you, Mr. Chairman.
    Mr. Young. Thank you, very much, gentlemen. We really 
appreciate your being here today. We all understand the 
important role the vice chiefs play in the overall security of 
the Nation, and we appreciate your frank responses to our 
questions.
    We hope that you will pass on, and I ask all my witnesses 
to pass on to your troops how much admiration and respect we 
have for all of them and the job that they do. It is really 
impressive, the things we learn when we get to visit with them 
on the job.
    We have some additional questions that we would like to 
submit to you in writing and ask for you to respond to.
    Admiral Pilling, you made the comment that we have more 
infrastructure than forces. I would like to have an opportunity 
to visit with you all again on that specific subject, because 
many, starting with Secretary Cohen and others in the chain of 
command, have made that very same case, and we would like to 
know more about that.
    Then I would like to say that all of you have great backup 
staff. In all of our hearings, your backup staff is super, and 
I understand that today will probably be the last time that Lt. 
Colonel Brian Kistner is in that capacity, since he is retiring 
and going to Alaska sometime this summer. We want to say how 
much we appreciated working with Brian and the good job he has 
done for the Air Force, General.
    If you all have some closing comments you would like to 
make, this is a good time, because we are going to adjourn the 
hearing until tomorrow.
    General Crouch. Sir, thank you very much.
    Mr. Young. Thank you very much. We appreciate it, and we 
are here to serve.
    The Committee is adjourned until 10 o'clock tomorrow 
morning when we will hear from Members of Congress and outside 
witnesses.
    [Clerk's note.--Questions submitted by Mr. Istook and the 
answers thereto follow:]

                        Non-Deployable Personnel

    Question. How many personnel and what type of personnel does your 
Service have that are categorized as ``non-deployable?'' Are they 
permanently ``non-deployable'' and if not, how long before they are 
deployable? What is your policy on returning ``non-deployable'' 
personnel to deployable status?
    Navy Answer. Occasionally, Sailors assigned to deployable units 
must be temporarily assigned to non-deployable units. The type of 
personnel vary as do the reasons for reassignment. Reasons include but 
are not limited to hardship and medical necessity. Less than 2% of our 
Sailors are considered non-deployable at any given time. Of those 
Sailors, nearly all (approximately 98%) return to a deployable status 
within one year or leave the service. The rest are permitted to 
continue on active duty, in a permanent non-deployable status, until 
separation or retirement.
    Marine Corps Answer. There are five primary reasons Marines are 
reported as non-deployable once they have obtained MOS proficiency and 
are assigned to a deployable unit of the operating force. While 
humanitarian reasons and Commanders Decision reasons are tracked, they 
are absorbed in the Administrative and Legal categories. At the end of 
FY97, the Marine Corps had the following number of non-deployables:

Medical........................................................... 4,213
Administrative.................................................... 1,794
Legal............................................................. 1,446
                                                                  ______
    Total......................................................... 7,453

    Headquarters Marine Corps does not collectively track the number of 
days until a Marine can be returned to a fully deployable status, if it 
can be determined at all. Legal and many of the Medical cases require 
an undetermined amount of time for resolution. We cannot predict the 
amount of time that might pass before AWOLs/Deserters, detained/missing 
will return. While pregnancy duration and maternity leave can be 
estimated, an exact date of full deployability cannot be easily 
discerned.
    Whenever possible and with the unit commander's recommendation, 
non-deployable Marines will be returned to a deployable status as soon 
as possible.
    For the medical PLD and TLD programs managed by HQMC, the goal is 
to get our sick/injured Marines fully fit for duty as quickly as 
possible, while assuring our disabled Marines (whose careers have been 
ended prematurely by a disability) receive the medical care and 
financial benefits they are entitled to. This mission is accomplished 
by utilizing periods of TLD to allow Marines who are not in a fully 
duty status the opportunity to recover and return to a fully duty 
status. Upon determination by a competent medical authority, a Marine 
who is determined to be fully fit for duty will be returned to a 
deployable status.
    Air Force Answer. Generally, on any given day, about 11.4 percent 
of Air Force personnel are non-deployable. Approximately 8.9 percent 
are temporarily non-deployable for administrative reasons (for example, 
students, transients, those awaiting processing for separation, 
retirement of discharge). These situations are quickly resolved (less 
than one year).
    About 2.5 percent are non-deployable for medical reasons. As of 
March 31, 1998, the following are reasons for personnel being 
unavailable to deploy:

                                                        Percent of Force
Reason
    Pregnancy.....................................................  1.10
    Assignment limitation code C \1\..............................  0.73
    Medical deferment \2\.........................................  0.41
    Medical board processing......................................  0.31
    Substance rehabilitation......................................  0.18
    Hospitalized or sick in quarters..............................  0.04

\1\ Assignment limitation code C is for personnel with significant 
medical conditions who are fit for duty and do not meet the criteria for 
medical separation or medical retirement. They are assignable to an 
overseas location or deployment on a case-by-case basis. Common 
conditions among members on code C are seizure disorders, diabetes, 
cardiac condition, asthma, cancer, HIV, and inflammatory bowel disease. 
These cases are reviewed when a significant change to a member's 
condition occurs or in one year--whichever comes first. Over half of the 
personnel on code C have more than 15 years of service and, although not 
deployable contribute because of their experience and technical 
expertise. The Air Force will soon implement a further stratification of 
members on code C by severity of illness. This is to increase the 
deployability of those whose condition is mild or moderate.
\2\ Medically deferred individuals are those who have an injury or 
illness limiting duty for an extended period, but who expect to make a 
full recovery in less than 1 year.

    Question. What impact do these people have on readiness and 
PERSTEMPO?
    Navy Answer. The unanticipated loss of a Sailor could potentially 
affect the readiness of a deployable unit if a critical rating was 
impacted. However, this would only be temporary since a replacement 
would be immediately identified and detailed to fill the emergent 
requirement.
    Since the Navy's PERSTEMPO program is based upon the length of time 
a unit spends away from home, the unanticipated loss of a sailor will 
not impact PERSTEMPO.
    Marine Corps Answer. Although this has not been a major problem for 
the Marine Corps, non-deployables lower the readiness ratings of units 
and the Marine Corps overall. Non-deployables are subtracted from 
unit's Status of Resources and Training System (SORTS) reports since 
they will not be available to go to war with the unit. In addition to 
the readiness reports, we also consider the effects of non-deployables 
throughout the Corps. The Marine Corps is limited in its total end 
strength, so non-deployable Marines take away from the number of fully 
qualified Marines we are allowed to possess. This in turn, increases 
the work load of those fully qualified, deployable Marines.
    The Marine Corps does not measure PERSTEMPO, it measures Deployment 
Tempo (DEPTEMPO) because it deploys as it trains and fights--as units, 
not as individuals. That said, we can still make inferences on 
PERSTEMPO. Because non-deployables are not immediately discharged, 
deployments made by personnel of the same Military Occupational 
Specialty (MOS) type must be absorbed by those Marines still 
deployable. In a few specialty high demand technical MOSs, this could 
potentially create an individual tempo problem. However, we rely on our 
unit commanders to ensure their personnel are not being overdeployed, 
and to report problems up the chain of command in order to provide 
relief for those Marines.
    Air Force Answer. Generally speaking, based on the number and types 
of non-deployable people involved (e.g., patients, prisoners, trainees, 
and transients), the impact to overall Air Force readiness is small. 
The principal result would be a reduction in the available pool and, 
therefore, a small increase in the overall PERSTEMPO for the deployable 
force.

                          Readiness Definition

    Question. What is your definition of readiness? Have there been any 
changes to regulations in defining readiness? Please provide copies of 
those regulations.
    Navy Answer. The Joint Staff defines readiness as the ability of 
forces, units, weapon systems or equipment to deliver the outputs for 
which they were designed. Said another way, readiness is a function of 
capability (having the proper equipment) and ability (being able to use 
that equipment to fight and win wars).
    Well-trained people, operating modern, well-maintained equipment in 
the right numbers, constantly patrolling the world's trouble spots, are 
the trademarks of your Navy and being able to meet all commitments 
throughout the full range of the National Military Strategy has always 
been our foundation for assessing readiness.
    Marine Corps Answer. Generally, readiness is defined by the Marine 
Corps as a unit's ability to meet its wartime missions and taskings.
    Readiness is also defined as different things at different levels:
    --At the unit or tactical level (battalion and squadron level for 
the Marine Corps), readiness is defined as the ability to provide 
capabilities required by the Marine Expeditionary Forces (MEFs) and 
Marine Forces Atlantic (MARFORLANT)/Marine Forces Pacific (MARFORPAC) 
in support of CINC requirements to execute assigned missions.
    --At the Service and Joint Staff level it is defined as the CINCs 
or components ability to synchronize ready combat and support forces to 
execute assigned missions.
    Have there been any changes to regulations in defining readiness?
    There have been no major changes to the definition of readiness by 
the Marine Corps. The Joint Staff has developed additional definitions 
of readiness that further apply it to the Joint environment, especially 
in regard to the CINCs and Combat Support Areas (CSAs).
    Air Force Answer. The standard definition of readiness is provided 
in CJCS Guide 3401A, published on 31 July 1997 (superseded CJCS Guide 
3401, dated 1 Oct 95) as follows:
    ``The readiness of US military forces to fight and meet the demands 
of the National Military Strategy is the synthesis of two distinct but 
interrelated levels of readiness:
    Unit Readiness: The ability to provide capabilities required by the 
CINCs to execute their assigned missions. This is derived from the 
ability of each unit to deliver the outputs for which it was designed.
    Joint Readiness: The CINC's ability to integrate and synchronize 
ready combat and support forces to execute assigned missions.''
    The Air Force agrees with these definitions. A copy of CJCS Guide 
3401 is attached.

              [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]



    [Clerk's note.--End of questions submitted by Mr. Istook. 
Questions submitted by Mr. Young and the answers thereto 
follow:]

                    Overall Readiness of U.S. Forces

    Question. In previous year's hearings witnesses before this 
Committee have cautioned that readiness is ``fragile'' and ``on the 
edge.'' Recent press accounts, and data developed by the Surveys and 
Investigations staff indicates that there is evidence of readiness 
problems in the U.S. armed forces. The S&I staff notes that within the 
bands of readiness reported under the Status of Readiness and Training 
System (SORTS), many field commanders feel that they are presently on 
the low end of that category. Generally, how would you characterize the 
readiness levels of the Active duty enlisted forces? Are they staying 
proficient for their warfighting mission? Are the enlisted forces 
suffering readiness problems because personnel, dollars, and other 
resources are being diverted to peacekeeping missions such as the open-
ended operations in Bosnia and Southwest Asia?
    Army Answer. There has been no major change in the overall level of 
readiness within the Army. While the Army is smaller, it is not less 
combat ready than five or six years ago. Those forces needed to fulfill 
the Army's role in national defense can do so as required by the 
warfighting Commanders-in-Chief.
    The requirement to train for and perform peace operations and 
contingency operations does degrade warfighting Mission Essential Task 
List (METL) skills of combat and combat support units. Combat service 
support (CSS) units suffer far less readiness degradation because peace 
operations tasks closely relate to those CSS units' wartime METL tasks. 
The cross leveling requirement is especially demanding on non-deploying 
units, which must provide leaders and CSS soldiers to deploying units. 
However, a temporary decrease in readiness within selected units is an 
unavoidable price for the Army's execution of our Nation's policy of 
engagement. Furthermore, the Army has taken great steps to minimize 
readiness degradation due to peace and contingency operations through 
deployable training packages, distance learning initiatives, 
simulations, and other training related initiatives.
    Navy Answer. Today, Navy's readiness is adequate to meet all 
operational commitments. On any given day, approximately 30% of our 
forces are deployed around the world and ready for combat if necessary. 
The remainder are home or operating near CONUS in various stages of 
readiness as they prepare for their next deployment.
    Marine Corps Answer. The Marine Corps' forward deployed and forward 
based ``first to fight'' unit readiness remains high. To sustain these 
forces, however, units at home base who have just returned from 
deployment are experiencing longer, and in some cases deeper, troughs 
of degraded readiness. Aging equipment is our primary readiness 
concern. Aging equipment means increased maintenance time, effort and 
expenses. Spare parts costs are continuing to increase, further 
draining our operations and maintenance (O&M) funding needed to sustain 
us. As the Marine Corps maintains current readiness first, even to the 
detriment of training, quality of life (QOL), maintenance of real 
property (MRP), and modernization, we endanger our long term readiness.
    Funding of unprogrammed contingency and disaster expenditures, such 
as those reported to Congress (reimbursement of which was requested in 
the emergency supplemental funding bill) is required in order to 
maintain the balance of current readiness with training, QOL, MRP and 
modernization.
    Air Force Answer. Today, measured against the JCS reporting 
criteria, your Air Force is ready to execute its responsibility within 
the National Military Strategy; however, high TEMPO, aging aircraft, 
deteriorating infrastructure, and thinly-spread forces are putting a 
considerable strain on our airmen, both deployed and at home, and their 
ability to maintain our force in a high state of readiness.
    Question. What is the trend in the overall readiness of U.S. 
forces? Illustrate with examples.
    Army Answer. While the Army is smaller, on an individual unit basis 
the Army is no less combat ready than five or six years ago. However, 
due to the occurrence of a recruiting shortfall in certain specialties 
(particularly infantry), coupled with a temporary strength shortfall 
that had been deliberately programmed in order to take care of our 
force during the Army's downsizing, some units have experienced spot 
personnel shortages. This situation was more pronounced during the 
latter half of 1997. The recruiting issue has been corrected and the 
programmed temporary strength shortfall is getting better. We do not 
anticipate that personnel shortages will be a problem for the Army in 
1998. We have achieved considerable success in bringing force structure 
and end strength into greater balance. Consequently, the latest Unit 
Status Reports indicated that unit-manning levels are getting 
measurably better. Funding concerns have replaced manning as the number 
one issue for commanders in the field. This is not unexpected and 
reflects the delicate balancing act we are orchestrating at the 
Headquarters, Department of the Army, level.
    Navy Answer. Navy's overall readiness trend continues to be 
satisfactory. Deployed readiness remains high, but because of our 
cyclical readiness posture, we expect non-deployed readiness to be at a 
lower level of readiness. This is a direct result of units entering the 
Inter Deployment Training Cycle (IDTC), where ships and aircraft 
undergo maintenance and warfighting skills and proficiencies migrate to 
a basic level due to crew turnover and a lack of opportunity to train 
while in maintenance periods. We have found that this cyclical posture 
makes the most efficient and effective use of constrained resources. 
However, this efficiency means that funding shortfalls, when they 
occur, have a greater and more rapid impact today than in the past.
    For example, last year, flying hours were underpriced and there was 
a shortfall in our aviation readiness account. This shortfall had a 
significant effect on the material condition of non-deployed aircraft 
during the six month period prior to deployment and was the predominant 
cause of a decline in deployed aircraft Mission Capable (MC) and Full 
Mission Capable (FMC) rates. The FY98 Congressional plus-up, in 
addition to the funds added to our readiness accounts for FY99-03, will 
facilitate the procurement of additional resources to enhance 
readiness. Specifically, it will allow our maintainers to order the 
necessary parts and perform the essential repairs needed to improve the 
material condition of our ships and aircraft. We have already observed 
improvement in MC and FMC rates and are optimistic these trends will 
continue.
    Marine Corps Answer. The Marine Corps overall trend remains high in 
our forward deployed, first-to-fight units although the readiness 
trough is getting wider and deeper for those units that have just 
returned from deployment. The USMC maintains a cyclical approach to 
readiness, with ``first-to-fight'' units in high readiness and units 
having just returned dropping to lower levels when necessitated by 
funding constraints. Some examples are:
    Forward deployed unit: The 11th MEU (SOC), embarked aboard the 
Tarawa ARG in the Northern Arabian Gulf has a ground equipment 
readiness rate of 99.1 percent, and an aviation mission capable rate of 
100 percent, where a forward deployed unit should be.
    Just returned unit: Infantry Bn--1st Battalion, 5th Marines 
returned from deployment in November 1997, immediately lost many 
personnel to schools, enlistments expiring and reassignment, and have 
yet to receive replacements for all of their losses. As a result, they 
have neither the personnel required to maintain all of their equipment 
at a high level, nor the replacement parts or repair priorities to do 
so. They will return to higher levels 3-6 months prior to deployment.
    Air Force Answer. Today, we are capable of meeting our wartime 
taskings; however, the overall trend in readiness is decreasing 
slightly--the total number of major operational units reporting C1/C2 
has declined 10 percent in the last 18 months. Some of this decline is 
due to high levels of TEMPO over an extended period. The effects of 
extended high TEMPO are seen as negative indications in several 
reporting areas. It is taking a greater effort to maintain this desired 
level of readiness. Retention rates for pilots, navigators, and several 
critical enlisted skill areas are all declining below our goals. 
Overall aircraft mission capable rates have declined nearly nine 
percent since the end of DESERT STORM.
    The reasons for these changes are, as you know, diverse and 
complex--high TEMPO, airline hiring, budget cuts, strong economy, and 
perceptions about future benefits, promotions, etc. We will continue to 
work these issues hard and appreciate the full support of Congress in 
our modernization, readiness, and quality of life initiatives to 
reverse adverse trends.
    Question. The Committee has been advised that an additional 
$1,000,000,000 has been added to the Operation and Maintenance accounts 
to shore up readiness. What is the share of this funding that each 
service has received? What are the specific purposes of this added 
readiness funding?
    Army Answer. The Army added $64,000,000 to its Operation and 
Maintenance, Army, readiness accounts in fiscal year 1999. The majority 
of this increased depot maintenance funding occurred in the aircraft, 
missiles, and other (communications-electronics, ships, small arms, and 
other categories) commodities. Some of the increase was applied to high 
priority systems, such as the AH64 Helicopter, the M1 series of tanks, 
and the Patriot missile system.
    Navy Answer. Readiness continues to be our primary focus with 
flying hour and ship operations programs funded to meet Primary Mission 
Readiness (PMR) and OPTEMPO goals, while maintaining manageable levels 
of airframe, aircraft engine and ship maintenance backlogs. 
Accordingly, the FY1998/FY1999 Biennial budget for Flying Hours and 
Ship Mission operations were increased about $400 million. These 
increases were offset somewhat by reduction to air and ship depot 
maintenance accounts consistent with Quadrennial Defense Review 
decisions. These adjustments essentially parallel FY 1998 Congressional 
action.
    Air Force Answer. The FY99 budget submission continues to focus on 
near-term readiness by increasing funding for spares and depot 
maintenance. Specifically, the FY99 Air Force budget includes an 
additional $425 million for those purposes.

                      Moral of Deployed Personnel

    Question. Gentlemen, as you are aware, the Department recently sent 
a $2,000,000,000 fiscal year 1998 supplemental request to Congress to 
cover the costs of ongoing operations for Bosnia and Southwest Asia. 
What is the state of morale of the troops presently deployed for either 
Bosnia or the Southwest Asia operations?
    Army Answer. I believe morale is surprisingly good when soldiers go 
on real world deployments. As I noted in my testimony, soldiers in 
Europe, who are bearing the major burden of the deployment to Bosnia, 
tend to reenlist at rates higher than the Army average. They feel that 
they are doing what they came into the Army to do, and that gives them 
a sense of accomplishment.
    Navy Answer. Morale is high. There are some concerns over high 
deployment rates, but in general we are meeting the guidelines of 
Navy's PERSTEMPO Program (six month deployments, 2.0:1 TAR and no 
greater than 50% away from homeport in a five year period).
    Air Force Answer. The strong moral in Bosnia is linked to the Air 
Force members' belief that they are contributing to peace in Bosnia and 
is bolstered by improved quality of life for deployed members and their 
families back home. Effective quality of life programs are an essential 
element in retaining our people and increasing our readiness. In 
Bosnia, we have seen across-the-board improvements in the troops' 
morale through enhancements in billeting, libraries, recreation 
opportunities, and fitness programs. We have also instituted morale 
phones, and installed video tele-conferencing and computer capability 
for calls and e-mail home.
    Southwest Asia brings different challenges to deployed troops. Long 
absences from families and tent city living are starting to take a 
toll. To meet these challenges, we have established at Prince Sultan 
Air Base, Saudi Arabia, a large morale, welfare and recreation program, 
including: a video/movie check-out center; moral phones; video tele-
conferencing and e-mail capabilities; concerts; and three recreational 
centers offering a basketball court, weight and exercise equipment, and 
aerobics classes. Over the past year, we have further improved the site 
with above ground swimming pools, a theater, a library and an amusement 
machine arcade. Housing improvements are also underway. The Prince 
Sultan Air Base housing complex is nearly complete with an estimated 
occupancy date of July 1998.
    Question. How have these deployments and any future rotations 
affected the troops personnel tempo, and their quality of life at home, 
and your reenlistment rates?
    Army Answer. In fiscal year 1997, the average time deployed for 
those soldiers deploying on temporary duty/temporary change of station 
orders was 125 days. This represents a decrease from the 196 average 
days deployed in fiscal year 1996. The primary reasons for the 
reduction were decreased deployment lengths and a reduction in the 
number of soldiers in Bosnia in fiscal year 1997. To date, personnel 
tempo has not impacted retention. Army statistics indicate that in 
frequently deployed units, soldiers are reenlisting at rates above the 
Army average. Soldiers in units deployed to Bosnia have reenlisted at 
rates that exceeded the Army average. On the other hand, Army surveys 
from 1994 to 1997 indicate the more time soldiers spend away from their 
duty station, the less likely they are to be satisfied with the 
``amount of time a soldier is separated from family.'' For those 
leaving or are thinking of leaving the Army, a major reason for leaving 
(8-10 percent) is the ``amount of time a soldier is separated from 
family,'' but the amount of time away from the duty station has little 
relationship with Army career intentions (leaving, staying in beyond 
present obligation, or staying in until retirement).
    Navy Answer. Navy is committed to providing the best possible 
quality of life for our Sailors, both at sea and at home. Although we 
do not have any statistics or specific, demonstrable evidence that 
current operations/deployments have affected quality of life at home 
for our personnel, we are very much aware of the links between OPTEMPO, 
PERSTEMPO and Quality of Life, and carefully watch to ensure that the 
Fleet Units remain within our established standards. Deployments are a 
normal part of any Sailor's sea duty experience, and we appreciate the 
family separations and personal sacrifices that go along with this. 
Consequently, we take great effort to care for Sailors and their 
families before, during, and after these deployments. In fact, the 
Navy's Deployment Support Program (which includes pre-deployment 
briefings to families, continuing support during deployment, and the 
Return and Reunion Program) is one of the most popular and well-
received Quality of Life programs we provide. We know, both from 
experience and responses to personnel surveys, that Quality of Life 
programs are an important factor for Fleet readiness. To this end, we 
try to offer a wide range of support programs to service members and 
their families.
    Air Force Answer. It is hard to isolate the effects of deployments 
to Bosnia and Southwest Asia from those of other deployments and 
temporary duty assignments (TDY). These deployments have contributed to 
increased TDY rates for some airmen because over the past nine years we 
have decreased the number of military personnel by 36 percent while 
supporting four times as many deployments--on any given day in FY97 
16,400 airmen were deployed and approximately 20,000 are deployed 
today.
    To reduce tempo, we have reduced time in JCS exercises by 15 
percent, initiated post-deployment stand downs and reduced aircraft 
rotations in Air Combat Command from 90 to 45 days. We also plan to 
reduce Operational Readiness Inspections (ORIs) by 10 percent in FY98 
and by 30 percent in FY99 through inspection credit during real-world 
deployments. Quality Air Force Assessments were also terminated in 
FY98.
    Like other deployments, deployments to Bosnia and Southwest Asia 
create quality of life stressors for our airmen. Recently, Air Force 
leadership revalidated our seven Quality of Life priorities to help our 
troops--pursue fair and competitive compensation and benefits; balance 
the impact of high tempo; provide access to quality health care; 
provide access to safe, adequate and affordable housing; preserve a 
stable retirement system and benefits; enhance community support; and 
expand educational opportunities. In addition, we added Readiness NCOs 
to Family Support Centers at bases to help families of deployed members 
and installed Video Links to improve communications between deployed 
members and their families.
    As far as the impact these deployments are having on reenlistment 
rates, interestingly, reenlistment rates do not tend to decline for 
individuals with a high number of days TDY. A review of FY97 TDY data 
revealed no significant decline in reenlistment or retention data for 
those specialities that went TDY. Although this data is encouraging, we 
should be careful to not draw long-term implications. It is reasonable 
to expect that if TDY days remained high for multiple years, 
reenlistment rates would show some decline.

      Contingency Operations' Effect on Long-Term U.S. Commitments

    Question. In your opinion, do you feel we can continue to sustain 
the U.S. commitments around the world given the continuous deployments 
to the Persian Gulf and now the extended deployment to Bosnia?
    Navy Answer. Yes. The Navy is supporting these commitments with 
regularly scheduled forward-deploying forces. In the short term, this 
will not affect readiness. However, unfunded contingencies result in 
funds being diverted from non-deployed forces. This negatively impacts 
the balance of current readiness across the force by delaying equipment 
repairs and disrupting training. In the long term, these commitments 
can be maintained but will present the Navy with some challenges. If 
two carriers remain a requirement in the Gulf, a condensed Inter-
Deployment Training Cycle (IDTC) will be required and some work, 
scheduled to be accomplished during upcoming ship and aircraft 
maintenance availabilities, will be deferred.
    Air Force Answer. The Air Force can continue to sustain taskings in 
support of U.S. commitments around the world, including deployments to 
the Persian Gulf and Bosnia, but there is a cost.
    For the past seven and one half years, our airmen have been 
deployed at a rate unprecedented in our peacetime history. By 1 June 
98, we expect 13 of 27 Air Force flying units deployed in support of 
SOUTHERN WATCH to exceed our maximum desired average TDY rate of 120 
days away form home station per year. We also anticipate that current 
contingency taskings will continue near their present rate for quite 
some time.
    The effects of extended high TEMPO are revealed by negative 
readiness indications in several areas, leading us to the conclusion 
that it is taking greater effort to maintain desired readiness. 
Retention rates for pilots, navigators, and several critical enlisted 
skill areas are all declining below desired levels. Overall aircraft 
mission capable rates have declined nearly nine percent since the end 
of DESERT STORM.
    Normal work stress becomes acute across the force when the deployed 
mission includes the need to rotate units, time and again, over an 
extended period. As a result, we are looking seriously at ways to 
restructure ourselves to better support these enduring rotational 
taskings in order to mitigate the effects on our people.

                Effect of No Supplemental Appropriations

    Question. The Service Chiefs have provided the Congress with 
letters detailing some of the impacts to training and near term 
readiness if the Supplemental request is not approved in a timely 
fashion, or if the Supplemental has to be offset within the Department. 
Can you provide us with some specific examples of impacts to the 
enlisted forces if combat training, home station training, depot level 
maintenance, real property maintenance, and other quality of life funds 
are not restored?
    Navy Answer. Unfunded contingencies result in funds being diverted 
from non-deployed forces. This means that our non-deployed forces don't 
have the funds to order parts or perform scheduled maintenance. As a 
consequence, maintenance is delayed until the last possible minute, 
training is disrupted and the readiness of our non-deployed units is 
degraded. Deferring maintenance and training requirements to the last 
minute before the ships and aircraft deploy means our Sailors will have 
to work harder and longer in a condensed period of time to ensure they 
are combat ready for deployment. Such actions seriously impact and 
degrade the quality of life of our Sailors and their families.
    Air Force Answer. The supplemental request was approved and signed 
into law on 1 May 1998. Had the supplemental not been approved in a 
timely fashion, or if the Air Force had been required to offset it 
internally, there would have been a direct and immediate impact on 
training and near-term readiness. Specifically, we would have been 
forced to defer programmed depot maintenance, terminate non-contingency 
aircrew training, postpone quality of life initiatives, terminate 
various real property maintenance contracts, and begin civilian 
furlough actions. The impacts of such actions would have included 
grounding of aircraft through the end of the fiscal year, deferral of 
programmed aircraft modifications, a rapid decline in proficiency and 
readiness, loss of special combat capabilities, increased risks to 
health and safety, and a reduction in quality of life across the board.

     Contingency Operations' Effect on Non-Deployed Unit Readiness

    Question. Explain how those units in your service, who are not 
deploying to Bosnia, the Persian Gulf, or other operations, have been 
affected by the shortage of funds. For instance, are funds available to 
buy spare parts to keep squadrons flying, etc?
    Army Answer. In executing the National Military Strategy the 
``shaping'' and ``preparing'' pillars are funded in the President's 
budget, but actual operations, such as Bosnia and Southwest Asia, are 
not funded in advance, often relying on Congressional action. 
Therefore, commanders are forced to migrate funds from training 
accounts to pay for contingency costs as they occur until Congress 
provides supplemental funding. Additionally, there is a readiness bill 
associated with all small-scale contingency deployments. When we deploy 
an Army unit to a potentially hostile environment where its performance 
could dramatically effect national policy and prestige, that unit is 
provided all of the training, personnel, and equipment resources needed 
to maximize its chance of success. It is brought to the highest 
standard of readiness which time and resources allow. The bill payers 
are the non-deploying units, with personnel and equipment from non-
deploying units being provided as augmentations to deploying units. 
This readiness bill is the price we pay for accomplishing our Nation's 
policy of shaping the international security environment in ways 
favorable to U.S. interests, yet doing so within a constrained budget.
    Air Force Answer. The current ongoing deployments to Bosnia and the 
Persian Gulf have not inhibited our overall ability to support the 
National Military Strategy of the United States. Those units remaining 
stateside are still capable of successfully performing their assigned 
missions; however, had we not received timely passage of the 
supplemental request, these units would have experienced impacts to a 
wide range of areas, including proficiency training and base support 
activities. Funding to support direct readiness requirements, including 
spare parts, remains a top priority at all levels of the Air Force. 
Without the supplemental request, the Air Force would have been 
required to offset it internally, with resultant impacts on non-
deployed units. Specifically, we would have been forced to defer 
programmed depot maintenance, terminate non-contingency aircrew 
training, postpone quality of life initiatives, terminate various real 
property maintenance contracts, and begin civilian furlough actions. 
The impacts of such actions would have included grounding of aircraft 
through the end of the fiscal year, deferral of programmed aircraft 
modifications, a rapid decline in proficiency and readiness, loss of 
special combat capabilities, increased risks to health and safety, and 
a reduction in quality of life across the board.

               Air Force Deployments and Force Structure

    Question. The Air Force has developed a concept for deployment 
called the Air Expeditionary Force (AEF). The personnel, support 
equipment and aircraft needed to field an AEF are drawn from various 
CONUS based units. Two AEFs are currently deployed in support of U.S. 
operations in Southwest Asia. These AEFs plus other assets deployed to 
the Persian Gulf effectively add two wings to the Air Force structure 
without the airplanes to equip them, crews to man them, or support 
personnel to run them. This has created negative, Service-wide impacts 
on personnel and readiness. Please describe for the Committee what 
constitutes an Air Expeditionary Force.
    Air Force Answer. An Air Expeditionary Force (AEF) is a package of 
aerospace forces, tailored to meet the needs of theater Commanders in 
Chief (CINCs). Our goal is to further develop and expand our abilities 
to respond globally within 48 hours of an Execution Order. This 
operational concept is based on the premise that an effective military 
response during the early stages of a crisis is key to deterring 
conflict, seizing the initiative, and resolving the situation on terms 
favorable to the U.S. and its allies. AEF forces are light, lean, and 
highly capable of deploying and employing rapidly, thereby leveraging 
the inherent strengths of aerospace power--versatility combined with 
speed, flexibility, and the global nature of our reach and perspective. 
AEFs are planned to meet a CINC's time-critical mission objectives and 
offer the National Command Authority (NCA) a rapidly executable 
military Course of Action (COA).
    An AEF may be composed of any combination of aerospace assets which 
perform one or more of the Air Force's basic functions: Counterair, 
Counterspace, Counterland, Countersea, Strategic Attack, 
Counterinformation, Command & Control, Airlift, Air Refueling, 
Spacelift, Special Operations Employment, Intelligence, Surveillance, 
Reconnaissance, Combat Search and Rescue, Navigation & Positioning, or 
Weather Services. An AEF can be designed to accomplish any mission 
across the spectrum of military operations. To date, we've sent six 
AEFs to support OPERATION SOUTHERN WATCH with a force composition of 
approximately 30 fighters, 3 bombers, 4 tankers, and required combat 
support forces. These deployments have provided a baseline for further 
development and expansion of the AEF concept. This continued 
development of our capability to rapidly conduct and sustain AEF 
operations will offer the NCA options to reduce our rotational presence 
commitments.
    Question. How does the Air Force go about assembling the personnel, 
aircraft and support equipment to outfit an AEF for deployment?
    Air Force Answer. The Air Force component commander develops a 
listing of personnel and equipment requirements for the Air Force 
portion of the supported Commander-in-Chief's (CINC's) stated 
objective. This listing reflects the combat/combat support forces to be 
employed and the requirements for movement of replacement personnel, 
along with supplies and equipment. Once an operations order (OPORD) is 
issued, the MAJCOMs designate actual units in the listing to allow the 
supporting CINC to satisfy the force requirements established by the 
supported CINC. When units are designated to participate in a planned 
operation, the responsible commanders place the units in a deployment 
readiness condition according to the priority for deployment.
    Generally, the Air Force designates force capabilities by Unit Type 
Code (UTC) which uniquely identify each type of force capability. These 
UTCs are then filled (sourced) using actual Air Force combat forces. 
Active duty resources are used for the most part, but Air Reserve 
Component (ARC) forces are also sourced. In fact, some force 
capabilities exist only in the ARC. Resources that are not available 
from the combat unit are sourced from combat support UTCs located at 
the home station. Remaining UTC requirements are sourced from other 
locations. Integrity of the combat unit will be maintained to the 
maximum extent possible.
    All Air Expeditionary Force (AEF) deployments have the ability to 
reliably and selectively apply precise aerospace power. These AEFs are 
tailored to mission success with the right combination of capabilities 
and people to match any challenge. An AEF is rapidly deployable to any 
part of the world and can decisively apply the selected air and space 
capabilities across the spectrum of crises.
    Question. What impact does the deployment of an AEF have on the 
CONUS units from which its assets are obtained? What happens to 
readiness? OPTEMPO? PERSTEMPO?
    Air Force Answer. Ideally, Air Expeditionary Forces provide a rapid 
response force which can deploy for a short time, at a bare base 
location, to support an unforeseen crisis or contingency. Continuous 
and frequent force rotations to semi-permanent, previously unprogrammed 
bases have a large impact on readiness. These rotations increase the 
workload for everyone, whether they are deployed or at home. 
Furthermore, readiness suffers significantly if supplemental funding is 
late or has to be offset from other programs, or if training in the 
deployed location is limited. Obviously, as more deployments and 
rotations need to be supported, OPTEMPO and PERSTEMPO will increase.
    Question. What changes does the Air Force plan to make to the 
basing of its personnel and equipment assets to minimize the disruptive 
effects of deploying an AEF?
    Air Force Answer. We are currently examining this very issue and 
expect to have specific recommendations later this year. As you know, 
over 14,000 Air Force personnel are deployed in support of rotational 
deployments and other contingencies. This represents a four fold 
increase in our deployments during the past 10 years while we have 
incurred a 36% drawdown in forces; a drawdown which has not been 
matched by a commensurate drawdown in infrastructure. Fulfilling our 
requirements for both rotational and unplanned commitments increases 
schedule variation and decreases stability for our force and their 
families. It is likely this pattern will remain the norm for the 
foreseeable future.
    Hence, our first step is to explore and refine current concept of 
operations and logistics associated with the deployment and employment 
of Air Expeditionary Forces (AEFs). We are striving to bring 
flexibility and predictability to the force, and our goal is to 
equitably distribute taskings to decrease TEMPO. This includes the 
total integration of active and reserve forces to meet the demanding 
tasks of today and tomorrow. Our second step is to examine basing 
strategies to ensure the effective use of limited resources as we 
continue to work within a constrained budget environment. It is our 
belief that we presently maintain infrastructure above and beyond what 
is necessary to support our current and foreseeable force structure. 
This excess infrastructure spreads our forces thinly across numerous 
bases, which are not operating at peak efficiency, and draws away 
critical resources needed to support our warfighting and modernization 
efforts. We need to move towards a smaller number of more robust bases 
where we can have the depth and breadth of deployable operational and 
support forces and still retain viable operations and support at home.
    These efforts are designed to exploit the unique aspects of 
aerospace power as we evolve to becoming an Expeditionary Aerospace 
Force (EAF). This evolution will become our institutional focus and 
guide our future strategic planning efforts. It requires that we 
examine the best means to institutionalize and adjust our 
organizational and management processes to meet the expeditionary 
nature of our worldwide requirements.

       Operations Other Than War and Degradation of Combat Skills

    Question. It has become common practice when supporting military 
operations other than war to split units between home-station and 
deployed locations, making it difficult to rapidly respond to a major 
regional conflict. For example, the 1st Armored Division in United 
States Army, Europe, has half its command in Bosnia and the other half 
in Germany. Reconstituting would take a major logistics effort, even 
assuming all elements were fully trained to take on high-intensity 
conflict mission. In addition, the Army units may require as much as 
180-270 days in order to regain proficiency in combat related skills. 
Does the Army have adequate training assets such as training ranges to 
ensure that all elements deployed to military operations other than war 
could be retrained within a six- to nine-month period?
    Army Answer. Yes. The Army has adequate training assets, including 
training ranges, for deployed units to regain combat proficiency. 
Although the number of training ranges and assets are adequate, the 
time to regain combat proficiency also depends on how well units 
develop, schedule, and execute their training plans. The Army does not 
stop training while supporting operations other than war. Units 
routinely deploy with training plans, training support packages, and 
training simulators and simulation devices. For live-fire training, 
units use portable targets and lifting devices to maintain individual, 
crew, and unit weapons qualification. Commanders are responsible for 
assessing and maintaining unit readiness and for prioritizing training 
tasks. Units may not be able to train on every mission essential task 
and combat related skill, but they maintain readiness on most. It 
depends upon the type of unit involved and the duration of the mission 
executed. It is important that we continue to modernize and sustain our 
training capability.
    Navy Answer. Current training assets are adequate to meet the 
Navy's cyclical requirements. The Navy monitors and periodically 
assesses these training assets to ensure they are adequately meeting 
deployment posture requirements.
    Marine Corps Answer. Overall, the Marine Corps does have adequate 
training assets and ranges to support training of deploying units. As 
most Marine contingency response taskings are met by our forward 
deployed rotational units, fresh Marine units are always prepared to 
replace returning units. Retraining of units is not a major issue for 
the Marine Corps. Our units deploy with adequate training to meet 
contingencies in Military Operations Other Than War (MOOTW), and our 
training assets and ranges support this requirement.
    Air Force Answer. From a national perspective, the Air Force has 
sufficient training assets to accomplish required retraining. We are 
working to remedy some localized training range and airspace issues, 
and we are implementing needed quality improvements to our simulators; 
however, these issues do not limit the Air Force's ability to retrain 
our deployed forces within the stated period.
    Question. The Committee understands that there would be a major 
logistics effort needed to move troops in order to conduct training 
after a rotation to Bosnia. In addition to the time needed to conduct 
training, what amount of time would be needed to assemble the units to 
conduct such training?
    Army Answer. No additional time is required to preposition units 
for training. The transit time, unit assembly time, and training 
planning and preparation time are included within the estimated time 
required to regain proficiency in a unit's mission essential tasks.
    Navy Answer. The primary support to Bosnia has been provided by 
Carrier Battle Groups and Amphibious Ready Groups operating in the 
Mediterranean Sea on scheduled rotational deployments. Navy's 
deployment based training cycle has not been affected by support to 
Bosnian contingency operations.
    Marine Corps Answer. The Marine Corps would not encounter 
significant time or logistical problems like the Army if called upon to 
redeploy personnel from Bosnia in response to a major regional 
conflict. The Marine Corps has vast experience in maintaining CINC's 
forward presence requirements utilizing our time tested unit rotation 
or deployment cycle and the associated schedule. The Marine Corps 
maintains on average approximately 23,000 of our 174,000 personnel 
forward deployed at any given time in support of the theater CINC's. 
Most of these forces are on a rotational deployment cycle. It is 
through this rotational approach to deployments and requirements that 
the Marine Corps is able to ensure that those forces forward deployed 
are the most ready if and when the call comes. Additionally, our 
experience as ``deployers'' has taught our commanders at every level 
how to be innovative and maximize training opportunities and combat 
skill proficiency while deployed. This approach is part of our 
expeditionary mindset and it ensures our Marines are ready to smoothly 
transition between all levels of peacekeeping or conflict. Today, we 
provide support to Operation Joint Guard mission requirements with a 
relatively small footprint of active duty and reserve forces that 
includes:
    The 26th Marine Expeditionary Unit (Special Operations Capable) 
embarked on the USS Wasp Amphibious Ready Group (active duty unit).
    Marine Tactical Electronic Warfare Squadron 4 (VMAQ-4(--) an active 
duty unit with 3 EA-6B aircraft operating from Aviano airbase in 
Italy).
    A 10-man detachment from the 4th Civil Affairs Group--reservists 
operating in Bosnia.
    A 7-man detachment from Marine Unmanned Aerial Vehicle Squadron 2 
(VMU-2)--an active duty unit operating in Bosnia.
    A 22-man detachment from the 2nd Landing Support Battalion--an 
active duty unit operating in Taszar, Hungary and Tuzla, Bosnia.
    Although these units perform a diverse mix of missions, they 
nevertheless could be assembled on short order if necessary to 
facilitate training requirements or respond to a major regional 
conflict. In either case, a major logistical effort would not be 
required and the movement of forces would be limited only by the 
availability of inter/intra theater lift.
    Air Force Answer. The USAF Bosnian presence is composed of 
individuals or small contingents of specialists from many operational 
units. These forces primarily perform the specialized functions of 
airfield operations, airfield security, civil engineering, and 
aeromedical evacuation. The duties they perform while in Bosnia 
reinforce required skills. Upon returning to the US, required training 
is conducted by the individual's permanent unit of assignment, which 
continued to function while the member was deployed. Therefore, the Air 
Force does not need to reconstitute forces for training following this 
deployment, and no major logistics effort or time is required.
    Question. The Committee is aware that the combat skills of flight 
crews deteriorate during deployments to military operations other than 
war such as the North Atlantic Treaty Organization mission in Bosnia. 
How long would the retaining period take to refresh the combat skills 
of flight crews deployed in support of operations such as Bosnia?
    Army Answer. The aviation skills that will be lost, and to what 
degree, will depend on the length of deployment and the purpose 
(mission) of the deployment. The length of time to retrain will also 
vary according to the availability of training resources, ranges, 
ammunition, and flying hours. However, many skills required to perform 
peacekeeping missions are sometimes the same skills required to perform 
combat operations. General support aviation units will perform many of 
their combat tactical tasks in the execution of their peacekeeping or 
contingency missions while, an attack helicopter battalion will not 
perform as many. Accordingly, to ensure that all mission essential 
tasks are trained to standard, the respective commander will 
specifically tailor the training conducted by his unit upon completion 
of a deployment. This training could be expected to include unit 
collective training and crew gunnery qualification.
    Navy Answer. Navy readiness data over the past 5 years indicate 
that our aviators' combat skills remain almost constant throughout 
their deployment. Fleet, Battle Group, and Air Wing Commanders 
constantly work to maximize training opportunities. Although squadron 
readiness data shows a drop as ships transit home and begin to lose 
some of the more fragile training qualifications, all airwings in the 
past 5 years have had higher readiness rates departing theater than 
they did on departure from CONUS.
    Marine Corps Answer. As the committee may be aware, Marine Aviation 
recently transitioned to the ``Core Competency'' model of combat 
training. Under this philosophy of training, units focus their training 
on those aviation skills that they are most likely to perform in all 
combat situations before expending resources on training for the high-
risk low probability of execution skills or contingency specific 
missions. Once this core level of training is first achieved, it is 
usually only a matter of periodically redemonstrating proficiency in 
the particular skill set--usually on a three to six month recurring 
cycle. In many instances, air operations in support of military 
operations other than war provide sufficient opportunity to 
redemonstrate these core skills while at the same time providing 
operational experience with live ordnance, real time intelligence, 
Command & Control, and Joint Combined forces that cannot be duplicated 
in CONUS training without expending significant resources.
    For those few core skills that cannot be maintained because of the 
unique nature of a particular operational deployment site or 
operational taskings, the unit can usually regain proficiency within 
one to three months of dedicated training.
    Air Force Answer. The length of time required to regain pre-
deployment skill levels of Air Force flight crews depends on several 
interrelated factors. Among them are the amount and quality of training 
during the deployment, the length of the deployment, the experience 
level of the flight crews, and the types of missions and aircraft. 
Because of these factors, the retraining time varies widely.

                 Land Forces Readiness Training Funding

    Question. The press release that accompanied the roll out of the 
fiscal year 1999 budget claims that about $1,000,000,000 was added to 
the Operation and Maintenance accounts to preserve readiness. What is 
the Army share of this adjustment?
    Army Answer. The Army added $64,000,000 to its Operation and 
Maintenance, Army, readiness accounts in fiscal year 1999.
    Question. The Committee understands that emergent Department of the 
Army requirements are, in part, responsible for the reallocation of 
Operation and Maintenance funding away from readiness training. Could 
you describe for the Committee those priorities that have been funded 
instead of readiness related training?
    Army Answer. Austere funding in 1998 forced the Army to divert 
resources from readiness training accounts to cover critical needs in 
other programs and pay their assessed share of the Operation and 
Maintenance, Army (OMA), unspecified congressional reductions. The 
major unspecified reductions levied against the readiness accounts 
include: civilian personnel underexecution; National Defense Stockpile 
Fund; OMA excess inventory; revised economic assumptions; and temporary 
duty expenses. The adverse impact of these reductions is much greater 
because readiness funding levels had already been adjusted for reduced 
pricing and travel, as well as personnel and equipment levels.
    When resources are scarce, commanders absorb funding reductions 
within readiness accounts and protect other activities which are 
essential to the overall operational readiness of the Army. This 
includes funding for: training infrastructure and support facilities, 
including operation of training areas and ranges; centrally procured 
clothing and equipment; training ammunition; unit Nuclear Biological 
and Chemical and medical supplies; maintenance and supply support 
facilities; Power Projection Facilities; the incremental cost of 
participation in Joint Chief of Staff exercises, Active and Reserve 
component support; force communications requirements; facilities 
associated with certain combat development activities; and Land Forces 
Depot Maintenance. In addition, other infrastructure and unique 
management activity funds, including Base Operations Support, Real 
Property Maintenance, Army, funding for Unified Commands, and other 
miscellaneous activities, are funded at bare minimum levels and were 
not able to absorb any additional reductions. These supporting 
activities are essential components of the Army's ability to train, 
deploy, and sustain operations and are primary contributors to quality 
of life throughout the Army.
    Shortages in 1998 are causing commanders to make year of execution 
``boots-on-the-ground'' decisions on selected training in order to 
achieve the optimal readiness balance between all the myriad of factors 
impacting readiness. Already, some units are maintaining equipment 
below normal maintenance standards, repair parts stockage levels will 
drop well below authorized levels, and units are eliminating collective 
unit training at task force level and above, except for Combat Training 
Center rotations and task force deployment exercises. Commanders are 
attempting to balance their existing resources by paring down training 
to those events required to sustain bare minimum acceptable training 
readiness. Commanders are forced to make necessary resource trade-offs 
in order to maintain the delicate balance of unit readiness and 
preserve the minimum acceptable quality of life standards for Army 
soldiers and their families.
    Question. Would the Army find it advisable to develop more 
restrictive reprogramming guidance for the Operation and Maintenance 
account to prevent the migration of funds from readiness related 
training to other support functions? If not, why?
    Army Answer. No. More restrictive reprogramming guidance is not the 
way to go. For fiscal year 1998, we already have more restrictive 
guidance than in the past, both in the reduced dollar threshold and in 
the number of budget lines to which it is applied. This has increased 
the workload at all levels of the Army to implement and track these 
thresholds. It has not eliminated the underlying driving forces behind 
migration, which are a tight budget and the need for field commanders 
to flexibly adjust to emergent requirements. Rather than more 
restrictive guidance, we need less. Eliminating the thresholds, or at 
least raising them to $50,000,000, would allow us to manage our funds 
more efficiently during the year with less of a workload than we are 
currently experiencing.

                 National Training Center and Readiness

    Question. How does the Army propose spending the additional 
National Training Center funding provided in the Fiscal Year 1998 
National Defense Appropriations Act?
    Army Answer. The Fiscal Year 1998 National Defense Appropriations 
Act provided an additional $30,000,000 in funding for the National 
Training Center (NTC). The Army proposes to spend this funding on 
approximately 170 miles for each of 17 the Active component heavy 
battalions using the NTC prepositioned fleet while participating in NTC 
rotations in fiscal year 1998.
    Question. The Committee understands that the Army's 1999 budget 
request again proposes that units absorb the cost of National Training 
Center (NTC) rotations from home station training rather that 
separately funding such rotations. Why?
    Army Answer. The Army has updated the Combined Arms Training 
Strategies that are used to determine training and resource 
requirements. A major change in these strategies included making the 
NTC rotation a part of the unit's overall Home Station Training (HST) 
program. The Army changed the way it resources the prepositioned fleet 
at the NTC to reflect current training doctrine, to ensure all units 
are resourced equally, and to align the programming of its scarce 
Operations and Maintenance, Army, dollars with the way they are 
actually executed. Units in Germany who participate in NTC-like 
training exercises at the Combat Maneuver Training Center (CMTC) are 
resourced such that their CMTC rotations are included in their Home 
Station Training funding. Until fiscal year 1998, Forces Command 
(FORSCOM) units that rotated to the NTC and used the prepositioned 
fleet received additional resources for this training. This caused the 
Army to resource FORSCOM units at a higher level than the rest of the 
Army, to include units stationed in Korea. A review of the vehicle 
execution reports show that FORSCOM units are training at approximately 
the 800 mile level if the rotations to the NTC are included. 
Consequently, the Army changed its resourcing strategy to make the best 
use of scarce resources and to more closely reflect the way resources 
were being used by commanders in the field. There is no reduction on 
the overall resourcing of training and the change will not have an 
adverse impact on readiness.

   Funding for Joint Readiness Training Center and European Training 
                               Rotations

    Question. The Committee understands that rotations to Hoenfels and 
the Joint Readiness Training Center (JRTC) are absorbed within home 
station training funds. Why?
    Army Answer. Since the inception of the Combat Maneuver Training 
Center (CMTC) at Hoenfels and the Joint Readiness Training Center at 
Fort Polk, units have paid for the cost of these rotations with home 
station training funds provided in the annual training accounts because 
rotations are considered part of their normal training strategy. This 
allowed heavy units driving at the Combat Maneuver Training Center and 
the Joint Readiness Training Center to report mileage driven as part of 
their training strategy execution. This includes the cost of spare 
parts and fuel for CMTC rotations of units in Germany who participate 
in training exercises at the CMTC. In addition, neither the CMTC at 
Hoenfels nor the Joint Readiness Training Center at Fort Polk maintain 
an armored vehicle prepositioned fleet. Heavy forces within Europe use 
rail transportation to move their vehicles to Hoenfels, as do Forces 
Command heavy units participating at the JRTC. The cost of this rail 
transportation also is included in their home station training funds.

                 National Training Center and Readiness

    Question. Recent press indicates that there has been a decline in 
the quality of the units participating in National Training Center 
(NTC) rotations. Does this decline in quality make an argument for 
increasing the resources provided for both home station training and 
training rotations?
    Army Answer. One must remember that there is no comparison of units 
at the NTC or any of the Combat Training Centers (CTCs). The CTC 
experience is a learning environment. Commanders, soldiers, and units 
use the CTC experience so that they can identify weaknesses in battle 
operating systems and correct them. Having said that, I am not sure 
that there is, in fact, a decline in the quality of these units. While 
I think that the entry level experience and training may be lower as 
they do to the NTC, I think that their exit level is as high as it has 
been in the past. Operations and Maintenance funding is extremely tight 
as we have tried to shift some funds into modernization. So, basically, 
at home station, we are not doing as many large scale field training 
exercises now. Clearly, more dollars would help to alleviate this, as 
well as give more flexibility for installation commanders to balance 
the base operations and operating tempo portions of their budget.
    Question. In conjunction with the reported decline in the readiness 
of units going to the National Training Center (NTC), it has been noted 
that units are doing less combined arms training at their home stations 
during the work-up to the NTC. General Reimer, could you comment on 
this observation?
    Army Answer. Readiness is not evaluated at the Combat Training 
Centers (CTCs). Readiness is assessed by unit commanders. CTC rotations 
are designed to immerse units in extraordinary training conditions. 
There is no comparison of units; the CTC experience is a learning 
environment. Commanders, soldiers, and units use the CTC experience so 
that they can identify weaknesses in battle operating systems and 
correct them. We are doing less larger scale field training exercises 
than we have in the past, but all units arriving for training at the 
NTC meet the Forces Command minimum training standards. Units arrive at 
the CTCs at various states of training proficiency based on the 
training strategy and guidance of the commanding general. Equipment 
readiness, level of personnel fill, and other factors affect a unit's 
state of training. Some units arrive after a deliberate train-up 
program at home station; others arrive in a ``come as your are'' mode.

                    Cross-Decking and Navy Readiness

    Question. How prevalent is the practice of cross-decking personnel?
    Navy Answer. The term ``cross-decking'' is often used to describe 
three different personnel management actions used by Manning Control 
Authorities (MCAs) (i.e. CINCPACFLT and CINCLANTFLT) to support 
deployment requirements.
    Diverts: the first option. BUPERS modifies a Sailor's ultimate duty 
station to another unit in same geographic location.
    Cross-decks: the second option. Permanent Change of Station (PCS) 
transfer from one deployable unit to another (same geographic 
location); preferably from unit with excess. Sailor must have at least 
one year remaining on sea duty. Occurrences examined closely to ensure 
minimal impact to quality of life.
    TAD Assists: the third option. Temporary fill to provide relief for 
mid-deployment arrival or unanticipated loss (e.g. medical emergency). 
Occurrences examined closely to ensure minimal impact to quality of 
life.
    When necessary, these actions are most often used to fill personnel 
shortages among critical and highly technical ratings. Usage is kept to 
a minimum and monitored monthly by BUPERS. On average, the total number 
of personnel who are either diverted, cross-decked or sent TAD averages 
approximately 2% of the total number of Sailor's transferring.
    The 1997 House National Security Committee Report on Military 
Readiness indicates that there is an in incidence of cross-decking of 
personnel and equipment within the Navy. The House Appropriations 
Committee Surveys and Investigations Staff has also observed this 
phenomenon. Among the Navy's personnel specialties, the most prevalent 
of cross-decking involve fire control and electronics technicians. 
There has also been an increase in the prevalence of cross-decking 
among unrated personnel.
    Marine Corps Answer. Cross-decking is not prevalent in the Marine 
Corps. All cross-decking is done on a voluntary basis; approximately 60 
Marines volunteered to cross-deck in 1997.
    Question. How prevalent is the practice of cross-decking aircraft 
and other equipment?
    Navy Answer. Cross-decking aircraft and equipment while deployed is 
uncommon. During the Inter-Deployment Training cycle (IDTC), non-
deployed aircraft undergo various repairs to ensure material condition 
is maintained at acceptable levels. Since repair times vary, Squadrons 
frequently receive the first available aircraft (which may or may not 
be the aircraft they flew on their last deployment) to support the 
necessary training during the IDTC.
    Marine Corps Answer. Cross-decking of aircraft and equipment from 
ship-to-ship is not normally done in the Marine Corps unless it is to 
provide replacement assets for unexpected attrition. However, the 
cross-decking of aircraft and equipment is a routine practice for 
Marine squadrons involved in the Unit Deployment Program (UDP). Most 
USMC aircraft require some form of Standard Depot Level Maintenance 
(SDLM) that is normally tied to the material condition of the aircraft 
or a fixed operating period.
    When aircraft are deployed as part of the UDP, they are carefully 
screened to ensure they will not require SDLM during the period of 
deployment. In order to save money involved in moving aircraft and 
equipment overseas every six months, the goal is to send aircraft on 
UDP that will be able to spend a full year at the deployment site 
before requiring SDLM. To further reduce transportation costs, aviation 
support equipment (SE) allowances have been put in place at the UDP 
sites to be used by squadrons during the period of their deployment. 
Consequently, this equipment is cross-decked, by design, every six 
months.
    Question. Are there any established goals set for cross-decking 
equipment or personnel?
    Navy Answer. There are no established goals set for cross-decking 
equipment or personnel. Although the Fleet Commander's intentions, with 
regard to personnel, are to minimize the amount of cross-decking that 
occurs, cross-decking equipment is a viable solution to an emergent 
requirement.
    Marine Corps Answer. The Marine Corps does not have ``goals'' for 
cross-decking. A minimum of cross-decking is desired, though we 
authorize cross-decking for individuals who desire it to more favorably 
align their deployment schedule with personal circumstances.
    Question. Is cross-decking on the increase?
    Navy Answer. There is no evidence that cross-decking has become 
more prevalent today than in the past.
    Marine Corps Answer. Cross-decking is not increasing in the Marine 
Corps. While approximately 60 Marines were authorized to cross-deck in 
1997, we anticipate that the number of Marine Corps who cross-deck will 
decrease as a result of our Unit Cohesion Program which aims to keep 
small units of Marines together for their entire first enlistment. It 
should also be noted that all Marines cross decked were volunteers.
    The unit cohesion program is an initiative we have implemented in 
the infantry MOS and plan to execute in all applicable specialties by 
FY99. We will form teams of Marines starting at the specialty schools 
and keep them together throughout their first tour. We plan to place 
these Marines into a unit at an appropriate time in the deployment 
cycle that will allow them to deploy twice within their first 
enlistment in the same unit. This combination of appropriate timing the 
keeping these Marines together will allow us to better manage our 
first-term force and consequently reduce cross-decking.
    Question. What effect does cross-decking have on readiness?
    Navy Answer. Cross-decking is conducted to enhance the readiness of 
deploying units. Although the non-deployed unit providing the asset 
will experience a shortage, the impact to that unit's readiness may be 
minimal. Because of our cyclical readiness posture, we expect non-
deployed readiness to drop soon after units return from deployment. 
This is a direct result of units entering the Inter-Deployment Training 
Cycle (IDTC) where ships and aircraft undergo various levels of 
maintenance. During the IDTC, proficiencies migrate to a basic level 
due to crew turnover and the reduced opportunity to train while 
conducting maintenance. Cross-decking within the IDTC can be 
accomplished without adversely affecting a units's ability to achieve 
combat ready status prior to their next deployment.
    Marine Corps Answer. All Marines that cross-deck from one 
organization to another volunteer to do so for personal reasons. Given 
the extremely small number of Marines who cross-deck, it has negligible 
impact on readiness.

                           Aviation Readiness

    Question. What are the trends in the mission capable rates for each 
Service?
    Army Answer. Our aviation mission capable rates have remained 
consistently above goals with the exception of the CH-47D. Overall, we 
attribute this success to better aircraft reliability, increased 
soldier level experience with the modern systems, and a more efficient 
supply system through automation and velocity management. Additionally, 
our aviation units are one of the hardest working elements in the Army 
today. Regarding the CH-47D, the high non-mission capable maintenance 
rate is the result of corrosion and metal fatigue and is consistent 
with a system having an average airframe age of 29 years. The Army's 
Improved Cargo Helicopter program will reverse the CH-47 readiness 
trend.
    Navy Answer. The overall trend for mission capable Naval aircraft 
has remained relatively flat over the past eight years. For the period 
FY90-97, the Department's overall MC rate has fluctuated between 68%-
72%. In FY98, the average for the 1st quarter was 68%.
    Marine Corps Answer. Marine Corps' average mission capability (MC) 
rate between FY90 and FY97 is 74.4%.

--------------------------------------------------------------------------------------------------------------------------------------------------------
                           FY                                FY 90       FY 91       FY 92       FY 93       FY 94       FY 95       FY 96       FY 97
--------------------------------------------------------------------------------------------------------------------------------------------------------
MC Rate.................................................        69.3        69.0        71.3        76.6        79.4        78.7        76.2        75.0
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Since fiscal year 1994, MC rates have declined from 79.5% to a low 
of 75.3% in fiscal year 1997. The MC rate for the first five months of 
fiscal year 1998 is 72%.
    Air Force Answer. USAF Mission Capability (MC) rates have declined 
8.8% since Fiscal Year (FY) 1991 from 83.4% to 74.6% in the first 
quarter of FY98. Total Not Mission Capable Supply (TNMCS) and the Not 
Mission Capable Maintenance (NMCM) rates drove the MC rate decline. The 
overall TNMCS rate has increased 5.8% between FY91 (8.6%) and the first 
quarter of FY98 (14;4%) as a result of increased parts shortages. The 
overall NMCM increased 3.3% between FY92 (8%) and the first quarter of 
FY98 (11.3%) primarily due to aging aircraft and engine problems.
    Question. What is the current composite mission capable rate for 
the Army helicopter fleet?
    Army Answer. During the last twelve months, our mission capable 
rates within the Warfighting Active Army averaged: AH-64A, 78.9 percent 
(70 percent goal); OH-58D, 81.3 percent (70 percent goal); CH-47D, 70.5 
percent (70 percent goal); and UH-60A/L, 76.5 percent (75 percent 
goal).
    Question. What is the current composite mission capable rate for 
deployed Naval aircraft?
    Navy Answer. The most current AV3M data (December 97) indicates the 
mission capable rate for deployed Naval aircraft is 78.4%.
    Marine Corps Answer. The Marine Corps does not differentiate 
between deployed and non-deployed aircraft when reporting mission 
capable (MC) or fully mission capable (FMC) rates. The composite MC 
rate for the Marine Corps for FY 97 is 75.3%; for FY 98 to-date the MC 
rate is 72.0%.
    Question. The Committee understands that the mission capable rates 
can be manipulated. You are able to fly a plane for a brief period once 
a month and report that aircraft as mission capable even though that 
aircraft may in fact serve as a ``hangar queen.'' Could each of you 
comment on the prevalence of this practice?
    Army Answer. Manipulation of mission capable rates is both 
difficult to do and easy to detect within the Army's automated 
readiness-reporting systems currently in use. The term ``hangar 
queen,'' other than slang for an aircraft with extensive down time, is 
meaningless to the Army from a maintenance management perspective. An 
aircraft's readiness rate is the average of the hours it was available 
with the total hours of the month in question. Any aircraft that was up 
for a short number of hours, regardless of when the period occurred, 
would reflect a poor monthly readiness rate against the goal for that 
particular aircraft.
    Navy Answer. Aircraft mission capable rates are not manipulated. 
There are two different reporting systems that monitor the material 
condition of our aircraft. The first is the aircraft Material Readiness 
Report (AMRR) which is used by Battle Group Commanders to inform others 
of the present condition of their embarked Air Wing. The aircraft 
mission capable (MC) rates included in this report are a daily snapshot 
and are subject to change if an unexpected failure occurs following the 
submission of the report. Since the possibility exists that AMRR data 
may not always reflect the material condition of an aircraft as 
measured by a twenty-four hour clock, it is not used when performing 
operational analysis. Instead, the Navy uses MC data accumulated from 
its Aviation Maintenance, Material, Management (AV3M) data system. MC 
rates within the AV3M system are calculated based on a twenty-four hour 
clock and generally when comparing monthly averages between the two 
systems, AV3M rates are several percentage points lower than that of 
AMRR rates. Additionally, since the time it takes to accumulate AV3M 
data and ensure its completeness is approximately 90 days, AV3M data is 
not useful to a Battle Group Commander when monitoring the ``present'' 
condition of an embarked Airwing (AMRR data is better suited). However, 
AV3M data does provide a more accurate readiness picture for use in 
resourcing aircraft material condition.
    Marine Corps Answer. The practice of having a ``Hangar Queen'' is 
common throughout each aircraft community to consolidate Not Mission 
Capable Supply (NMCS) requisitions with long lead times. However, 
because ``Hangar Queens'' have NMCS requisitions against them, they are 
reported as not mission capable (NMC), and not as mission capable (MC). 
Each Marine Aircraft Wing (MAW) has a Special Interest Aircraft 
(SPINTAC) management program designed to maintain visibility of 
aircraft that have been in a NMCS condition for thirty days or more. 
Once an aircraft is identified as being SPINTAC, special procedures are 
instituted that are designed to prevent further degradation of material 
condition and return such aircraft to an MC status as expeditiously as 
possible. It should be noted, however, that MC rates are based on a 7 
days a week, 24 hours a day clock, so stating that a MC rate is 70% 
means that aircraft were flyable 70% of the time. A one time flight for 
a ``hangar queen'' will only minimally affect the overall MC rate.
    Air Force Answer. Our system prevents this type of situation, 
because we regard MC rates against the total possessed hours for each 
aircraft. Each aircraft accrues time as Mission Capable, Not Mission 
Capable for Maintenance, or Total Not Mission Capable for Supply 
status. An airplane would be recorded as MC only as long as it is 
capable for flying and performing its primary mission.

                            Cannibalization

    Question. Gentleman, what is the rate of cannibalization in your 
respective Services?
    Army Answer. We do not believe the Army has a cannibalization 
problem. Army reviewed recorded data from the Work Order Logistics File 
(WOLF) from 1995 until March 1, 1998, for instances for parts being 
obtained from cannibalization points. These cannibalization points are 
our official method of controlling the exchange of items from a pool of 
equipment that is either excess to the needs of the Army, damaged and 
declared an item that may be stripped prior to being salvaged, or is a 
group of equipment that has specifically been placed in a 
cannibalization point to support an obsolete system. Our WOLF data 
shows 2,313,029 total work orders recorded in WOLF and 8,474 
requirements that were filled from cannibalization as a source of 
supply. This is .4 percent attributable to cannibalization. Army 
additionally uses ``controlled exchange'' procedures that allow 
commanders to make judgments to maximize readiness through the 
substitution of parts from long term-deadlined equipment for near term 
repair. Any use of controlled exchange has to be backed by valid 
requisitions and detailed on the monthly readiness reports. Our 
Aviation community uses this type of exchange the most within Army. Use 
of it is essential to maintaining readiness for Army aircraft.
    Navy Answer. The most current AV3M data (December 97) indicates the 
cannibalization rate for Naval aircraft is 9.9 cannibalization/100 
Flight Hours.
    Marine Corps Answer. The cannibalization rate for the Marine Corps 
for FY 97 was 10 cannibalizations per 100 flight hours. The FY 98 
cannibalization rate to-date is 7.1 cannibalizations per 100 flight 
hours.
    Air Force Answer. The current, first quarter Fiscal Year (FY) 1998, 
overall Air Force cannibalization rate is 3.5 cannibalizations per 100 
flying hours, down from 4.2 in fiscal year 97. The cannibalization rate 
decreased from 3.6 cannibalizations per 100 flying hours in fiscal year 
91 to 2.1 in fiscal year 95. The cannibalization rate then increased to 
4.2 cannibalizations per 100 flying hours in fiscal year 97.
    Question. What are the cannibalization goals for each of your 
services?
    Army Answer. The Army does not have an established goal for 
cannibalization. As stated previously, there are unique needs for 
cannibalization, but our preference and policies are that the use of 
this method is to be controlled through established cannibalization 
points. However, we do make use of ``controlled exchange,'' which is 
the removal of serviceable components from unserviceable economically 
reparable end items for immediate reuse in restoring a like piece of 
equipment to fully mission capable status. We do have very strict rules 
on controlled exchanges, and we allow the commander the leeway to make 
the decision as he or she is closest to the tactical situation. We do 
not condone the wholesale use of using pieces of equipment as sources 
for supply.
    Navy Answer. There are no established cannibalization goals set for 
the Navy. Although the Fleet Commander's intentions are to minimize the 
amount that occurs, cannibalizations are a viable solution to an 
emergent requirement.
    Marine Corps Answer. The Marine Corps does not establish a specific 
quantifiable cannibalization goal. We just try to be sure that it is 
used wisely and that each such action is reviewed by upper management/
leadership.
    Air Force Answer. While the Air Force has no goal for 
cannibalization actions, cannibalization trends are tracked at an Air 
Force level, along with the Total Not Mission Capable rate, to indicate 
the level of effort required to work around spare parts shortages. 
Decisions concerning the feasibility and need to cannibalize spare 
parts are made at the squadron level and are validated by the unit 
maintenance production superintendent. Although units have no 
cannibalization rate goals, they do manage cannibalization actions 
against aircraft Mission Capable (MC) rate goals. Production 
superintendents base cannibalization action decisions on feasibility, 
difficulty, and need. Cannibalizations meet the need to provide a spare 
part to meet an aircraft MC rate production goal or an operational 
requirement, such as filling a deploying Readiness Spares Package 
shortfall or making a specific aircraft ready for a scheduled mission.
    Question. What trends do you observe in cannibalization? Is the 
situation getting worse, better, or about the same.
    Army Answer. We do not believe the Army has a cannibalization 
problem. Three-year data shows a steady state of usage of cannibalized 
parts. Of 611,819 high priority job orders, usually attributable to 
readiness, 6.421 were filled through cannibalization. However, there 
has been an increased use of controlled exchange in aviation units, 
primarily due to declining availability rates caused by reduced 
funding.
    Navy Answer. A review of cannibalization data from 1980 through 
December 1997 indicates cannibalizations are declining overall per 100 
flight hours. However, in FY97 the cannibalizations rate increased 8.3% 
(from 8.4 Canns/100 FH in FY96 to 9.1 Canns/100 FH in FY97). This 
slight increase was attributed to the Navy's underpricing of the Flying 
Hour Program. Although the most recent data, 1st quarter FY98, 
indicates the rate (9.4 Canns/100 FH) is slightly higher than the FY97 
figure, we are optimistic that the 1998 fiscal year cannibalization 
rate will be lower than that of FY97 and will continue downward.
    Marine Corps Answer. In spite of periodic fluctuations, Marine 
Corps cannibalization trends have been about the same since FY90. The 
average rate of cannibalization per 100 flight hours since FY90 is 7.0. 
In FY97 the cannibalization went up to 10, but for FY98 to-date the 
rate is back down to 7.1 per 100 flight hours.
    Air Force Answer. Cannibalization rates decreased from 3.6 
cannibalizations per 100 flying hours in FY91 to 2.1 in FY95. The 
cannibalization rate increased to a peak rate of 4.2 in FY97. The first 
quarter of FY98 cannibalization rate was 3.5 cannibalizations per 100 
flying hours.
    Question. Is the apparent increase in cannibalizations attributable 
to supply problems? Maintenance problem? Lack of funding? Other causes? 
Please explain.
    Navy Answer. Cannibalization actions are attributed to many things 
including immediate operational/mission requirements, supply response 
time, supply material availability, Depot and/or Intermediate Level 
repair capability and/or parts shortage/backlog. However, the recent 
increase in cannibalizations has been attributed primarily to the FY97 
Flying Hour Program shortfall.
    The FY98 Congressional plus-up, in addition to the funds we have 
added to our readiness accounts for FY99-03, will provide our 
maintainers necessary funds to order parts and reduce the rate of 
cannibalizations.
    Marine Corps Answer. The major reason behind cannibalization in the 
Marine Corps continues to be lack of readily available spare parts. 
Each Marine Aircraft Group (MAG) has a supply allowance for each Type/
Model/Series aircraft assigned based upon projected flight hours, 
average demand, and system availability, but high usage repairable 
items are often tied up undergoing repair in the Intermediate 
Maintenance Activity (IMA) and are not readily available for issue. 
Other factors contributing to cannibalization are the failure to fund 
depot repair schedules to match fleet usage rates, and a lack of 
aviation depot level repairable (AVDLR) money which would allow a MAG 
to turn-in a repairable part to the supply system and draw a 
replacement item.
    Air Force Answer. Increased cannibalization rates reflect a higher 
level of effort to work around spare parts shortages. Spare parts 
shortages are primarily driven by: (1) aging aircraft problems, such as 
longer than expected flight control surface repair times because of 
corrosion and out of production parts, (2) excessive component repair 
part lead times that caused two out of the top ten C-130 mission 
capable spare parts shortages, (3) technical surprises, such as high 
performance engine reliability problems, (4) contractor delinquencies, 
such as a subcontractor that pulled out of a contract for F-16 Heads Up 
Display Unit parts, and (5) organic repair constraints, such as 
manpower and test equipment shortfalls. The 82% spare parts funding 
level in FY97 compounded spare parts problems especially in the fourth 
quarter of the fiscal year. We expected improved FY98 and FY99 spare 
parts funding, total engine life management planning, and streamlined 
supply chain management to stabilize and begin recovering spare parts 
shortages.

                         Spare and Repair Parts

    Question. Congress added $622 million above the budget request in 
the fiscal year 1998 Appropriations bill for aviation spares. What 
effect has this funding had on the readiness of Navy Aviation units?
    Navy Answer. The FY98 Congressional plus-up, in addition to the 
funds we have added to our readiness accounts for FY99-03, will 
facilitate the procurement of additional resources to enhance 
readiness. Specifically, it will allow our maintainers to order the 
necessary parts and perform the essential repairs needed to improve the 
material condition of our ships and aircraft. We have already observed 
improvement in aircraft Mission Capable (MC) and Full Mission Capable 
(FMC) rates. We are optimistic these trends will continue and similar 
positive trends will soon follow in other readiness indicators.
    Marine Corps Answer. The Navy portion of the $622 million addition, 
$322 million, went to support additional purchases of aviation depot 
level repairables with enhanced reliability and to adequately fund 
Marine Aviation Campaign Plan flying hours.
    Air Force Answer. The Air Force received $300 million from the FY98 
Appropriations bill for aviation spares. This funding provided 
additional spares needed to execute the flying hour program and help 
stabilize our Total Not Mission Capable for Supply rates. This 
additional funding, together with implementation of our Engine Life 
Management Planning initiatives and streamlined supply chain 
management, should help to stop the current erosion of our mission 
capable rates.
    Question. What were the causes of the sudden occurrence of a lack 
of spares? Was it a problem in the supply system? Depot maintenance? 
Or, was it purely a financial issue?
    Army Answer. The Army has not experienced a sudden occurrence of a 
lack of spares.
    Navy Answer. The primary cause for insufficient spares in FY97 was 
directly related to the underpricing of the Flying Hour Program. By 
underestimating the growing cost and demand of aviation depot 
repairables (AVDLRS), our Sailors were not provided sufficient OMN to 
order the necessary parts required to conduct all their maintenance. As 
a result aircraft mission capable and full mission capable rates were 
impacted.
    The FY98 Congressional plus-up, in addition to the funds we have 
added to our readiness accounts for FY99-03, will provided our 
maintainers the necessary funds to order parts and help improve the 
material condition of our aircraft.
    Marine Corps Answer. The perception of a sudden occurrence of a 
lack of spares is limited to specific weapon systems, and even in these 
cases, the condition is more a perception than a reality. In most 
instances, the spares are in the system, but are not in a Ready For 
Issue (RFI) condition. In these instances where a lack of funding 
exists, shortfalls in funding generate backlogs in parts awaiting 
repair at the various depots, and results in spares allowance 
deficiencies at the operating sites.
    In addition, spare allowance assets undergoing repair at the 
Intermediate Maintenance Activity (IMA) may be held awaiting bit and 
piece parts for long periods of time. Items may also be held awaiting 
maintenance at the IMA due to broken test equipment or lack of trained 
personnel. In such cases, these parts are still in the system, but are 
not available to issue to the using units.
    Air Force Answer. Spare parts shortages are the result of a 
combination of factors, to include aging weapons systems and in 
particular high performance engines, high operations tempo, technical 
surprises, contractor delinquencies and prior year underfunding. In 
short, the Air Force fleet is getting older and is being utilized more 
which is putting greater demands on the supply system. Compounding 
these problems are production limitations and the underfunding for 
spare parts in previous years. In FY 97, spare parts funding was only 
82 percent of the requirement. To combat the effects of these strains 
the Air Force has implemented a comprehensive Engine Life Management 
Planning program to ensure the best maintainability and supportability 
practices are used to better control life cycle costs of the engine 
fleet. The Air Force has also attempted to streamline supply chain 
management to improve production capabilities and increased funding. 
Funding for spare parts was increased in FY 98 and FY99 to 96 percent 
and 100 percent, respectively, of requirements. While our aging fleet 
and high OPTEMPO will continue to pose tough challenges, we are 
committed to overcoming these challenges and getting the parts on the 
shelf so our Major Command customers can execute their flying hour 
programs.
    Question. Gentlemen, the Committee has learned that there has been 
considerable growth in the cost of spares over the past years. What 
effect has such cost growth had on OPTEMPO and readiness related 
training?
    Navy Answer. Although underestimating the cost of spares 
contributed to the FY97 Flying Hour Program shortfall, it did not 
impact our ability to deploy combat ready forces. This is primarily due 
to the actions take by the Fleets to temporarily mitigate the lack of 
funds. Actions such as deferring maintenance and temporarily limiting 
the stock replenishment of parts enabled the Fleets to sustain the 
requisite OPTEMPO and training among those units about to deploy, until 
sufficient funds were received in FY98. The plus-up received from 
Congress in addition to the funds we have added to our readiness 
accounts for FY99-03, will provide our maintainers the necessary funds 
to order parts and perform the maintenance required to help improve the 
material condition of our aircraft.
    Marine Corps Answer. Cost growth of spares has somewhat impacted 
readiness related training and OPTEMPO of the Marine Corps, as 
Operations and Maintenance (O&M) accounts fund both spares and 
training. In terms of OPTEMPO, O&M funding shortfalls may curtail 
training, and thus impact readiness. Marines are as good and as 
effective as the training they receive. We have energetic and 
innovative commanders who are skilled at squeezing full value from each 
dollar spent on unit and field training. However, those training 
dollars are declining. Over the past three years, while our O&M funding 
has remained relatively constant, the cost of equipment readiness has 
risen steadily. As equipment ages, the replacement of parts and major 
assemblies also rises. This is evidenced by the average cost of an 
Equipment Repair Order in FY95 being $93 and the same average cost in 
FY97 was $156.
    Our budgets remain tight. O&M funds are the bill-payers for 
maintenance. We spend approximately $370 million per year on our 
Operating Forces. Of this, maintenance consumes approximately $130 
million, various ``force-wide'' programs, such as initial issue, unit 
deployment, and equipment replenishment consume another $130 million. 
This leaves approximately $110 million for training the Operating 
Forces. It is from this ``residual'' amount that units train. It is 
from within this ``residual'' amount that increasing maintenance costs 
are absorbed at the organizational and intermediate levels, reducing 
funds available for training.
    Air Force Answer. Due to a number of reasons, primarily the 
continuing growth in scheduled and unscheduled engine removals, 
increased sub-system failures, Time Change Technical Order weapon 
system enhancements, and parts coming out of warranty, the cost of 
spares has indeed grown over the past several years. Furthermore, due 
to a combination of factors, including aging weapon systems, increased 
failures, poor forecasting and underfunding of the Air Force's 
wholesale spares supply system during FY 97, it has become more 
difficult to provide spare parts in a timely manner.
    Nonavailability of spares at the unit level has been a primary 
reason for the decline in Air Force mission capability rates from a 
peak of 83.4 percent in FY 91 to the current rate of 74.6 percent. As 
spares availability decreases, we see a resultant increase in 
cannibalizations (CANNs). Clearly, not all CANN actions are bad: the 
15-minute CANN that enables an aircrew to make a sortie is a good 
business decision--one the Air Force has been making for years. 
Unfortunately, due to the increasing age and complexity of our weapon 
systems, many of today's CANNs are neither quick nor easy, resulting in 
longer hours and, sometimes, additional breakage.
    This increased workload not only increases our airmen's level of 
professional frustration, but also it reduces training opportunities. 
Based on increased FY 98/99 spares funding and other initiatives we 
have undertaken, we expect the situation to improve in FY 98; however, 
aging aircraft will continue to pose tough challenges to our logistics 
support systems.
    Question. What measures is DoD taking to curtail growth in the cost 
of spares?
    Navy Answer. Navy has moved from historical demand based sparing to 
a readiness methodology which takes into consideration the mission 
criticality, redundancy and cost of an item when making sparing 
decisions. We have partnered with industry in sharing risks and 
avoiding warehousing, storage and transportation costs. The Navy has 
also developed incentive programs to increase the reliability of our 
spares thereby reducing the number of items we need to procure. We have 
eliminated the intermediate level of material while reducing consumer 
and wholesale inventory levels.
    In addition to the initiatives cited above, we have taken the 
following specific actions:
    Reduced the surcharge by identifying and minimizing infrastructure 
costs;
    Introduced commercial and non-developmental items into our weapon 
systems inventory;
    Implemented an information system to achieve total visibility of 
all assets;
    Continued our price-fighting efforts by performing cost analyses.
    The cost of spares is the result of various factors: the decision 
on the level of maintenance, the engineered and the achieved 
reliability of the component, the criticality of the part to safety and 
survivability of the crew, and the cost of material to repair or 
repurchase new parts.
    The Navy is committed to reducing the cost of spares by ensuring 
the component achieves the desired reliability: by reengineering the 
part to achieve the necessary reliability when the component is not 
performing as intended, by investigating methods of reducing the total 
cost of operating systems, and by exploring new approaches to 
supporting systems.
    Marine Corps Answer. Marine Corps aviation spares are purchased by 
the Navy and initiatives to curtail the growth in the cost of spares 
are primarily managed by them.
    Although the Navy has the lead, the Marine Corps participates in 
efforts to control costs through aggressive pursuit of initiatives such 
as: Premium transportation; direct vendor delivery; multi year 
contracts for spares.
    Air Force Answer. To manage cost effectively, two areas must be 
addressed--cost estimation and the factors that drive cost. An accurate 
baseline or estimate of cost is essential to measure cost increases so 
appropriate management controls can be applied without impacting the 
Air Force's flying hour program.
    In terms of Air Force spares costs, the root of the problems in 
Fiscal Year (FY) 1997-99 is that the Air Force underestimated the cost 
of spares. Although costs were underestimated, we have since worked to 
estimate spares costs more accurately by reviewing the estimating 
process, fixing immediate disconnects and implementing a revised 
process and new procedures. With better baselines, we are better able 
to assess factors driving cost more accurately. The combination of 
factors driving growth includes increased consumption, particularly in 
the engine area, and other causes related to aging weapon systems, 
technical surprises, Time Change Technical Order enhancements, and 
contractor delinquencies, as well as high OPTEMPO. To combat increasing 
costs, the Air Force has implemented a comprehensive Engine Life 
Management Planning program (ELMP) to ensure the best maintainability 
and supportibility practices are used to control life cycle costs of 
the engine fleet. In addition, initiatives are also underway to manage 
costs through improved supply chain management. While high OPTEMPO will 
continue to pose tough challenges for the Air Force, the ELMP and 
supply chain management initiatives are key programs which will 
effectively manage future costs.
    Question. In the Air Force, the two level maintenance concept has 
constrained availability of some types of spares, and given rise to 
establishment of ``Queen Bee'' sites to perform maintenance and meet 
demand for spares that the depots are unable to meet. What is the 
status of two versus three-level maintenance in the Air Force?
    Air Force Answer. In an attempt to help reduce mobility footprints, 
reduce manpower and equipment costs, and protect the support force from 
harm in a conflict, two-level maintenance (2LM) is being applied to new 
and upcoming weapons systems and, when practical, to existing weapons 
systems. In some instances, aircraft engines that were placed under the 
2LM concept have been reevaluated and placed back under a three-level 
maintenance (3LM) mode of operation. However, in most other instances, 
2LM has worked well and continues to be utilized. In either case, there 
is no evidence that suggests 2LM has constrained the availability of 
some types of spares. ``Queen Bee'' regional repair facilities have 
been established to focus intermediate level maintenance at a regional 
location, and, in most cases, operate under the tenets of 2LM. Their 
establishment afforded manpower savings and used the benefits of rapid 
transportation to improve the maintenance process. In the future, 2LM 
will continue to be applied in instances where a clear benefit can be 
demonstrated.

                         Commissary Operations

    Question. Gentlemen, the Committee has heard numerous witnesses 
testify that the commissary benefit is one of the preeminent quality of 
life factors for military personnel. Please explain to the Committee 
how the revised management and funding of commissary operations 
preserves, or improves this benefit?
    Army Answer. On October 1, 1998, commissary store-related 
appropriated fund resources will be transferred from the Defense 
Commissary Agency to the services to align resource responsibility with 
the organizations that control demands on the commissary system. These 
actions will maintain the commissary benefit by providing a financial 
and management structure better able to support resource tradeoffs, 
capital development decisions, and long range planning responsive to 
military personnel and their families. This will be accomplished 
through a strong operating board with service representation and 
authority to issue directives. This will enhance individual service 
involvement with commissary operations.
    Navy Answer. I do not expect these changes will significantly 
change the delivery of the commissary benefit. The revised management 
and funding of the Commissary should be transparent to commissary 
customers.
    Marine Corps Answer. These actions will preserve the commissary 
benefit at its current level by providing a financial and management 
structure better able to support resource tradeoffs, capital 
development decisions and long range planning responsive to military 
personnel and their families.
    Air Force Answer. Under the proposal advanced by the Services, a 
directive board composed of military service representatives will 
govern commissary operations. With the Services providing operational 
and budgetary control, the commissaries will be more responsive to the 
military services, and less vulnerable to budgetary cuts.
    Question. How do you anticipate that the management of the 
commissaries will change under the new structure?
    Army Answer. Under the new management structure, the services agree 
that the day-to-day operation of the commissaries will be administered 
under the direction of the Commissary Board of Directors. The board 
will exercise full authority over commissary operations, be accountable 
to the service Secretaries and Chiefs, and be supported by committees 
for technical expertise in such areas as customer service standards, 
finance, and audit. Also, the Commissary Director will report to the 
Chairman of the Board of Directors and, through the board, will be 
accountable to the service Secretaries and the Chiefs.
    Navy Answer. Within DECA, particularly at the store level, I do not 
believe we will see any significant changes in management. However, 
outside of DECA, the new operating board will give the Services greater 
involvement in decisions impacting management of commissary operations.
    Air Force Answer. One of the main objectives of the Secretary of 
Defense's Defense Reform Initiative was to allow the Office of the 
Secretary of Defense (OSD) to concentrate on broad policy in part by 
relieving it from day-to-day management responsibilities. Consistent 
with that principle, the commissary proposal would leave broad policy 
oversight with OSD, but transfer operational control and supervision of 
day-to-day operations to the Services. Thus, the Services would enjoy a 
far greater role in management and oversight than they have today.
    Question. What will be the role of the Defense Commissary Agency 
(DeCA) under the new commissary management system?
    Army Answer. DeCA will carry out the day-to-day operations of 
commissaries. DeCA will also develop annual financial plans and goals 
for the commissary Agency, commissary system, and all related funds and 
investments, and will forward them to the Commissary Board of Directors 
for approval. Finally, DeCA will ensure that standard commissary 
operational procedures and consistent delivery of the commissary 
benefit across the services is maintained.
    Navy Answer. DECA will still be responsible for running the 
Commissary system and will continue to perform all of the business 
disciplines necessary for day-to-day delivery of the Commissary 
benefit.
    Marine Corps Answer. DeCA will continue to manage the Commissaries 
as they do today. The two major changes relate to whom the Director 
reports to and how funding is provided. As stated above, the DeCA 
Director will report to the Chairman of the Board of Directors will 
report to the Chairman of the Board of Directors vice USD (P&R) and, 
through the Board, will be accountable to the Secretaries of the 
Military Departments and the Service Chiefs for the running of the 
Commissaries. Funding for DeCA will now come from the services, vice 
being provided directly to DeCA by OSD as it has been in the past.
    Air Force Answer. Under the proposal advanced by the Services, the 
Defense Commissary Agency (DeCA) would continue to operate the 
commissary stores. However, DeCA would function under the operational 
control of a directive board composed of military representatives 
rather than members from the Office of the Secretary of Defense. The 
board would set and enforce standards for customer service and 
operational performance, rather than function merely in an advisory 
capacity.

                           Depot Maintenance

    Question. The fiscal year 1999 budget for depot maintenance for the 
active components totals $5.5 billion. The request is $200 million less 
than the amount funded in fiscal year 1998, and is also $200 million 
less than the 1999 column in the fiscal year 1998 budget request. 
Funding for wheeled and tracked vehicle maintenance has been 
substantially reduced in the fiscal year 1999 budget request. The 
reduction in the Army is nearly 50%, a decline of $72 million, and the 
Marine Corps budget for this type of work has been similarly reduced.
    Gentleman, the total depot maintenance budget request is $200 
million less than the amount requested in FY 1998. What risks has the 
Department assumed in reducing the level of funding?
    Army Answer. Depot level maintenance provides long-term readiness 
and ensures the Army's ability to sustain its equipment in support of 
two major theater wars. For the Active component, combat vehicles, 
communications-electronics, and aircraft are funded at 80 percent of 
the requirement. The other commodities are not funded at the same 
levels in fiscal year 1999. However, near-term readiness and industrial 
base related requirements are sufficiently funded. The program provides 
an acceptable level of risk to the Army warfighters and is balanced 
with other Army programs.
    Navy Answer. Although the budget request shows an aggregate 
decrease of $200 million DoD wide, in the case of the Navy's active 
components, the request for aircraft and ship depot maintenance for 
fiscal year 1999 is actually $46 million higher than the fiscal year 
1998 program. This level of funding support a depot maintenance program 
which accomplishes all critical maintenance which maintaining backlogs 
at an acceptable level.
    Marine Corps Answer. The Marine Corps Depot Maintenance funding 
decreases sharply in FY 1999 due to the realignment of funds from the 
Operation and Maintenance appropriation to the Procurement 
appropriation in support of the Amphibious Assault Vehicle (AAV) 
Reliability, Availability, and Maintainability (RAM) Rebuild program. 
Accordingly, the Marine Corps has assumed no additional risk in 
reducing the level of funding.
    Air Force Answer. Active duty Air Force depot maintenance funding 
decreases by $87 million between FY 1998 and FY 1999, but the overall 
funding level (e.g., percentage of requirement funded) remains 
essentially flat as does the backlog in constant terms. This is the 
result of the requirement dropping by $74 million, which maintains the 
overall relationship between funding and requirement. The requirement 
declines with 80 fewer engine overhauls in FY 1999 than FY 1998 
(primarily TF33 engines for the reduced B-52 force structure as well as 
F112 engines for Advanced Cruise Missiles due to a time change interval 
extension from 5 to 6 years) and reduced B-1 software maintenance as 
the Block D software update ramps down in FY 1999. The risks built into 
the FY 1999 depot maintenance budget include the level of funding 
versus requirements (83%) and the fact that $176 million of prior year 
projected working capital fund losses will have to be made up in FY 
1998 vice FY 1999 under a new DoD rate adjustment policy requiring 
losses be paid in the year incurred. We are currently working to source 
this bill in a FY 1998 reprogramming action which will be submitted to 
Congress later this year. If these funds are not made available, we 
will have a problem in both FY 1998 and FY 1999 with our depot 
maintenance program.
    Question. The Committee understands that funding for wheeled and 
tracked vehicle maintenance has suffered a considerable reduction from 
fiscal year 1998 to 1999. What percentage of the total requirement has 
been funded in the Army and Marine Corps budget requests? What is the 
trend in the backlog for such work?
    Army Answer. The Army's total (Active and Reserve components) depot 
maintenance program in fiscal year 1999 is funded at 59 percent. Combat 
vehicles for the Active component, not including the Abrams Integrated 
Management XXI requirement, are funded at 80 percent. The Army does not 
generally perform depot level maintenance on tactical wheeled vehicles.
    Marine Corps Answer. The backlog for wheeled and tracked vehicle 
maintenance in FY 97 is $12.5 million or 13 percent of the total 
requirement. The total requirement has been fully funded in FY 98 and 
FY 99.
    The reduction in the Marine Corps estimate is due to the 
elimination of the AAV from the depot repair program and beginning a 
RAM/Rebuild program for the AAV, financed from the Procurement Marine 
Corps appropriation.
    Question. What is the overall trend for depot maintenance backlogs 
in the fiscal year 1999 budget request? Are the backlogs maintained at 
levels which you consider manageable?
    Army Answer. Our backlog has gone down as an overall trend in the 
fiscal year 1999 budget. The Army considers the backlog manageable.
    Navy Answer. For aircraft, the fiscal year 1999 request and the 
associated outyear funding in the Future Year Defense Program allows us 
to reach backlog levels of 88 active/12 reserve airframes (100 total) 
and 210 active/40 reserve engines (250 total) by the end of fiscal year 
2001. The Fiscal Year 1999 request funds 91% of the ship maintenance 
requirement which is sufficient to accomplish essential overhaul and 
repair work to support the operational forces. This level of funding 
achieves the right balance between our depot maintenance program and 
other competing operations and maintenance requirements.
    Marine Corps Answer. Backlog levels in the FY 1999 budget request 
are $117.1 million, $38.1 million, and $53.3 million in FY 1997, FY 
1998 and FY 1999 respectively. Yes, the backlog levels are considered 
``manageable''.
    The Marine Corps prioritizes requirements by the table of 
authorized material control number (TAMCN) and quantities. We determine 
the risk factors and make a determination of the affordability within 
limited resources. This allows the Marine Corps to focus on mission 
capabilities and readiness.
    Air Force Answer. The backlog trend from FY98 to FY99 is 
essentially flat in constant terms. Active depot maintenance backlog is 
$310 million in FY98 and $323 million in FY99. These levels are 
manageable in the near term but are not sustainable in the long term 
given the increasing age of our equipment. By giving priority to 
aircraft and engine overhaul and missile repair, we can avoid grounding 
aircraft, maintain sufficient spare engine levels, and keep missiles on 
alert and ready. The impact is principally in embedded software, ground 
communications equipment special purpose vehicles, and some component 
repair. The near-term readiness impact of deferrals in these areas is 
more subtle and much more difficult to assess. As our equipment 
continues to age it will be increasingly more difficult to ensure that 
we have adequate depot maintenance funding to keep our equipment combat 
ready. While not ideal, the current backlogs are a reasonable tradeoff 
in order to balance the overall Air Force program.
    Question. Gentlemen, have you encountered instances of quality 
control problems with the output of your depot maintenance activities?
    Army Answer. No. The Army has not experienced instances of quality 
control problems with the output of our depot maintenance activities.
    Navy Answer. While there have been isolated minor problems and 
rework performed following completion of ship maintenance 
availabilities, no significant quality problems have been encountered 
at public shipyards. In-process problems in certain repair functions 
and documentation deficiencies have been found, but these issues were 
identified by routine production and quality assurance procedures and 
corrected prior to completion. The Naval Sea Systems Command (NAVSEA) 
actively works with field activities to resolve these minor problems 
before they become major ones.
    There is no indication of an increase in quality problems at our 
naval aviation depots. A review of data covering a three year period as 
documented by Aviation Discrepancy Reports (Aircraft Defects) and 
Quality Deficiency Reports (Defective Components/Engines) does not 
indicate a negative trend. The aviation depots have traditionally taken 
aggressive action to identify and to correct potential process 
deficiencies before they impact product quality.
    Marine Corps Answer. No, the Marine Corps has not encountered 
quality control problems.
    Air Force Answer. Overall depot maintenance quality remains high. 
However, we did encounter some problems with TF-39 (C-5) engine repair 
work performed at San Antonio Air Logistics Center (SA-ALC) last year. 
Since then, the SA-ALC and General Electric engine teams have 
identified the root causes of the problem and begun implementation of a 
revised process. These changes have already made a significant 
improvement in quality. By this summer, the effort should be complete 
and the quality problems fully corrected.

                       Real Property Maintenance

    Question. The budget request for real property maintenance (RPM) 
decreases by $400 million from $4.8 billion in fiscal year 1998 to $4.4 
billion in 1999. Despite past increases provided by the Congress, DoD 
projects that the backlog of RPM will increase by $2 billion from $14.6 
billion in 1998 to $16.6 billion in fiscal year 1999. Also, the budget 
request terminates the Congressionally established Quality of Life 
Enhancements, Defense account which provided additional funding to DoD 
to accelerate repairs and upgrades to barracks, dormitories and related 
facilities.
    Gentlemen, what percent of your total real property maintenance 
requirements are funded in the fiscal year 1999 budget request?
    Army Answer. In order to balance all readiness accounts in fiscal 
year 1999, real property maintenance is funded at 58 percent of 
requirements.
    Navy Answer. The 1999 budget request provides approximately 70% of 
the funding necessary to arrest the growth in the Navy's critical 
backlog of maintenance and repair.
    Marine Corps Answer. The FY1999 budget request is 68 percent of the 
total real property maintenance requirement for active forces.
    Air Force Answer. The Air Force FY99 budget request for $1.4 
billion only funds real property maintenance requirements at the 
Preventive Maintenance Level (PML). PML represents just the level of 
resources necessary to accomplish periodic maintenance required to 
sustain real property facilities and infrastructure. The annual PLM 
requirement is approximately 23% of total FY99 real property 
maintenance requirements. At this funding level, efforts are limited 
only to recurring maintenance and critical repair projects. Without 
funds to address other urgent repair projects, the backlog will 
continue to grow and reach $4.7 billion at the end of FY99.
    Question. What is the level of real property maintenance backlog 
growth implied by the fiscal year 1999 budget request?
    Army Answer. If real property maintenance continues to be severely 
underfunded, the Army will continue to operate at the emergency repair 
level. Deferring maintenance and repair work will result in the 
continued decay of facility infrastructure, requiring major investments 
for replacements and potentially increased mission failure.
    Navy Answer. With the funding provided in the 1999 budget request, 
the Navy's critical backlog of maintenance and repair for O&M funded 
facilities is expected to grow from a projected $2.7 billion at the 
start of fiscal year 1999 to $3.1 billion by the end of fiscal year 
1999.
    Marine Corps Answer. The Marine Corps backlog in the active O&M 
appropriation is projected to increase from $743 million in FY1998 to 
$814 million in FY1999, or about a 10 percent increase. The backlog in 
the reserve O&M account is projected to decrease by approximately 27 
percent, from $11 million in FY1998 to $8 million in FY1999.
    Air Force Answer. Based on the fiscal year 1999 budget request, the 
Air Force real property maintenance backlog grows from $4.1 billion at 
the end of FY98 to $4.7 billion at the end of FY1999.
    Question. How close is each Service to reaching the upgraded 
dormitory and barracks standards articulated by former Defense 
Secretary Perry?
    Army Answer. Upon execution of the fiscal year 1999 budget, 61 
percent of the U.S. program will be completed, compared to 42 percent 
overseas.
    Navy Answer. The Navy is pursuing construction and conversion of 
all permanent party personnel bachelor quarters to the 1+1 
configuration, and is currently on target to upgrade all of these 
facilities by 2013. To further expedite improving the quality of life 
of our sailors, the Navy is considering an interim bachelor quarters 
construction plan that will include the use of a 2+0 standard when 
necessary as a transitional step toward full 1+1 implementation. The 
Congressionally mandated base-by-base 1+1 implementation plan is 
scheduled to be complete in June 1998.
    Marine Corps Answer. Within the limited resources we have available 
for maintenance of real property and military construction, we have 
placed a great deal of emphasis on bachelor enlisted quarters. As 
currently planned, we will eliminate all inadequate barrack spaces by 
fiscal year 2005 and will eliminate the backlog of maintenance and 
repair for the remainder of our barracks by fiscal year 2004.
    Air Force Answer. The Air Force continues to aggressively improve 
the quality of life for our airmen living on-base in dormitories by 
providing increased privacy and updated facilities. Our strategy is to 
improve privacy by using a dual-pronged approach consisting of both the 
1+1 construction standard and a private room assignment policy.
    In 1997 the Air Force published its Dormitory Master Plan with our 
investment strategy. The first of three steps of the investment 
strategy is to fund the replacement or conversion of all remaining 
permanent party central latrine dormitories no later than FY99. The 
second step is to buy out the deficit of dormitories. The Air Force 
goal is to buy out its deficit of dormitory rooms no later than FY09. 
The final step of the Air Force's investment strategy is to replace or 
convert our existing adequate 2+2 and student dormitories as they wear 
out.
    The second part of our dual-pronged approach is the implementation 
of a private-room assignment policy that authorizes all unaccompanied 
permanent party airmen private rooms by FY02. This policy affects room 
assignments in existing dorms and directly responds to an Air Force 
Quality of Life Survey that indicated 88 percent of single, enlisted 
airmen believe private sleeping rooms would most improve their quality 
of life.
    Air Force leadership is committed to providing safe and adequate 
housing for our unaccompanied enlisted personnel to enhance retention 
and force readiness.
    Question. When does the Department envision reaching its goals for 
upgrading dormitories and barracks?
    Army Answer. With a sustained minimum investment of $430,000,000 
Military Construction, Army, and Operation and Maintenance, Army, 
annually (constant fiscal year 1997 dollars), the Army's goal is to 
complete funding of permanent-party barracks in the United States by 
fiscal year 2008, Europe by fiscal year 2010, and Korea by fiscal year 
2012.
    Navy Answer. At current funding levels, the Navy expects to 
eliminate the critical backlog of maintenance and repair in bachelor 
quarters by the end of 2004 and will upgrade all of these facilities to 
the 1+1 standards by 2013.
    Marine Corps Answer. Within the limited resources we have available 
for maintenance of real property and military construction, we have 
placed a great deal of emphasis on bachelor enlisted quarters. As 
currently planned, we will eliminate all inadequate barrack spaces by 
fiscal year 2005 and will eliminate the backlog of maintenance and 
repair for the remainder of our barracks by fiscal year 2004.
    Air Force Answer. The Air Force plans to achieve our goal of 
upgrading quality of life for our unaccompanied airmen living in 
dormitories by:
    First, buying the last permanent party central latrine dormitories 
with the FY99 MILCON request--a significant and urgent quality of life 
upgrade for our airmen.
    Second, implementing a private-room assignment policy in all our 
existing permanent party dormitories. This policy will be phased-in by 
enlisted grade (E-1 to E-4) over a 6-year period (FY97-FY02). All 
permanent party unaccompanied airmen living in our existing dormitories 
should be housed in private rooms no later than the end of FY02.
    Third, using the Dormitory Master Plan and its investment strategy 
to buy out the deficit of dormitories and replace or renovate the 
worst, existing dormitories no later than FY09. The rest of our 
existing, adequate dormitories will not be upgraded solely to convert 
to the DoD 1+1 construction standard until they reach the end of their 
facility life and warrant a capital facility investment.
    With completion of the three milestones, the Air Force envisions 
housing all its unaccompanied permanent party E-1 to E-4 airmen in 
dormitories, on base, and in private rooms--a comprehensive upgrade to 
the quality of life of our most important resource--our people.

                    Training for Asymmetric Threats

    Question. The Quadrennial Defense Review and the National Defense 
Panel both highlighted the threat of other nations using non-
conventional means to fight the U.S. as a way of offsetting our 
conventional strength. These asymmetric threats include chemical and 
biological weapons, information warfare attacks, and terrorism.
    Which of our major training exercises are conducted with full 
chemical protective gear and how have our forces dealt with conducting 
operations in that environment?
    Army Answer. Army forces use full chemical protective gear during 
portions of most major training exercises. Protective gear is part of 
the soldiers field equipment. Soldiers are required to spend an 
appropriate period of time warning chemical protective gear while 
performing their primary job-related tasks. The goal is to include 
training in exercises to sustain adequate unit proficiency in a 
nuclear, biological, and chemical (NBC) environment. The unit commander 
is responsible for NBC defense training of their unit. Unit proficiency 
is determined by having the unit accomplish its mission under NBC 
conditions during external and internal evaluations to established 
standards. Additionally, commanders have the opportunity to incorporate 
NBC training during rotations at all of the Combat Training Centers 
(National Training Center, Joint Readiness Training Center, and the 
Combat Maneuver Training Center).
    Marine Corps Answer. Combined Armed Exercises (CAXs) held at the 
Marine Corps Air Ground Combat Center at 29 Palms, California, are the 
Marine Corps' only major training exercises. Chemical defense training 
is incorporated into the CAX syllabus as part of the scenario. The 
entire CAX is not spent in full Mission Oriented Protective Posture 
(MOPP) gear, but it is used at appropriate moments for units to 
demonstrate proficiency. CAXs have included Chemical warfare defense 
training as part of the syllabus for several years. The Marine Corps is 
looking at new ways to deal with asymmetrical threats with our Advanced 
Warfighting Experiment series of exercises. Hunter Warrior, Urban 
Warrior and Capable Warrior are exercises designed to utilize and 
experiment with new methods and off the shelf technology to meet the 
asymmetrical threats of the present and future.
    Operations in chemical defense environments are always difficult, 
especially when exacerbated by the desert heat and lack of readily 
available water supplies. Our Marines react reasonably well to this 
environment, because they are trained to deal with its difficulties. 
The predominance of chemical defense training is conducted at the 
squadron/battalion level and below, and not in major exercises, as most 
of the necessary skills and training begin at the individual level.
    Air Force Answer. The Air Force conducts major training with full 
chemical protective gear at the wing level. Every Air Force wing tasked 
to deploy to or located in a chemical-biological high threat location 
exercises their deploying units and in-place forces at least annually. 
This training requires conducting operations in full chemical 
protective gear for extended periods. In addition, the Air Force Major 
Command Inspector General offices periodically evaluate the performance 
of personnel operating in full chemical protective gear during 
operational readiness inspections. Our forces have generally responded 
well in conducting operations in these simulated environments.

                     Recruiting Enlisted Personnel

    Question. The services recruit over 190,000 active duty personnel 
each year. Recruiting quality enlisted members is becoming more 
challenging, because the services are having to deal with a decline in 
youth interest in the military at a time when the military is 
experiencing additional personnel reductions, budget constraints, and 
an increase in the number of deployments.
    What is your recruiting goal for non-prior and prior service 
accessions for 1998? Are your recruiters achieving their mission and/or 
monthly goals?
    Army Answer. The 1998 annual recruiting goal is 67,950 non-prior 
service accessions and 4,000 prior service accessions. Through March, 
the Army has accessed 27,492 soldiers, or 99.7 percent of the 
recruiting mission to date (27,555). In the aggregate, the recruiting 
command has not achieved its monthly contract mission (number of 
applicants who enter the Delayed Entry Pool (DEP)) since September 
1996, but has achieved its monthly accession missions (number of 
recruits who come in Active duty). The effect of meeting accession 
goals, while not meeting contract goals is that the size of the DEP 
gets smaller. As the DEP gets smaller, the recruiters must work harder 
to get contracts ``in close,'' and overall recruiter productivity goes 
down.
    Navy Answer. For 1997, the non-prior service accession goal was 
49,213 and the prior service accession goal was 922. The FY98 monthly 
goal and mission have not been achieved and is delineated as follows:

----------------------------------------------------------------------------------------------------------------
                                                              Oct.     Nov.     Dec.     Jan.     Feb.     Mar.
----------------------------------------------------------------------------------------------------------------
Missed accession goal.....................................      191      525      713       43      699      870
----------------------------------------------------------------------------------------------------------------

    Marine Corps Answer. The non-prior service and prior service (total 
force) accession goal for 1997 was 40,369. The Marine Corps accessed 
40,716, 100.9% of its goal for the year. The Marine Corps has exceeded 
the Department of Defense quality goals of 90% Tier I's and 60% I-3A's. 
During Fiscal Year 1997 the Marine Corps accessed 96.2% Tier I's and 
66.4% I-3A's. The non-prior service and prior service accession goal 
for Fiscal Year 98 through February was 14,905. The Marine Corps has 
accessed 14,905. The Marine Corps has accessed 14,988, 100.6% of its 
assigned goal. In fact, we have exceeded assigned goals for the past 33 
consecutive months. To date in FY98, we have contracted 96.0% Tier I's 
and 55.3% I-3A's. This is ahead of where we were at this time last 
year. Marine Corps recruiting is on track to meet or exceed all quality 
and quantity goals for FY98.
    Air Force Answer. Our FY97 non-prior service recruiting goal was 
30,200 and the prior service goal was 110. Both goals were achieved.
    Question. Give some examples of the Military Occupational 
Specialties (MOS) you are having problems enlisting personnel into. Are 
these MOSs defined as low skill, mid-level skill, or high-skill job 
areas?
    Army Answer. Currently, the Army is overcoming challenges in 
recruiting for the combat arms and combat arms mechanic MOSs. Based on 
initial-entry aptitude requirements, these MOSs are considered low 
skill when compared to other MOSs. Command emphasis and an increase in 
monetary incentives have directly contributed to an improvement in 
recruiting and operating strengths in these MOSs. The table, below, 
displays year-to-date recruiting and strength data for the seven most 
critical combat arms and combat arms mechanic MOSs:

                              [In percent]
------------------------------------------------------------------------
                               Operating strengths     YTD recruiting
                             -------------------------------------------
       Military skills          Fiscal     Fiscal     Fiscal     Fiscal
                              year 1998  year 1997  year 1998  year 1997
------------------------------------------------------------------------
Infantryman.................        100         96         94         60
Field artillery crewmember..        107        101         92         54
Armor crewmember............        110        104         99         70
Tank turret mechanic........         88         77        106         38
Bradley turret mechanic.....         77         69        102         31
Tank systems mechanic.......         96         91        100         93
Bradley systems mechanic....         94         86        110         60
------------------------------------------------------------------------

    Navy Answer. Military Occupational Specialties difficult to recruit 
are Nuclear Field, Fire Control Technician (FT), Missile Technician 
(MT) and General Detail (GENDET). General Detail is defined as a low 
skill job area and all other ratings listed are from high-skill job 
areas.
    Marine Corps Answer. Enlisted recruits are given enlistment 
guarantees in the form of enlistment programs, which are groupings of 
various skills or military occupational specialties (MOS). The ``high 
tech'' occupational fields of Data/Communications Maintenance, 
Communications Electronics, Signals intelligence, and Aviation 
Operations occupational programs present a challenge to our recruiters 
due to their higher line score requirements. The Marine Corps is 
addressing this challenge by offering a $2,000 and $3,000 enlistment 
bonus as incentives to those individuals enlisting for these hard-to-
fill programs. Additionally, the Commanding General, Marine Corps 
Recruiting Command has placed additional leadership focus on filling 
these high tech programs in FY98 and tasked the Region Commanding 
Generals and District Commanding Officers with filling 100% of the 
``high tech'' program requirements.
    Air Force Answer. Attracting people into some Force Specialty Codes 
(AFSCs) is challenging. These include: Combat Control (1C2X1), 
Pararescue (1T2X1), Crypto-Linguists (1N3XX-Germanic, Romance, Far 
East, Mid-East, and Slavic), and Explosive Ordinance Disposal (3E8X1). 
All of these career fields are considered high skill job areas. We've 
implemented a number of initiatives to enhance recruiting for these 
specialties, including targeted advertising and specialized recruiting 
teams.
    Question. What is the average cost for each of the Services to 
recruit and train a new service member?
    Army Answer. The following data is based on fiscal year 1997 Active 
Army accession.

------------------------------------------------------------------------
 
------------------------------------------------------------------------
Recruiting Cost:
  Recruiting Cost Per Accession............................   \1\$10,163
  Military Entrance Processing Command.....................      \2\720
    Total Recruiting Cost..................................      10,883
Training Cost:
  Reception Station (3 days)...............................      \4\600
  Basic Training (8 weeks).................................    \4\8,900
  Advanced Individual Training \3\.........................  17,500 \4\
    Total Training Cost....................................  27,000 \4\
                                                            ------------
    Total Cost:............................................      37,883
------------------------------------------------------------------------
\1\ This cost includes Army College Fund, Enlisted Bonus, Loan Repayment
  Program, Military Pay Army, civilian pay, advertising, communication,
  computer (ADP), recruiter support, and facilities. Because this is an
  average cost per accession, it can vary significantly from year to
  year based on total number of accession.
\2\ This cost includes Military Pay Army, civilian pay, communication,
  ADP, supplies, facilities, physical exams and Armed Services
  Vocational Aptitude Battery test.
\3\ This is based on 10 weeks average.
\4\ This cost includes student's salary, base support, medical,
  ammunition, and facilities.

    Navy Answer. In Fiscal Year 1997, the cost to recruit a service 
member was approximately $6,800. This cost is expected to increase and 
will be adjusted at the end of Fiscal Year 1998 when reprogrammed 
funding for recruiting is calculated against total accessions achieved.
    Marine Corps Answer: Average cost to recruit an enlisted Marine: 
Fiscal Year 1998--$5,018; Fiscal Year 1999--$5,108.
    The cost is determined by the Office of the Assistant Secretary of 
Defense for Accession Policy.
    The average cost to train an enlisted Marine for his/her first 
permanent duty station is as follows:

------------------------------------------------------------------------
                                                          Fiscal year
                                                     -------------------
                                                        1998      1999
------------------------------------------------------------------------
O&MMC...............................................    $1,799    $1,847
MPMC................................................    17,910    17,910
PANMC (AMMO)........................................     (\1\)     1,246
    Total...........................................   $19,709   $21,003
------------------------------------------------------------------------
\1\ Ammunition data prior to FY99 does not allow for a breakdown of
  costs down to the individual school. FY99 costs are only for enlisted
  entry level MOS producing courses.

    These costs do not include costs budgeted by other Armed Services 
to train Marines at other Service locations.
    Air Force Answer. The average cost to recruit a new enlisted member 
into the Air Force is $4,400. On average, it then costs $27,502 to 
train that new recruit. The training cost includes $12,654 for Basic 
Military Training and $14,848 for advanced training. Costs (fiscal year 
1998 dollars) include Operations and Maintenance and military and 
civilian pay.
    Question. Most enlistees enter the Delayed Entry Program (DEP) 
before reporting to duty. The services use the DEP to control the flow 
of recruits into training; the average time in the DEP is approximately 
four months. Does your service have to reach into the DEP sooner than 
anticipated because you are not making your recruiting mission? If so, 
explain how this impacts your overall recruiting mission.
    Army Answer. The Army has not had to reach into our DEP this fiscal 
year to make its accession requirements. We did not reach into our DEP 
last fiscal year so we can speak to the impacts. First, a decreased DEP 
creates a ``just in time delivery'' recruiting environment in which 
recruiters are potentially recruiting large numbers of individuals in 
the same month they need to access to training. This can cause 
recruiters and all levels of the command to focus on recruiting markets 
that are available to access now and potentially lose track of 
investing time in other recruiting markets, such as High Schools. 
Secondly, reaching into the DEP reduces the ``carry over'' into the 
next fiscal year, which adds to the overall recruitment mission for the 
coming year--not only would the command need to make its annual 
requirement, but it must also rebuild the DEP to acceptable levels. 
Both of these circumstances affect other aspects of recruiting in terms 
of command focus, resource requirements, advertising strategies, and 
use of the incentive program, to mention a few. It can take a year or 
two to recover from a decreased DEP. This fiscal year is a recovery 
year for Army recruiting. One of the major objectives this year has 
been to establish a stable recruiting environment for our recruiting 
force. The Army is on track this year to accomplish these goals.
    Navy Answer. Yes, we are having to reach into the DEP sooner than 
anticipated. By reaching into the DEP sooner than anticipated, the next 
fiscal year accession goal is in jeopardy.
    Marine Corps Answer. The extent to which we must reach out farther 
than desired in the DEP to making shipping numbers varies with the time 
of the year. There is a definite yearly recruiting cycle that drives 
the degree to which we must move recruits up in the shipping queue. In 
the summer shipping months, we are shipping recruits who just graduated 
from high school and who have been in the DEP since the previous 
summer. These applicants typically want to ship as soon after high 
school graduation as possible, making the demand for June, July and 
August shipping slots high. As a result, we do not have to reach out in 
the pool to move up recruits. As we enter into the winter and spring 
months, we often move up recruits to avoid large direct-contracting/
shipping requirements.
    We are not reaching into the DEP sooner than anticipated--we track 
pool development closely and are able to anticipate well in advance 
what actions are required to meet shipping requirements in any given 
month. It is fair to say that in the winter and spring months, we will 
reach farther into the DEP than we would like to, but not farther than 
we anticipate. The effects, however, of moving recruits up in the 
shipping queue during these months are generally good. First, moving 
recruits up reduces their change of attrition from the DEP. Second, it 
helps reduce recruit depot attrition since we can then avoid shipping a 
recruit who essentially has no time in the DEP (more time in DEP 
equates to better changes of succeeding in recruit training). Third, 
moving them up helps the individual recruiter quality of life since it 
takes them out of the direct market. And finally, it helps improve 
overall quality of recruits since recruiters are given more time to 
find a quality applicant to ship later and are less inclined to work 
with marginally qualified applicants in a rush to meet direct shipping 
requirements.
    Air Force Answer. No, it has not been necessary to reach into the 
Delayed Entry Program (DEP) early. Our goal is to enter the fiscal year 
with 43 percent of the enlisted accession goal already in the DEP. We 
entered Fiscal Year 1997 with 43.3 percent and Fiscal Year 1998 with 
44.1 percent in the DEP.
    Question. Have you had to lower your original recruiting goals for 
1998? If so, by how much?
    Army Answer. The Active component recruiting mission for 1998 is 
71,950. In October 1997, the 1998 mission was 77,500 (5,500 more). The 
Army's recruiting goal is ``floated'' throughout the year to ensure a 
``fixed'' Army end strength is achieved by the end of the fiscal year. 
Retention and attrition efficiencies have helped the Army to lower its 
recruiting mission. Current projections show that a recruiting mission 
of 71,950 will enable the Army to achieve its end strength goal.
    Navy Answer. No, the original recruiting goal has not been lowered. 
However, it is anticipated that the goal will be missed by 6,000 to 
7,200.
    Marine Corps Answer. The Marine Corps has not had to lower its 
recruiting mission this year. The Marine Corps has accomplished its 
recruiting mission and goals for 33 consecutive months. We have, in 
fact, increased our regular accession mission by 400 for Fiscal Year 
1998 from the original plan due to changes in the manpower plan.
    Air Force Answer. No, the Air Force recruiting goal for Fiscal Year 
1998 has not been reduced. The prior and non-prior service enlisted 
recruiting goal for Fiscal Year 1998 is 30,300.
    Question. What percent of recruits change their minds and ask to be 
released from their enlistment contracts?
    Army Answer. As you know, losses occur while enlistees are in the 
Delayed Entry Program (DEP) for a variety of reasons. Last fiscal year, 
9.4 percent of the individuals we contracted to join the service 
changed their minds or dropped out for reasons such as ``buyers 
remorse'' or a civilian job or educational opportunity. There are other 
valid reasons for an enlistee not to meet his or her commitment for 
enlistment. Many delayed entry enlistees may fail to graduate from high 
school, may incur medical conditions or test positive for drugs or 
alcohol at the time of physical examination, or may incur a legal 
problem or other factor that disqualifies them from military service. 
These are acceptable losses from a practical business point of view. We 
do seek to minimize losses of any type by maintaining the 
qualifications of our DEP members and by reconfirming the commitment of 
those who become concerned with their decision to enlist. We do, 
however, honor the decision of those applicants who firmly decide not 
to fulfill their contractual commitment. We feel this is consistent 
with our all volunteer force.
    Navy Answer. Nine percent of applicants in the DEP change their 
mind and ask to be released from their enlistment contract.
    Marine Corps Answer. Approximately 10% of contracted recruits in 
the Delayed Entry Program (DEP) change their minds and are categorized 
as ``Refusal to Ship'' (RTS). RTS composes approximately 35% of total 
DEP attrition. The remainder of DEP attrition is due primarily to 
failure to graduate; pursuit of higher education; pursuit of officer 
program; overweight; failure of the initial strength test; drug 
violation; medical disqualification; and police involvement.
    Air Force Answer. Fiscal Year 1999, 15.9 percent of recruits in the 
delayed entry program (DEP) dropped out of the program before entering 
active duty. The average DEP drop rate for fiscal year 1990 to fiscal 
year 1997 was 15.3 percent.

                      Recruiting Quality Personnel

    Question. Have your recruiters seen any evidence that the quality 
of recruits is declining among the enlisted accessions? Are we 
enlisting recruits with average or above-average aptitude levels and 
reading skills?
    Army Answer. The Army continues to meet the quality standards set 
by the Army and the Department of Defense. We have seen an increased in 
competition for the youth that we define as our ``Prime Market''--that 
is, the group that contains High School Diploma Graduates, scores in 
the top 50 percent of the Armed Services Vocational Aptitude Battery 
(ASVAB) test, and meets all physical and moral qualifications. Of all 
recruits, 67 percent must score in the top 50 percent of the ASVAB. 
These recruits are above the national reading and math norms as 
measured on the ASVAB. Finding these prime market prospects is 
increasingly difficult. Our recruiters have to wade through thousands 
of applicants who do not meet the requirements for entry into military 
service to find the prospects who do meet the qualifications. The 
quality of our recruits has remained high through our recruiters' hard 
work and through the programs that support the recruiting effort.
    Navy Answer. No, recruiters have not seen any evidence that the 
quality of recruits is declining. However, the recruiting environment 
is the most challenging since the inception of the All Volunteer Force. 
The quality standards for accessions are 95% High School Diploma 
Graduate (HSDG) and 65% Test Score Category I-IIIA (AFQT score of 50 or 
better). Test Score Category I-IIIA represents an above-average 
aptitude level.
     Marine Corps Answer. No. the Marine Corps Recruiting Command 
continues to consistently exceed the quality standards of 60 percent 
Mental Category I-IIIA and 90 percent Tier I recruits set by the 
Department of Defense. During Fiscal Year 97, the Marine Corps 
contracted over 66% Mental Category I-IIIAs (scoring above the 50 
percentile on the Armed Forces Vocational Aptitude Battery) and 96% 
Tier Is (high school graduates/equivalents). Although the Marine Corps 
does not specifically isolate and report ``reading skills'' scores, our 
high school graduate percentages and ASVAB test scores indicate that we 
are recruiting a high quality applicant.
    Air Force Answer. The Air Force uses two primary measures of 
accession quality: the Armed Forces Qualifications Test (AFQT) and the 
percent of recruits with high school diplomas. The AFQT measures an 
applicant's arithmetic reasoning skills, mathematics knowledge, word 
knowledge, and paragraph comprehension.
    The overall quality of Air Force accessions remains high. In fiscal 
year 1997, 79 percent of enlisted Air Force accessions scored in the 
top half on the AFQT and over 99 percent had a high school diploma. 
This is well above the DoD floor of 60 percent scoring in the top half 
on the AFQT and 90 percent high school graduates. In fiscal year 1998, 
there was a single percentage point decrease in the number of enlistees 
scoring above average on the AFQT (78 percent), but we continue to 
maintain a 99 percent high school diploma enlistment rate.
    Question. The military has a number of career fields which require 
greater responsibility and a more diverse workload. Since the majority 
of accessions are young high school graduates, the military is often 
their first full-time job. Do you have any concerns that high school 
graduates will be able to perform the more complex or difficult tasks 
with our increasing weapons technology?
    Navy Answer. The Navy channels applicants into skills based on AFQT 
scores and provides skill training as appropriate. Navy selection, 
classification and training continue to develop Sailors able to perform 
the more complex or difficult tasks with increasing weapons technology.
    Marine Corps Answer. All research conducted over the past 20 years 
indicates that applicants with a traditional high school diploma have 
the highest likelihood of completing their first term of enlistment. 
Graduating from a traditional high school demonstrates a certain degree 
of responsibility and shows that an individual is capable of success in 
a structured environment. As such, this is the best indicator of a 
recruit's ability to succeed in a military environment. To identify 
specific attributes, we administer the Armed Services Aptitude Battery 
(ASVAB) to all applicants. The results of this test are used to 
determine an applicant's suitability for specific technical and non-
technical fields and to place recruits in job specialties where they 
are qualified and will likely succeed. This combined with the self-
discipline and sense of responsibility instilled in recruit training 
adequately prepares young recruits for the difficult requirements of a 
technologically advanced military.
    Air Force Answer. While tasks in the Air Force are becoming more 
complex as technology advances, we are confident in the individuals we 
enlist and in the training they receive. In fiscal year 1997, 99 
percent of all enlistees were high school graduates and 79 percent 
scored in the top half of the Armed Forces Qualification Test. As in 
civilian industry, our enlisted personnel must be trained and 
experienced before being put to work.
    Each Air Force Specialty Code (AFSC) has five skill levels: 
apprentice, journeyman, craftsman, superintendent, and chief enlisted 
manager. Graduates of basic military training go on to advanced 
training tailored to a specific AFSC before being assigned to their 
first duty station. Some are awarded the apprentice skill level at the 
completion of this training, while others continue with on-the-job 
training at their first duty station before award of the apprentice 
skill level. Once a training level is completed, the member enters 
upgrade training for the subsequent level--provided they have attained 
the associated rank for that skill. The proper training foundation: 
supervised and certified up-grade training, and rank-skill linkage 
ensures individuals are given the appropriate tools to perform 
increasingly complex tasks.
    Question. Has the moral character or physical standards of new 
recruits declined in recent years?
    Army Answer. Rise in youth crime, reduced fitness of the youth 
population and other medically or morally disqualifying conditions 
(e.g. asthma, Ritalin usage, tattoo policies, etc.) certainly make the 
individual recruiter's job more difficult, but we have not lowered our 
recruiting standards to accommodate these trends. The Army has, in 
fact, increased the standards for enlistment. Our threshold for certain 
waivers has increased as medical policies have been reevaluated or the 
law has changed. Our waiver trends for both moral and physical 
standards are low and have remained unchanged. Additionally, to assist 
enlistees in preparing for the physical requirements of basic training, 
we include physical fitness programs as a mandatory component of our 
Delayed Entry Program (DEP) training events.
    We do need your help in obtaining legislation that requires the 
release of criminal history information from all local jurisdictions. 
Release should include juvenile as well as adult criminal records.
    Navy Answer. No, the moral character and physical standards have 
not declined in recent years, they have become more stringent.
    Marine Corps Answer. The moral character of our recruits has not 
declined in recent years. Our moral standards and associated waiver 
procedures continue to be the basis for training our recruiters and 
keeping them focused on the right types of applicants. Consistent with 
youth trends in general, the marijuana usage rate among applicants has 
risen in recent years and correspondingly more waivers are being 
granted for experimental marijuana use than in previous years. 
Applicants with experimental drug use are carefully screened and 
granted waivers only if they are otherwise exceptionally well 
qualified. The waiver process is investigative in nature and is 
designed to collect comprehensive information (both good and bad) from 
a variety of sources before a waiver determination is made. We look at 
the ``whole person'' when evaluating a waiver. Those who receive moral/
drug waivers are considered to have favorable qualities that outweigh 
their past indiscretions and as such are considered to be of 
sufficiently sound moral character to successfully make the 
transformation into a United States Marine. The physical conditioning 
of our recruits starts immediately upon enlistment into the Delayed 
Entry Program. Anywhere from 5-10% of applicants cannot pass an Initial 
Strength Test (IST), requiring our recruiters to work with them during 
their time in the DEP to prepare them physically for recruit training. 
Prior to shipping to recruit training, all recruits are required by 
Marine Corps Order to pass the IST. The percentage of recruits failing 
the IST at the recruit depots is small. Those failing are put into a 
physical conditioning platoon where they typically make quick strides 
and enter training in less than three weeks. Clearly our recruiters are 
faced with a more sedentary recruiting market. This challenge is 
overcome through proper screening and progressive preparation of the 
recruit while in the Delayed Entry Program.

                            Retention Issues

    Question. Career uncertainties, longer periods away from home, pay 
and benefit concerns, quality of life issues, and slower promotions are 
key factors affecting decisions of individuals to reenlist in the 
military. Approximately 51 percent of enlisted personnel have less than 
6 years of service, 45 percent have 6 to 19 years of service, and 4 
percent have more than 20 years. More than half of the enlisted force, 
53 percent, is in pay grades E1 through E4. What is your service doing 
to address and maintain a viable retention program?
    Army Answer. The Army retention program is a commander's program 
Commanders and Army Career Counselors are required by policy to 
interview soldiers on a regular basis to insure they are properly 
advised as to eligibility criteria, retraining opportunities, benefits 
programs, and other factors impacting on an Army career. Additionally, 
unit reenlistment training is mandated for all soldiers at least once 
annually. Soldiers also desire to be challenged and to pursue civilian 
education opportunities. Commanders throughout the Army tie education 
incentives into local reenlistment programs. The Army offers choice of 
duty station, either in the continental United States or overseas, and 
retraining options, consistent with available vacancies in the 
soldier's specialty. The Army has also shifted an additional 
$10,000,000 into the Selective Reenlistment Bonus budget at the start 
of this fiscal year to influence reenlistments in shortage and critical 
specialties and closely monitors promotions to assure soldiers are 
afforded reasonable opportunities to progress.
    Navy Answer. Navy has undertaken many initiatives to improve 
retention. We know that the most effective retention tools include 
increasing retention bonuses, improving advancement opportunity, 
maintaining PERSTEMPO/OPTEMPO within established goals, particularly 
between deployments, examining compensation effectiveness, and 
continuing our focus on quality of life improvements. We have already 
instituted a number of initiatives which include turning off our early 
out and first term conversion programs; continuing the use of the 
Temporary Early Retirement Authorization (TERA) to reduce overages 
which are stagnating Navy-wide advancement opportunity; and instituting 
a 3-prong effort to strengthen the effectiveness of our Selective 
Reenlistment Bonus program. SRB improvements include (1) gradually 
increasing the percentage of reenlistees receiving SRB, commensurate 
with pre-drawdown retention requirements; (2) increasing the Navy's 
maximum award levels to the authorized maximum of $45,000; and (3) 
seeking your support to lift the 10 percent cap on the number of 
Sailors to whom we can pay the maximum bonus.
    Marine Corps Answer. We maintain a viable retention program through 
the use of our Enlisted Career Force Controls (ECFC) program. This 
program is designed to actively shape the inventory of Marines by grade 
and MOS. A fundamental element of the ECFC is our First Term Alignment 
Plan (FTAP), whereby we set the number of first term reenlistments 
needed to meet our career force needs. We have met our FTAP goals for 
each of the last four years, and anticipate easily achieving the goal 
this year.
    The Selective Reenlistment Bonus Program (SRBP) assists in 
retaining the required number of first term reenlistments to meet the 
FTAP goal. Without the aid of the SRBP we would not be able to retain 
the requisite number of first term Marines in the right skills to 
fulfill our career force requirements. The SRBP and the FTAP working 
hand in hand are the programs we use to ensure we meet our retention 
requirements.
    Question. What incentives are needed to retain high quality 
personnel in each service?
    Army Answer. Retaining quality soldiers requires a competitive 
benefits and entitlement package, coupled with job satisfaction and a 
reasonable quality of life. Incentives vary with the individual soldier 
and often with the soldier's occupational specialty. Adequate Selective 
Reenlistment Bonus budgets are essential to induce soldiers in arduous 
or highly technical specialties to remain in the Army. Spousal 
satisfaction is a major factor among married soldiers. Adequate 
housing, medical care and post facilities, coupled with a competitive 
pay and benefits package, are the foundations upon which the retention 
program is based. The only incentives other than monetary are those 
geared toward soldiers' desires, such as a continental United States 
and overseas stations of choice, training of choice, and local 
education incentives. All these programs are subject to constraints of 
mission, occupational specialty, and budget.
    Navy Answer. The strong civilian economy and historic low 
unemployment have created a highly competitive civilian job market. 
These conditions, coupled with an increasing gap in pay and overall 
compensation, help push Sailors towards civilian jobs. We support 
soundly based Navy-wide compensation initiatives, as well as lifting 
the cap on the number of high tech Sailors to whom we can offer top 
Selective Reenlistment Bonuses.
    Additionally, as Navy transitions to a steady state force, force 
shaping tools will still be necessary. Extending authorization for the 
temporary early retirement (TERA) program would be highly beneficial, 
enabling Navy to reduce specific rating overages and improve Navy-wide 
advancement opportunity. Low advancement opportunity continues to be 
the number one dissatisfier on Navy exit surveys.
    Marine Corps Answer. Currently our career force continuation rates 
meet or exceed our planned Fiscal Year 1998 estimates. However, with 
the current economic growth and low unemployment rates it is becoming 
exceedingly difficult to compete with the civilian sector.
    One incentive we utilize to the greatest extent possible is the 
Selective Reenlistment Bonus Program (SBRP). Generally, we have 
difficulty retaining our highly technical Military Occupational 
Specialties (MOSs). Offering cash incentives (SRBP) to these MOSs 
assists us in retaining enough Marines to maintain our full combat 
capability.
    Non-monetary incentives are also an important factor in retaining 
quality Marines. Challenging work, real responsibility, and a sense of 
appreciation for their sacrifices are all factors in the retention 
equation. Stability in compensation and retirement programs are also 
essential elements in maintaining a consistent message to our Marines 
as an expression of commitment for their sacrifices.
    Air Force Answer. A wide range of monetary and non-monetary 
incentives are required to retain high quality people.
    Fair and competitive pay is the primary and most visible retention 
incentive. Recent CSAF Quality of Life survey results indicate only 16 
percent of the enlisted force and 22 percent of the officers thought 
their AF pay was as good or better than in the private sector. A pay 
raise above the statutory Employment Cost Index (ECI) level would be 
viewed as a first step toward establishing comparability with private 
sector pay raises. The timing is right for adoption of full ECI pay 
raises or an above statutory pay level raise for fiscal year 1999 
(i.e., strong economic conditions). Unfortunately, funding such an 
increase is outside Air Force resources and would require congressional 
support.
    Equally important to Air Force members is the preservation of the 
value of the retirement system and benefits. The reforms of the 1980's 
effectively reduced the lifetime value of retirement by 25 percent. The 
three retirement plans in effect for today's members are Final Basic 
Pay (50 percent of final base pay at 20 years), High-3 (50 percent of 
the average of the three highest years of base pay at 20 years) and 
Military Retirement Reform Act (MRRA) (40 percent of base pay at 20 
years). During the past four years, there have been 17 separate 
proposals to reduce retirement benefits further. Many of our young 
members say they are not convinced the system in effect today will be 
there when they retire. We are beginning to see the implications of a 
reduced retirement benefit on retention. Enlisted members under the 
Final Basic Pay or High-3 retirement plans ranked retirement as the 
number two factor influencing their decision to stay as opposed to a 
number six ranking for those falling under the Military Retirement 
Reform Act (MRRA) in effect today. Officers under the Final Pay or 
High-3 plans ranked retirement as the number one factor keeping them in 
the Air Force, while those under the MRRA ranked retirement number 
five.
    The Air Force also uses two unique monetary incentives to retain 
highly skilled enlisted members: the Selective Reenlistment Bonus (SRB) 
and Special Duty Assignment Pay (SDAP). The SRB program provides 
monetary incentives for reenlistments in certain skills. The program 
also encourages first-term airmen to retrain into shortage skills. We 
increased the number of skills that we pay an SRB from 41 in fiscal 
year 1995 to 88 in fiscal year 1998 (amount paid has increased from $23 
million to $33 million). The SDAP program provides monetary incentives 
for those assigned to extremely demanding duties with an unusually high 
degree of responsibility (e.g., Combat Controllers, Pararescue, 
Recruiters, and Military Training Instructors).
    ACP and ACIP (the pilot bonus and flight pay) are incentives used 
to retain pilots and navigators. The incentives are particularly 
important considering decreased pilot retention and projected pilot 
shortages. The Air Force is also participating in an OSD-led Aviation 
Compensation Review and supports a career pay for enlisted aircrew 
members. The fundamental idea behind the Career Enlisted Flight 
Incentive Pay (CEFIP) is to increase compensation for career enlisted 
aircrew members to attract and retain career aviation enlisted 
personnel.
    It is also important to couple monetary programs with non-monetary 
initiatives that target Quality of Life programs. Balancing the impact 
of tempo rates has become a retention issue. Tempo rates have increased 
four-fold since 1989 even though the Air Force is 36 percent smaller. 
In fiscal year 1997, 16,400 people were deployed around the world. In 
fiscal year 1998, that number has risen to approximately 20,000. 
Providing access to quality health care; safe, adequate and affordable 
housing; enhancing community support; and expanding educational 
opportunities are all examples of important non-monetary incentives 
that help retain high quality people.
    We are working hard to address these non-monetary issues. To reduce 
tempo, we have begun world-wide sourcing of aircraft to distribute the 
burden evenly and introduced a stand down program to allow members to 
become reacquainted with their families after a long deployment. Under 
health care, we will fully implement TRICARE by June 98 and we have 
added Health and Wellness centers at all bases. During fiscal year 
1997, we eliminated all gang latrine dorms and we began our new ``1+1'' 
standard for dormitory residence. To enhance community support, we 
added 85 new NCOs to our Family Support Centers to assist the families 
of deployed members and we are working hard to increase our capacity 
for child care. Finally, we are continually expanding our educational 
opportunities. Not only does this provide a better quality Air Force 
member, but education programs were listed as three of the top five 
reasons people stay in the service. Tuition assistance was ranked 
number one, off-duty education at Air Force locations ranked number 
four and the Community College of the Air Force ranked number five.
    It is difficult to pinpoint one or two specific incentives that 
will retain quality people. It is the additive effect of the many 
different programs, working in concert, that will retain quality 
people.
    Question. What percentage of first and second termers eligible for 
reenlistment does your service try to retain?
    Army Answer. Retention in the Army is not based on a preset 
percentage, but is determined by mandated endstrength, attrition rates, 
and the Recruiting Command's new accessions. The historical (pre-
drawdown) initial term retention rate of 42 percent of soldiers 
reaching their separation date is the generally accepted gauge of 
success. For mid-career soldiers (those who have reenlisted at least 
once, with less than ten years active service), the historic rate used 
is 70 percent. The actual percentage of each category that must be 
retained may actually fluctuate based on factors mentioned above. Since 
fiscal year 1994, the Army has had to retain approximately 48 percent 
of initial termers and 74 percent of mid-careerists to maintain end 
strength.
    Navy Answer. Navy does not have specific reenlistment goals. We 
have long term, steady state goals for 1st, 2nd and 3rd term retention 
of 38 percent, 54 percent and 62 percent. They are not goals for fiscal 
year 1998 or fiscal year 1999 and may not even be achievable by the 
year 2000, depending on uncontrollable factors such as civilian pay and 
unemployment rates.
    Marine Corps Answer. Our first term reenlistments are based on our 
career force continuation rates and career force (E5-E8) structure. The 
Marine Corps ideal force structure is based on a 32 percent enlisted 
career force structure (four or more years of service) and a top 6 
grade structure of 52.2 percent. As such, we need to retain roughly 
4,600 first term Marines annually. Approximately 21-24 thousand first 
term Marines are eligible for reenlistment; therefore, our annual first 
term reenlistment goal is between 19 and 22 percent.
    Since our first term reenlistments are based on career force 
continuation rates we have no second term reenlistment goal. Career 
force Marines may be granted reenlistment authority as long as they 
continue to meet our high reenlistment standards and service limit 
criteria.
    Air Force Answer. Our overall reenlistment goal for eligible first-
term airmen is 55 percent and for eligible second-term airmen is 75 
percent.
    Question. Are the percentages for reenlistment declining? If so, 
explain how it has changed.
    Army Answer. Prior to fiscal year 1992 (fiscal years 1984-1991), 
the Army's initial term average retention rate was 42 percent. The mid-
career average retention rate was 70 percent.
    In fiscal year 1992, the rates fell to 30 percent and 62.5 percent, 
respectively, which was expected since various drawdown programs 
purposely reduced retention. Rates rose in fiscal year 1993, again as 
expected, since soldiers who did not voluntarily participate in early 
out programs were inclined to reenlist. The fiscal year 1993 rates rose 
to 46.1 percent and 75.6 percent, respectively. Initial term rates have 
steadily increased to the current rate of 54 percent.
    Mid-career rates have remained at or above the pre-drawdown 70 
percent level since fiscal year 1993, but there are some concerns. 
After a high rate of 75.6 in fiscal year 1993, the rate declined to 
73.8 percent in fiscal year 1994 and 72.8 percent in fiscal year 1995.
    In fiscal year 1996, the rate fell to the pre-drawdown level of 70 
percent. Bonus reductions and slow promotions, caused by Military 
Personnel Account shortfalls were major factors in the rate decline. 
Bonuses were increased in fiscal year 1997 and fiscal year 1998 and 
promotions have also been on track since fiscal year 1997. We also 
permitted soldiers in grade E4 to remain on active duty an additional 
two years (10 years rather than 8 years). All these factors resulted in 
higher mid-career retention in fiscal year 1997 (75 percent) and fiscal 
year 1998 through the first quarter (70 percent). The Army believes 
rates will level off. Volatile endstrength and outside factors are 
always a concern, but the recent higher rates have been encouraging.
    Navy Answer. Reenlistment rates for first, second and third termers 
all dropped from fiscal year 1995 thru fiscal year 1997. First quarter 
fiscal year 1998 reenlistment figures are on an upward trend for first 
and second termers, while third term reenlistment rates were impacted 
by the front loading of almost one thousand fiscal year 98 TERA 
retirements:

------------------------------------------------------------------------
                                     1st Term     2nd Term     3rd Term
------------------------------------------------------------------------
FY95.............................        57.7%        60.3%        92.3%
FY96.............................        54.0%        58.7%        84.9%
FY97.............................        50.4%          57%        82.9%
FY98 thru Dec....................        59.2%        60.6%        81.2%
------------------------------------------------------------------------

    Marine Corps Answer. Our reenlistment percentages are not declining 
but are remaining stable. Our first term reenlistments are based on our 
career force continuation rates and career force (E5-E8) structure. 
Consequently, the Marine Corps reenlistment goal is only for first term 
Marines. With a relatively stable career force structure (52.2 percent 
in the top 6 enlisted ranks) our first term reenlistment goal remains 
relatively constant between 19 and 22 percent of our first term EAS 
population. Over the past four years we have achieved our first term 
reenlistment goal and our current statistics indicate that we will 
attain our fiscal year 1998 goal.
    Air Force Answer. Yes, reenlistment percentages are declining. The 
first-term reenlistment rate is down 5 percent over the past five 
years: 61 percent (FY 93) to 56 percent (FY 97), but still above the 
goal of 55 percent. The first-term reenlistment rate for the first two 
quarters of FY98 is steady at 56 percent.
    The second-term reenlistment rate has declined 11 percent over the 
past five years (82 percent in FY93 to 71 percent in FY97), dropping 
below the goal of 75 percent in fiscal year 1997. The second-term 
reenlistment rate for the first two quarters of fiscal year 1998 is 70 
percent.
    The career airmen reenlistment rate has declined 2 percent over the 
last five years: 97 percent (FY93) to 95 percent (FY97) and has held 
steady at the goal of 95 percent into the first half of fiscal year 
1998.
    We are closely monitoring second-term reenlistment. The Air Force 
has more than doubled the number of skills eligible for Selective 
Reenlistment Bonuses. In fiscal year 1995, 41 skills were identified 
costing $24 million, and in fiscal year 1998, 88 skills were identified 
costing $33 million. We are also aggressively working various Quality 
of Life programs.
    Question. At what percentage do you need to maintain your second 
term reenlistment rates in order to avoid gaps in your mid-level 
experienced people?
    Army Answer. The actual retention rate needed to sustain the mid-
level force fluctuates somewhat. Based on recent experience, however, a 
retention rate of 74 to 75 percent appears to be the rate at which 
desired manning levels can be achieved. Currently, the Army is 
attaining desired retention rates, but bonus and incentive programs 
must be maintained at or above current levels to sustain those rates.
    Navy Answer. Navy does not manage to specific reenlistment rates. 
Second term retention is about four percentage points less than 
desirable in the steady state, however, Navy is still carrying a 
surplus of Sailors with nine years or more of service. We will continue 
our force shaping initiatives, including judicious use of the Selective 
Reenlistment Bonus, to target specific skill shortages.
    Marine Corps Answer. The Marine Corps maintains a second term 
reenlistment rate of approximately 60 percent. If there are any 
fluctuations in second term reenlistments, the Enlisted Career Force 
Control manager adjusts the first term reenlistments as necessary. As 
such, the Marine Corps' first term reenlistments are based on our 
career force continuation rates and career force (E5-E8) structure. 
Currently our career force continuation rates are relatively high and 
our career force top 6 structure remains constant at 52.2 percent. 
Consequently, the Marine Corps focuses its reenlistment efforts on the 
first term force.
    First term reenlistments are governed by the First Term Alignment 
Plan (FTAP). The annual FTAP determines the number of first term 
marines (by MOS) required to reenlist to support our career force 
needs. Over the past two fiscal years the FTAP reenlistment requirement 
has remained steady at approximately 4,600 Marines.
    The Selective Reenlistment Bonus Program (SRBP) assists in 
retaining the required number of first term reenlistments to meet the 
FTAP goal. Without the aid of the SRBP we would not be able to reenlist 
the requisite number of first term Marines to fulfill our career force 
requirements (FTAP). Overall, the SRBP and the FTAP working hand in 
hand allow us to meet our retention requirements.
    Air Force Answer. In the aggregate, our goal is to retain 75 
percent of our reenlistment eligible second-term members. The fiscal 
year 1997, the second-term reenlistment rate was 71 percent. The fiscal 
Year 1998 (first two quarters) second-term reenlistment rate was 70 
percent. Current skill-level manning is:
    3-Level (First-Term Airmen) 102%, 5-Level (First and Second-Term 
Airmen) 93%, 7-Level (Career Airmen) 106%
    We are making up for shortages in 5-Levels resulting from decreased 
second-term reenlistment rates by (1) increasing accessions and (2) 
allowing overages of career airmen to remain.
    The 70 percent second-term reenlistment rate reflects the 
aggregate. In the disaggregate, some Air Force Specialty Codes (AFSCs) 
are feeling the effects of lower second-term reenlistment rates more 
than others and gaps are developing. For example, Air Traffic 
Controllers, F-16 Crew-Chiefs, Aircraft Electronic Warfare Systems 
Operations, Combat Controllers and Pararescue are a few of the 
specialties that are below the 75% second-term goal.
    To combat this downward trend in second-term reenlistments, the Air 
Force has taken a series of actions. First, we increased the number of 
skills eligible to receive Selective Reenlistment Bonuses (SRBs). In 
fiscal year 1996, 41 specialties received the bonus ($24 million), but 
in fiscal year 1998, 88 specialties are eligible ($33 million). We have 
also limited retraining out of certain shortage specialties and 
developed specialized recruiting programs for unique AFSCs like Combat 
Controller and Pararescue. The combination of efforts like these will 
help turn the corner on second-term reenlistment.
    Question. What impacts do high turnover rates have on unit cohesion 
and readiness?
    Army Answer. Army personnel turnover rates have not varied within 
at least the past ten years from a range of 10-12 percent per quarter. 
In fact, this is the Army's historical turnover rate. Army planning 
takes this historical turnover rate into account. As would be expected, 
the recent continuation of the Army's historical turnover rate has not 
adversely affected unit readiness or morale.
    However, the Army has been forced to pay special attention to the 
recent increased rates of unit deployment tempo (DEPTEMPO) which have 
resulted from an increased number of contingency operations, such as 
Bosnia and Kuwait. Careful management of both the units selected for 
training and operational deployments, and the programs that assign 
soldiers to/from those deploying units, has minimized the adverse 
impact of DEPTEMPO and turnover rates on either unit readiness or 
quality of life.
    Navy Answer. Clearly, a high turnover rate can be disadvantageous. 
However, its impact is dependent upon the size of the unit. Individual 
units work very closely with the Navy's distribution system, as well as 
their Fleet type commanders, to minimize the impact of personnel 
turnover on unit readiness.
    Marine Corps Answer. The Marine Corps is, by nature, a young force. 
Over 69 percent of our enlisted Marines are serving in their first 
term, resulting in a high turnover rate which is detrimental to unit 
cohesion. To counter this, we have implemented a ``Unit Cohesion 
Program'' to foster unit integrity, improve training and enhance 
readiness. The Unit Cohesion Program seeks to optimize the initial 
enlistments of our young, first term force by stabilizing the Marines 
in a unit for the duration of their initial enlistment.
    We have found that the productive life-cycle of an infantry Marine 
(after boot camp and follow-on MOS training) is about 42 months. To 
foster cohesion during this life-cycle, we are informing squads of 
Marines in boot camp and keeping them together through MOS training and 
subsequent assignment to an infantry battalion where they are likely to 
participate in two, six-month deployments. Additionally, this year we 
have expanded our Unit Cohesion Program across several other combat 
arms occupational fields; in the near term, we plan to expand this 
program across all occupational fields. These efforts are having an 
immediate positive impact on unit readiness.
    Air Force Answer. The majority of turnover in the Air Force is not 
caused by retention problems. Units experience the majority of turnover 
from personnel moves generated by the overseas and professional 
development requirements of our airmen. Whatever the cause, high 
turnover in a unit does create an increased training requirement.
    While this has a minor impact on unit cohesion and readiness, it 
has a large impact on the overall workload in a unit. Our people must 
cover for their fellow workers who are in-processing, out-processing, 
in-transit, or in training. In a time of already high TEMPO, this 
additional workload is difficult to manage and can lead to retention 
problems.

                            Personnel Tempo

    Question. Gentlemen, what is the average time your soldiers/sailors 
are TDY, or away from home during the year for training, exercises or 
deployments?
    Army Answer. In fiscal year 1997, the average time deployed for 
those soldiers deploying on TDY/Temporary Change of Station orders was 
125 days. This represents a decrease from the 196 average days deployed 
in fiscal year 1996. The primary reasons for the reduced average was 
the decreased individual deployment lengths in Bosnia, and a 
proportional decrease in the number of soldiers that deployed there in 
fiscal year 1997.
    In fiscal year 1996, the average tour length in Bosnia was 233 
days. Bosnia accounted for 65 percent of the total worldwide deployed 
population. In fiscal year 1997, the average tour length in Bosnia was 
164 days. Bosnia accounted for 50 percent of the total world deployed 
population. Furthermore, the average deployment length to locations 
other than Bosnia was less than 90 days.
    Navy Answer. The average Navy unit spends approximately 41 percent 
of the time away from home. This number is within the Navy's goal of 
spending less than 50 percent time away over a five year period.
    Marine Corps Answer. Historically, Marines have been and remain 
deployers; readily able to respond when the nation calls. Marines 
deploy as units, and thus, the Marine Corps tracks unit deployment 
tempo or DEPTEMPO in relation to a scheduled cycle. Our DEPTEMPO is 
defined as time accumulated by a unit as periods of 10 days or greater 
away from their home station during a given period. The time away from 
home station will vary depending upon where a unit stands relative to 
its next scheduled deployment and associated training work-ups. The 
Marine Corps goal is 180 days or less deployed per unit per 12-month 
period. The Marine Corps strives for a two to one turnaround ratio or 
at least 12 months between each unit's 6-month deployment.
    In order to better grasp DEPTEMPO and what is considered to be 
normal rotational cycles, following is as an illustrative example for 
infantry battalions:
    During any part of a 12-month period, there are 6 infantry 
battalions deployed with MEU(SOC)s or the Unit Deployment Program to 
Okinawa. Training work-ups coupled with the subsequent 180-day normal 
deployment length experienced by naval forces will routinely exceed the 
180 goal if solely measured over a single 12-month period. Marine Force 
Commanders monitor the DEPTEMPO of their forces, taking appropriate 
action to adjust or change schedules when necessary. Schedules are 
reviewed over the course of a three-year period; the past year and two 
future years. This ensures a balance within the projected schedule, 
evenly distributing DEPTEMPO throughout like units of the operating 
forces. The Marine Corps schedules are geared to ensure the continuing 
provision of forward deployed units to support the CINCs requirements 
while maintaining a rotational training and deployment cycle.
    Air Force Answer. The Air Force desired maximum tempo rate is 120 
days TDY per individual, per 12 months. In fiscal year 1997 Air Force 
people averaged 31 days TDY away from home while aircrew members 
averaged 50 TDY away from home. The average number of Air Force members 
deployed at any given time fiscal year 1997 was 14,600. As of 10 April 
1998 there were 20,453 Air Force members deployed.
    However, these numbers do not tell the whole story. The Air Force 
has nearly 80,000 people forward based that require a rotational base 
at home. In addition, the 14,600 average who were deployed are taken 
from a deployable population that is less than the total end strength. 
When viewed in this light the Air Force has over 40 percent of the 
deployable force forward based/deployed. This results in a significant 
tempo problem which is affecting retention and readiness.
    The tempo for some career fields is much higher than the average. 
For example, 29 percent of Communications/Cable Systems Technicians 
have over 90 days TDY in the last 12 months and 22 percent have over 
120 days TDY in the last 12 months. Similarly, 38 percent of AWACs 
Weapons Directors have over 90 days TDY and 22 percent have over 120 
days.
    Question. Explain how your service manages personnel tempo 
(PERSTEMPO) so it does not have an adverse impact on individual unit 
readiness and training of your people. What systems are in place to 
track PERSTEMPO information?
    Army Answer. The Army's PERSTEMPO measurement is a combination of 
skill tempo (SKILLTEMPO--individual training) and deployment tempo 
(DEPTEMPO--unit deployments). SKILLTEMPO, reported in the Standard 
Installation/Division Personnel System, is the percent of time spent on 
``out of station operational deployments'' by individual, Military 
Occupational Specialty and skill level. DEPTEMPO, reported on the Unit 
Status Report, records the average number of days within a one-month 
period that unit personnel have spent ``away from their bunks'' on 
training, exercises, or operational deployments.
    In fiscal year 1997, the Chief of Staff of the Army (CSA) 
established a DEPTEMPO goal (unit deployments) of no more than 120 days 
per year. All units projecting 120 days deployment or more over any 12-
month period are individually monitored by Headquarters, Department of 
the Army. Army units projecting annual deployment rates exceeding 180 
days require CSA approval to execute deployments.
    The Army continues to spread deployment requirements across the 
force, but with the recognition that some units and soldier 
specialties, by virtue of their mission and skills, will be required to 
deploy more frequently. Army policy, as of February 23, 1998, provides 
a period of stabilization for soldiers returning from an operational 
deployment away from their permanent duty station. Soldiers deployed as 
individuals or within units for a period of at least 30 days as part of 
an operational mission will, to the greatest extent feasible, be 
provided a stabilization period upon return equal to one month of 
stabilization for each month of deployment. In the case where a soldier 
is reassigned from outside the continental United States to within the 
continental United States (CONUS), the soldier retains the unused 
portion of stabilization authorized prior to the soldier's return from 
overseas and will carry it over to the gaining CONUS commander. 
Implementation and management of this policy is the responsibility of 
commanders in the field.
    Navy Answer. The Navy's PERSTEMPO program has been in effect since 
1985. This unit-level system consists of three guidelines:
     a maximum deployment of six months, portal to portal.
     a minimum Turn Around Ratio (TAR) of 2.0:1 between 
deployments.
     a minimum of 50 percent time in homeport for a unit over a 
five-year period (three past/two projected).
    CNO personally approves PERSTEMPO exception requests, which are 
submitted only after Fleet CINCs have first exhausted all available 
options.
    Units in excess of 50 percent out of homeport over 5 years are 
placed on a CNO watchlist for close monitoring.
    Marine Corps Answer. The Marine Corps time-tested rotational unit 
deployment system has been successful in keeping Personnel Tempo 
(PERSTEMPO) at manageable levels by applying proper scheduling to 
minimize personnel impact. By nature, Marines are deployers, and we 
must be readily able to respond when the nation calls. As frequent 
deployers, we must ensure that TEMPO is equal among the type units 
which comprise our deploying forces. Although the Marine Corps does 
into specifically track individual PERSTEMPO, every Marine's 
accumulated deployed time (ADT) and overseas control date (OCD) are 
tracked within our assignment process. These measures enable manpower 
planners to establish a queuing process for future dependents-
restricted overseas assignment tours.
    Instead of PERSTEMPO, the Marine Corps tracks unit Deployment Tempo 
(DEPTEMPO), because we train, deploy and fight as units, not as 
individuals. By controlling unit DEPTEMPO through effective scheduling, 
the tempo of individual Marines will also be controlled. The Marine 
Corps depends upon our local unit commanders to assign Marines to 
deploying detachments in an equitable manner in order to ensure that 
individuals are not over-deployed. The Marine Corps tracks and displays 
its DEPTEMPO data as part of the Joint Monthly Readiness Review (JMRR) 
process, which is also displayed in the Quarter Readiness Report to 
Congress (QRRC).
    Air Force Answer. The Air Force recently developed the Tempo 
Tracking System to collect temporary duty (TDY) data on all personnel. 
We established a desired maximum TDY rate for a 12 month period of 120 
days per individual. The Tempo Tracking System is available to all 
commanders and allows them to sort TDY data by unit, Air Force 
Specialty Codes (AFSC), rank, major weapon system, and social security 
number.
    To manage high tempo rates, the Air Force:
     Implemented global sourcing of our low density/high demand 
assets to spread the deployment burden throughout the Air Force (for 
example, now tasking units in the Pacific and U.S. for Northern Watch 
rather than just units in Europe)
     Continues the use of Reserve Component volunteers
     Reduced time in JCS exercises by 15 percent
     Initiated post-deployment stand downs
     Reduced standard aircraft rotations in Air Combat Command 
from 90 to 45 days
     Reduced Operational Readiness Inspections by 10 percent in 
fiscal year 1998 and plans to reduce another 30 percent by fiscal year 
1999
     Eliminated Quality Air Force Assessments and awarded units 
inspection credit for real-world deployments
    Question: Are there certain units or mission skills that are being 
continually stressed with either normal deployments, training, 
exercises, or for contingency operations? If so, describe which skills 
or units are being ``stretched thin.''
    Army Answer. Global Military Force Policy (GMFP) is an office of 
the Secretary of Defense initiative established in 1996. The objective 
of GMFP is to define the maximum peacetime deployment tempo level that 
can be sustained indefinitely by low density, high demand assets 
without adverse impact on readiness. The Army currently has seven 
capabilities on the GMFP list: PATRIOT, Special Forces, Rangers, Civil 
Affairs, Psychological Operations, Special Operations Aviation, and 
Special Operations Signal.
    The Army internally monitors low density units and Military 
Occupational Specialties (MOSs) for high demand. As of December 1997, 
the following units and MOSs had the highest skill tempo rate of those 
deployed. It is important to note, however, that MOSs move in and out 
of this group depending on the type of deployments being conducted. 
Units: Military Police; Postal; Engineer (Heavy Construction); Medical; 
and Water Purification; Movement Control. MOSs: 77W (Water Treatment 
Specialist); 37F (Psychological Operations Specialist): 67S (OH-58, 
Helicopter Repairer); 93B (Aeroscout Observer); 96H (Imagery Ground 
Station Operator); 51K (Plumber); 13R (Field Artillery Firefighter 
Radar (Operator); 27X (Patriot Missile Repairer); 35C (Surveillance 
Radar Repairer); 52F (Turbine Engine Driven Generator Repairer); 97E 
(Interrogator); 45B (Small Arms/Artillery Repairer); 51R (Interior 
Electrician); 67V (Observer/Scout Helicopter Repairer); and 62F (Crane 
Operator).
    Navy Answer. Overall our seas manning is generally adequate. 
However, manning in certain technical ratings, such as Operations 
Specialist, Fire Control Technician, Aviation Ordnanceman, Intelligence 
Specialist and Data Service Technician, as well as General Detail 
Sailors (GENDETs) (minimally skilled Sailors) is below desirable 
levels. Full funding of the MPN account will help Navy prevent 
personnel gaps and shortages and the extension of drawdown tools, such 
as Temporary Early Retirement Authority, will allow Navy to continue to 
shape the force by reducing manning for ratings that are over-manned 
and increasing the areas that are undermanned.
    Although we generally remain within personnel tempo (PERSTEMPO) 
limits, certain units are stretched thinner than others. These include 
Tactical Electronic Warfare (EA-6B), Airborne Early Warning (E-2C), 
Maritime Patrol (P-3), and Special Project (RP-3, EP-3) units.
    Marine Corps Answer. The Marine Corps does not currently have any 
units or military occupational specialties (MOS's that are continually 
over-stressed from deployments, training, exercises or contingency 
operations. With that said, there are times that unplanned 
contingencies may exacerbate the stresses felt by our lower density, 
high-tempo skills. For example, linguists, some communications skills 
and the EA-6B aircraft community would fall into this category. These 
MOS's are highly technical and/or require lengthy training pipelines, 
both of which make it difficult to sustain healthy inventory levels.
    Generally, the communication, intelligence, and some aviation MOS's 
are ``stretched thinner'' when compared to the remainder of their 
fellow Marines. For example, the EA-6B electronic warfare community, as 
a national asset, is a frequently deployed, yet specialized community 
within the Marine Corps. This ``high demand-low density'' unit type 
requires technicians with specialized skills to maintain the sensitive 
and high tech electronics equipment. We now manage EA-6B deployments 
under the Secretary of Defense's (SECDEF's) Global Military Force 
Policy (GMFP) program which ensures SECDEF approval is granted prior to 
deploying these units beyond their sustainable, long term ability. 
Overall, these high demand/low density MOS skilled personnel become 
stressed for numerous reasons, as we have already stated above. By 
limiting the length of tours to 3 years, the Marine Corps can ensure 
that fresh personnel with these high demand MOS's share in the 
deployment requirements at the same pace as their fellow Marines.
    Air Force Answer. The Air Force tracks and evaluates 730 personnel 
skill areas. Of these, 23 are presently receiving heightened management 
attention:
     Communication Cable Systems Communications
     AWACS Weapons Director
     Pararescue
     Combat Control
     Aerospace Control & Warning
     Aircraft Flight Engineer
     Special Vehicle Maint. (Fire truck)
     Special Vehicle Maint. (Refueling)
     Special Operations (Non-Rated)
     Aircraft Loadmaster
     Communication Antenna Systems
     Security Forces
     Satellite & Wideband
     Slavic Crypto
     Services
     In-Flight Passenger Service
     Fire Protection
     Fuels
     Air Transportation
     Munitions Systems
     Communication Computer Systems
     Supply Management
     Information Management
    Additionally, the Air Force monitors crewmembers assigned to 43 
combat weapons systems supporting current operations. Of these, 26 
warrant increased management attention:
     F-15E
     F-15C
     C-130
     C-17
     KC-135
     RC-135
     MH-53
     HC-130
     E-3 (AWACS)
     F-16H
     F-16L
     C-9
     C-5
     KC-10
     MH-60
     AC-130
     ABCCC
     EA-6B
     F-16GP
     A-10
     C-21
     C-141
     U-2
     MC-130P
     HH-60
     EF-111 (retired 1 May 1998)
    The workload varies by weapon system, and many of the systems 
tasked in support of contingency operations receive focused management 
attention under the Secretary of Defense's Global Military Force 
Policy. Because of the additional stress incurred by many of our 
aircrews and support personnel, the Air Force has introduced a number 
of initiatives to provide a measure of relief for our people, 
including:
                      POST DEPLOYMENT INITIATIVES
     Post deployment stand downs (1 day ``down'' for each 7 
days deployed; up to 14 down days maximum)
     Implemented temporary duty/deployment tracker
     Reduced Joint/Air Force Exercises
     Reduced Operational Readiness Inspections (by 10% in FY98; 
30 percent in FY99)
     Eliminated Quality Air Force Assessments
                   AIRCRAFT UNIT ROTATION INITIATIVES
     Global Sourcing--adjudicates CINC taskings across the 
Combat Air Forces
     Global Military Force Policy--establishes limits on 
tasking of selected low density/high demand assets for contingency 
operations
     Shortened deployments from 90 to 45 days duration for 
aviation units world-wide
    Question. Personnel tempo also affects those personnel who remain 
behind at the home station when units deploy. Describe some of those 
impacts. For instance, are they working more hours per week?
    Navy Answer. The Navy is currently supporting contingency 
operations within regular deployment schedules. However, if the Navy 
were required to maintain the two carrier presence in the Persian Gulf 
indefinitely, a condensed Inter Deployment Training Cycle (IDTC) would 
be required which would decrease the amount of time our deploying 
Sailors spend at home. Condensing the IDTC would also reduce the time 
allotted to complete the necessary maintenance, repairs and training 
required in order to ensure deploying units were combat ready. This 
means the Sailors ashore who support the deploying units would have to 
work harder and longer in a condensed period of time to ensure the 
supported units were ready to go.
    Marine Corps Answer. During these challenging and busy times, the 
Marine Corps continues to answer each time the nation calls. Yet high 
operational tempo has a price--higher usage of aging equipment results 
in increased maintenance, and increased man-hours spent repairing 
equipment which equates to less time and money available for training, 
and possible degradation of readiness.
    Marines performing maintenance duties frequently work twelve to 
sixteen hours per day, six to seven days per week on overlapping and 
rotating shifts, in order to sustain the ninety-two percent ground 
equipment and seventy-seven percent aviation equipment readiness we are 
currently attaining. Aviation maintenance Marines work around the clock 
to provide safe and mission capable aircraft to support their buddies 
on the ground. Our motor pools, artillery gun parks and amphibious 
vehicle ramps are busy places. They find Marines working long hours to 
maintain the high readiness on equipment that is older than most of the 
mechanics working on it. The ``maintenance tempo'' is high; but again, 
through the hard work and dedication of our Marines, we remain ready 
despite high operational tempo.
    Air Force Answer. Since 1986, the Air Force has downsized by nearly 
40 percent, while experiencing a four-fold increase in our operational 
commitments. Airmen who remain behind at the home station are working 
extended duty days and expanded duty weeks to keep the home station 
running. According to the fiscal year 1997 Quality of Life Survey, the 
average work hours per week, for all members, increased from 47 in 
fiscal year 1996 to 50 in fiscal year 1997.
    Question. Explain the personnel policies that are in place for your 
service which minimize redeploying an individual or a unit soon after 
returning to their home station.
    Army Answer. On February 23, 1998, the Army implemented the 
Deployment Stabilization Policy. A key feature of the new policy is 
stabilization from repetitive deployments, enabling our soldiers to 
enjoy a period of time to become reacquainted with their families and 
providing them time to readjust to their living and working 
environment.
    The Army continues to spread deployment requirements across the 
force, but with the recognition that some units and soldiers 
specialists, by virtue of their mission and skills will be required to 
deploy more frequently. Army policy, as of February 23, 1998, provides 
a period of stabilization for soldiers returning from an operational 
deployment away from their permanent duty station. Soldiers deployed as 
individuals or within units for a period of at least 30 days as part of 
an operational mission will, to the greatest extent feasible, be 
provided a stabilization period upon return equal to one month of 
stabilization for each month of deployment. In the case where a soldier 
is reassigned from outside the continental United States to within the 
continental United States (CONUS), the soldier retains the unused 
portion of stabilization authorized prior to the soldier's return from 
overseas and will carry it over to the gaining CONUS commander. 
Implementation and management of this policy is the responsibility of 
commanders in the field.
    We must ensure continued readiness of the Force, and the care of 
our soldiers and their families. This stabilization policy will help 
limit the adverse effects of continual and repetitive deployments.
    Navy Answer. In October 1985, Navy initiated a concerted effort to 
eliminate excessive operating tempo (OPTEMPO) for ships and aircraft 
squadrons and ensure a reasonable personnel tempo of operations 
(PERSTEMPO). The program balances our requirements to support national 
objectives, with reasonable operating tempo and quality of home life 
for our naval personnel. The PERSTEMPO/OPTEMPO program is built around 
three specific goals:
    --Maximum deployment length of six months.
    --Minimum 2.0:1 Turn Around Ratio between deployments.
    --Minimum of 50 percent time in homeport for a unit over a five 
year period.
    FLTCINCs are required to submit a quarterly report to CNO 
encompassing the five year PERSTEMPO/OPTEMPO cycle. If a unit is 
projected to violate the criteria, an exception message with detailed 
justification must be forwarded to CNO along with a recommended course 
of action to bring the OPTEMPO/PERSTEMPO back in line with the 
established limits.
    Marine Corps Answer. The Marine Corps measures and tracks its tempo 
in the same manner that it trains, deploys, and fights--as units, not 
as individuals. We measure Deployed Tempo (DEPTEMPO), not Personnel 
Tempo (PERSTEMPO). DEPTEMPO is accumulated time deployed during a given 
annual period. This accumulated time is the number of days deployed 
starting at periods of ten days or more away from home station. Our 
goal is 180 days or less deployed per unit per 12 months, when looked 
at over a 36 month time period. We strive for a two to one turnaround 
ratio or at least 12 months between each unit's 6 month deployment. 
Every Marine's accumulated deployed time (ADT) and overseas control 
date (OCD) are tracked within our assignment process. These measures 
enable manpower planners to establish a queuing process for future 
dependents-restricted overseas assignment tours.
    With most contingencies that the Marine Corps responds to being 
absorbed by our forward deployed forces, tempo should remain manageable 
in the future. We will be able to maintain and sustain readiness in the 
face of this constant tempo by continuing to use our time-tested and 
effective rotational deployment scheme, and making adjustments as 
necessary.
    Air Force Answer. We aggressively manage tempo to ensure time away 
from home is minimized and deployments are fairly distributed. The Air 
Force desire is to limit the total number of days an individual is on 
Temporary Duty (TDY), to no more than 120 days within a 12 month 
period.
    Our Tempo Tracking System enables commanders at all levels to 
manage their resources effectively. In cases where individuals are 
tasked, the Tempo Tracking System is used by the local squadron 
commander to fair share deployments among the members of his squadron. 
Air Force-wide, the tracking system is used to deconflict taskings, 
globally source taskings, and ensure that we fairly distribute taskings 
among MAJCOMs/squadrons.
    Not only do we track individuals to minimize redeploying them soon 
after returning home, we also work to account for the effects of 
deployments on Permanent Change of Station (PCS) moves. Our Tempo 
Tracking System automatically adjusts an individual's overseas return 
date for every overseas TDY of two or more days. This adjustment 
lessens the chance an individual will be chosen for an involuntary 
overseas assignment. After enough days have been served TDY overseas, 
an individual can get credit for an entire overseas PCS assignment. In 
an effort to emphasize equity, other personnel policies have been 
established to consider the impact tempo has on assignments.
     If an individual is selected for a consecutive assignment 
to a high-TDY unit (a unit performing more than 179 days TDY annually), 
they can request a cancellation or new assignment.
     Individuals are not selected for involuntary overseas 
assignments when they are on TDYs overseas or in the CONUS 
participating in a contingency, rotational, or exercise TDYs.
     Following an overseas TDY, an individual will not receive 
an involuntary overseas assignment within 120 days after completing the 
TDY.
    Question. We are relying heavily on the Reserve components to 
support the ongoing operations in Bosnia and Southwest Asia. Can you 
describe how their level of participation in operations in recent years 
has risen?
    Army Answer. Recent deployments for the Reserve components have 
included soldiers from both the Army National Guard and United States 
Army Reserve. Specific instances include participation in various joint 
exercises and in ongoing operations, such as Joint Guard and Operation 
Southern Watch. As part of our ``Total Force'' concept, the Guard and 
Reserve are indispensable to U.S. military operations. The Reserve 
component's participation in operations has risen as the Active force 
structure has reduced and the employment of the military has increased. 
Examples of the Guard and Reserve providing valuable support include 
the counter-drug effort, Partnership for Peace, and the overseas 
deployment training program. Over 2,000 mobilized reservists supported 
operations in Haiti, during 1994-1995. Since December 1995, nearly 
16,000 Guard and Reserve soldiers have mobilized in support of 
operations in Bosnia. Only recently, 65 Army National Guard volunteers 
returned from Macedonia, where the soldiers provided engineer, military 
police, and aviation support for six months to Task Force Able Sentry. 
Currently, there are 205 Reserve component soldiers mobilized to 
support operations in Southwest Asia.
    Marine Corps Answer. The Marine Corps Reserve is an essential part 
of the Marine Corps Total Force. Over the past several years the Marine 
Corps has increased its use of reserve forces in operational missions 
and contingency operations. The Marine Corps relies on Reserve 
component members to augment and reinforce our active forces during 
times of increased OPTEMPO. For example, Reserve Marines participated 
in operations such as Restore Hope (116 Reserve Marines), Sea Signal 
(535 Reserve Marines), and Uphold Democracy (49 Reserve Marines). 
Today, the Marine Corps is providing Reserve augmentation to Operation 
Joint Guard from our Reserve Civil Affairs Group. Reserve forces are 
integral to the accomplishment of the Combatant Commands' mission 
requirements.
    Air Force Answer. Since the end of the Cold War, our reliance on 
the Reserve Component has increased dramatically. From 1953 to 1990 the 
Air Force Reserve participated in a total of 11 contingencies. Over the 
last 7 years, participation has risen 76 percent as the Air Force 
Reserve engaged in 34 world-wide contingency operations. On average, 
over 1,000 Air Force Reservists and over 1,000 Guard personnel are 
deployed around the world every day.
    For the most part, the Guard has been able to rely on volunteers to 
support all operations in Southwest Asia since the Gulf War. Until 
June, 1996, this had also been the case in Bosnia; however, due to lack 
of sufficient volunteers to meet requirements for air traffic 
controllers (ATC), the majority of whom are provided by the Guard, a 
structured, rotational Presidential Selected Reserve Call-up was 
implemented and continues today for Guard ATC personnel.
    Question. What is your perception of the impact these continuing 
deployments have had on Reserve personnel, their families, and their 
jobs?
    Army Answer. The Army Reserve conducted several soldier retention 
studies that focused on the question of deployment impact. Generally 
the level of impact and effects on retention are influenced by a 
combination of issues, e.g., soldiers' families, employment situation, 
and employer support along with each deployment. Findings from the 
study, surveys and focus groups over the last two-year period reflect 
that deployment alone has not been a sole reason for leaving the US 
Army Reserve. However, they are concerned about repeated deployments 
for operations other than war and, the length of deployments, both of 
which affect their intent to remain in the Reserve.
    Generally, Army National Guard families do very well during 
mobilization and deployments. A number of factors contribute to this 
situation: trained volunteers; involved State Family Program Staff; 
soldier screening through personal interviews; and an active 
communication network. Guard families have continued to come far since 
Desert Shield and Storm, responding well to the demands of Guard 
deployments. This situation is attributed to the broad-based Guard 
Family Program instituted prior to Desert Shield and Storm. The 
National Guard Family Program invests a great deal of time and money to 
maintain the Guard family in a ready state in preparation for 
deployment. Additionally, ``Soldier-Screening'' is conducted 
immediately upon mobilization to identify soldiers and families of 
greater risk, who may not fare well during deployment. Investigation of 
the individual situations and, if appropriate, reassignment is 
practiced on a case by case basis. Units are brought back to authorized 
strength by ``cross leveling,'' using suitable volunteers from 
neighboring states and units to ``backfill'' those who cannot deploy 
due to temporary family factors. Hence, most potential problems are 
identified and mitigated before actual deployment. Through a combined 
strength of over 20,000 paid and volunteer staff, the communications 
network provides adequate coverage to ensure the quick flow of 
information, up and down, as well as laterally through the Family 
Program communication chain. This extensive family support network and 
infrastructure allows us to meet deployment family needs and hereby 
support the mission.
    During recent deployments, many Quality of Life issues have been 
identified and resolved. Unresolved issues are identified and are 
incorporated into the Army Family Action Plan and Guard Family Action 
Plan when not tasked to the proponent area of interest for resolution. 
Quality of Life issues are at the forefront of Army Guard concerns and 
will continue to be so.
    Navy Answer. The overall impact is a positive one. Although the 
recall authority is involuntary, the Navy has been successful in 
attaining Reservists who volunteer for these demanding assignments, and 
who upon completion of their duties, often request to extend under 
Active Duty for Special Work (ADSW). The Reserve community embraces the 
opportunity to seamlessly integrate with the active Navy.
    Marine Corps Answer. There have not been any negative effects that 
have been observed on Reserve personnel, their families, and their 
jobs.
    Air Force Answer. The Air Force Reserve conducted a command-wide 
survey in December and January to determine what impact high 
Operational Tempo is having on reservists, their families and their 
jobs.
    Overall, the survey indicated that employer and family support has 
remained relatively stable between 1994 and 1997; however, aircrews are 
experiencing a disproportionately higher level of stress resulting in 
greater job conflict, increased family problems, and decreased 
willingness to volunteer for reserve duty. Specifically:
     10 percent of all respondents (including 17 percent of 
aircrew) are considering leaving the Air Force Reserve due to problems 
their participation is causing in their civilian jobs.
     20 percent of respondents (including 44 percent of 
aircrews) indicated the Reserve is demanding too much additional time 
away from their civilian job.
     35 percent of respondents indicated the amount of time 
absent to perform Reserve duties is causing some family problems (one 
2.5 percent indicated serious problems). 57 percent of aircrews 
indicated family problems (only 5.0 percent indicated serious 
problems).
     Aircrews are slightly less willing to volunteer as often 
or for as long a period as indicated in 1994.
     Despite these problems, over 69 percent of respondents 
(including 76 percent of aircrews) are very satisfied with their 
reserve jobs. Fewer than 3 percent of respondents indicated they are 
very dissatisfied.
    With respect to our Air National Guard personnel, aside from 
isolated instances where we have had to use a Presidential Selected 
Reserve Call-up (PSRC), all deployed Guard personnel have been 
volunteers, and there has been minimal impact to their jobs, their 
families, or them. There have, however, been a few complaints from 
employers whose employees have volunteered for extended overseas 
deployments (30 to 90 days). We are working closely with employers 
through the Employer Support for the Guard and Reserve program to 
minimize/address these instances.
    Our primary concern is when, for example in Bosnia, we had to use 
the PSRC. Because the Guard owns 70 percent of the combat 
communications and 62 percent of the air traffic control assets across 
the Air Force, we were not able to obtain enough volunteers to meet 
requirements and thus had to deploy these personnel under the PSRC. 
They have been deployed since June 1996 and some units have had to 
deploy twice. When faced with a second 120-day military operation other 
than war tour within a 2-year period, our Guard personnel do experience 
decreasing family and employer support.
    Question. Do you believe Reserve recruiting and retention will 
suffer as the result of the Bosnia deployment, for instance?
    Army Answer. Currently there are no documented analyses into the 
effect these deployments have on Army Reserve recruiting. 
Notwithstanding the absence of hard data, there still exists a 
widespread perception that multiple deployments of units over time does 
have negative effects on local recruiting markets, although the effect 
on the national market is negligible. The major effects appear to be 
limited to markets that surround the more heavily deployed units. The 
impact of repeated deployments on soldiers, their families, and their 
employers could eventually have a negative effect on retention as well. 
Over time this could cause a serious erosion in deployability of the 
very units that are most needed.
    Navy Answer. No. The overall sense of accomplishment is high and 
the Active and Reserve component are working side by side to provide 
valuable, real-time support to the war-fighting CINCs.
    Marine Corps Answer. No. We do not believe that Marine Corps 
Reserve recruiting and retention will suffer as a result of the Bosnia 
deployment.
    Air Force Answer. People are the heart and soul of any 
organization. This is especially true for the Air Force Reserve and Air 
National Guard. Both the Reserve and Guard attempt to recruit and 
retain men and women who are best qualified and able to meet mission 
requirements; provide them with opportunities for development and 
advancement and a safe working environment; and ensure they communicate 
effectively with families and employers. Quality of life is a 
significant factor.
    In addition to their civilian jobs, our citizen-airmen perform 80-
120 days of military duty per year, depending on their mission area. 
This puts stress on families and employers, which in turn puts stress 
on our members and affects their job performance. Although we do not 
believe overseas deployments have negatively impacted our recruiting 
and retention, we are paying close attention to some specific areas. 
For example, due to insufficient volunteers to support our air traffic 
control operation in Bosnia, a mission supported primarily by the 
Guard, we have had to use a Presidential Selective Reserve Call-Up.

                              Medical Care

    Question. The Military Health Services System (MHSS) is changing 
from a fee for service health care program (CHAMPUS) to a managed care 
system called TRICARE. TRICARE is now being provided in most of the 
regions of the country. This transition has caused some anxiety and 
confusion among beneficiaries. How satisfied are you with the medical 
care of the service? Do the troops like TRICARE?
    Navy Answer. I'm extremely pleased with the innovative methods the 
men and women of Navy Medicine are developing to keep our Sailors and 
Marines healthy, fit and on the job. ``Taking Healthcare to the 
Deckplates;'' and, ``Moving Information, Not People;'' are two of the 
Navy Surgeon General's four goals which have greatly improved customer 
service to our people throughout the world. Taking healthcare to the 
deckplates means taking care of Sailors and Marines as close to their 
units as possible so they can stay on the job. It means providing care 
in mobile vans at pierside, in aviation squadrons, at base gyms, in 
barracks and in the operational environment. Navy Medicine is also 
using technology to move information, not people. Instead of moving 
Sailors and Marines closer to specialized care, our medical people are 
using preexisting technology to bring health care closer to them. 
Today, telemedicine has become an alternative to MEDEVAC flights, not 
only saving time and money, but providing advanced and specialized 
healthcare to our people serving on ships and in remote locations.
    TRICARE is a drastic change in the way health care services have 
traditionally been provided to our people and, as with any change, can 
be unsettling. Implementation of TRICARE has not been fully completed, 
however the medical personnel of all three services are working 
together to address the concerns of our customers. Despite the expected 
difficulties in seeing through such a major undertaking, the initial 
statistics are promising. Enrollment in TRICARE has been greater than 
original estimates and the disenrollment rate is less than one percent.
    Marine Corps Answer. TRICARE is a profound and fundamental change 
in the way we provide health care services and as with any change it is 
unsettling and causes anxieties for some of our troops. UnSECNAV has 
appointed a task force to develop strategies for simplifying TRICARE 
and improving understanding. BUMED is committed to working to resolve 
problems. A TRICARE customer advocacy program demonstration was 
implemented in mid-1997. As service members become more familiar with 
TRICARE and some of its complexities are addressed, we believe TRICARE 
will be better received.
    Air Force Answer. I am confident that the quality of Air Force 
medical care is second to none.
    Unfortunately, the transition to TRICARE, which will be fully 
implemented this summer, is causing concern and confusion among active 
duty members. Air Force Quality of Life survey results attest to this, 
showing only 44 percent of the enlisted and 53 percent of the officers 
expressed satisfaction with medical care for both themselves and their 
families. However, the Quality of Life survey went to active duty 
personnel around the globe, even though TRICARE has not yet been 
implemented worldwide. We feel more meaningful and positive results 
will be generated once TRICARE has been in place worldwide for one to 
two years.
    Those areas where TRICARE is firmly established have shown 
significantly higher satisfaction with medical care among active duty 
members as compared with the Quality of Life survey. The lastest DoD 
Satisfaction Survey showed 74 percent of enlisted and 89 percent of 
officers who have actually used the TRICARE system have rated 
satisfaction as good to excellent. Therefore, we expect continued 
education about, and greater familiarity with, TRICARE to have been an 
increasingly positive impact on satisfaction.
    Question. Do you get many complaints from the troops about medical 
care? What types of complaints?
    Navy Answer. I have received complaints associated with the TRICARE 
program. However, we must keep in mind the TRICARE is not fully 
implemented and, like any new program, has experienced some start up 
problems. The Assistant Secretary of Defense (Health Affairs) and the 
three Surgeons General are working aggressively to address and solve 
the key concerns of our troops: portability; improving access to care 
for geographically separated units; solving billing concerns; and, 
claims processing in order to make the system more customer-focused and 
user-friendly.
    Marine Corps Answer. It is true that the transition from CHAMPUS to 
TRICARE has resulted in some confusion and anxiety which have been 
manifested in the form of complaints. The majority of the complaints 
have targeted the system and not the medical care received. The 
Secretary of Defense/Health Affairs Office has initiated action to 
ensure issues such as access for those in remote locations, enrollment, 
billing, and services are promptly addressed.
    Air Force Answer. Our men and women value greatly the medical care 
they receive. However, there is some anxiety about TRICARE. In spite of 
initial problems with the program start-up, Air Force people are very 
satisfied with the medical care they are receiving under TRICARE 
(active duty members are automatically enrolled). A recent DoD Health 
Care Satisfaction Survey given to individuals who have actively used 
TRICARE showed 74 percent of enlisted members and 89 percent of the 
officers rated their level of satisfaction as good as excellent. Of 
particular note, the quality of medical care received ranked the 
highest of all categories.
    Retired individuals 65 years and older have voiced dissatisfaction 
with the military health care systems due to diminishing space-
available care. The Air Force supports the DoD's efforts to continue 
pursuing legislation for full Medicare Subvention, which would allow 
older retirees to participate in TRICARE. Additionally, we support DoD 
in studying alternatives for these Medicare-eligible beneficiaries.
    Question. What is your impression of the medical care programs for 
dependents?
    Navy Answer. I believe we have a good medical program for our 
dependents where TRICARE is fully implemented and working. TRICARE 
Prime offers the least expensive option for our Active Duty Family 
Members (ADFMs). Prime enrollment data reveals robust enrollment among 
ADFMs. Retiree enrollment is also strong. Recent trends are encouraging 
with enrollment rising and patient satisfaction increasing. 
Additionally, the vast majority of Prime enrollees are re-enrolling. 
While encouraging, I believe we could make the system more ``user-
friendly'' by automatically enrolling ADFMs in TRICARE Prime at our 
MTFs and eliminating annual reenrollment. This would simplify the 
process and help our young Sailors and their families. However, seniors 
not eligible for TRICARE Prime feel disenfranchised from the system. 
Expanding the Mail Order Pharmacy Benefit for Medicare-eligibles is 
affordable and the right thing to do.
    Marine Corps Answer. Enrollment data reveals robust participation 
among active duty family members. Recent trends are encouraging with 
patient satisfaction increasing. We continue to work hard to overcome 
confusion and simplify TRICARE.
    Air Force Answer. Our medical care program for dependents, TRICARE, 
provides high quality, cost effective health care. the TRICARE 
standard-of-care requirements are extensive and continuously evaluated 
for compliance. As a result, TRICARE offers excellent health care for 
our families. TRICARE also offers family members three health care 
plans vice the single plan, CHAMPUS, previously available. The TRICARE 
standard option mirrors the old CHAMPUS program. TRICARE Prime is a 
Health Maintenance Organization option that offers the greatest cost 
savings to enrollees who agree to be treated solely through the TRICARE 
Prime system. TRICARE Extra is a Preferred Provider Organization option 
that offers reduced co-payments, compared to TRICARE Standard, to those 
who use only the providers in the network. These three options allow 
families to choose the health care plan which best meets their needs.
    Question. What feedback are you getting from the troops regarding 
the new dental plan?
    Navy Answer. Overall enrollment and satisfaction with the TRICARE 
Active Duty Family Member Dental Plan is good; attitude toward 
contractor, United Concordia Companies Incorporated by both civilian 
dentist and military family members has improved dramatically over the 
last 3 years. Navy and Marine Corps enrollment has remained constant 
over the last three years and is the highest of the military services. 
Contractor patient satisfaction survey indicates that 80% of enrolled 
beneficiaries rate the program Good or Excellent.
    The TRICARE Retiree Dental Program was implemented Feb 1998. 
Enrollment is strong, over 100,000 sponsors have enrolled during the 
first 6 weeks. Feedback is minimal as the program has been on line only 
6 weeks, but enrollment has been very brisk, exceeding both DoD and 
contractor expectations. Program appears to be very popular and much 
appreciated by the retired community.
    Our TRICARE Selected Reserve Dental Program was implemented in Oct 
97. Subscription to this program by all the services has been 
disappointing, less than 20,000 total military enrollment, and less 
than 5,000 Navy and Marine Corps enrollees. It may be too limited in 
scope of coverage to compete with dental insurance benefits offered by 
the employers of many reserve personnel.
    Marine Corps Answer. Overall, feedback indicates satisfaction with 
the new dental plan. The TRICARE Active Duty Family Member Dental Plan 
Beneficiary Survey revealed:
    (1) 59 percent of respondents reported satisfaction with the 
benefit and 79 percent stated they would recommend the plan to others.
    (2) Other positive responses included: the number of working 
dentists; ease of making an appointment; minimal travel distance to a 
provider's office; quality of care, claims processing, and complaint 
resolution.
    However, a few criticisms indicated a lack of sufficient 
orthodontic coverage, and that pediatric care is difficult to obtain.
    Air Force Answer. The Department of Defense and the Services have 
been tracking customer satisfaction with the TRICARE Active Duty Family 
Member Dental Plan (FMDP) since it changed contractors, on February 1, 
1996. Although the benefit package was unchanged, the transition was 
initially troubled by marketing, enrollment, and provider network 
development problems. As the Office of the Assistant Secretary of 
Defense (Health Affairs) (OASD(HA)) and the contractor addressed these 
issues, satisfaction increased. An October 25, 1996, memorandum titled 
``In Progress Review of the TRICARE Active Duty Family Member Dental 
Plan'' stated high beneficiary satisfaction with the FMDP and a 
significant decrease in the complaints. Overall, beneficiaries praised 
reductions in the claim processing times and the high quality of dental 
care. OASD(HA) directed an additional customer survey in June 1997. 
This telephone survey of 2000 beneficiaries in 12 TRICARE Regions 
showed over 80 percent satisfaction with the FMDP. The TRICARE Service 
Office in Denver, Colorado, continues to assess and improve the 
performance of the current FMDP contractor, United Concordia Companies, 
Inc.

                  Department of Defense Modernization

    Question. Last year, Congress provided approximately 
$81,000,000,000 for the Department of Defense (DoD) modernization 
program. The DoD fiscal year 1999 budget request for modernization 
program is over $84,000,000,000.
    Do you believe that there is enough emphasis in the fiscal year 
1999 budget on Army modernization programs? Why?
    Army Answer. The Army has developed a budget that adequately funds 
our programs consistent with our modernization strategy and within the 
existing fiscal constraints. The Army's fiscal year 1999 budget is 
approximately $1,700,000,000 above last year's President's budget 
submission. Based on fiscal constraints, the fiscal year 1999 
President's budget and Future Years Defense Program are adequate 
operationally and economically. An increase of approximately 
$1,000,000,000 is realized each year throughout the Program Objective 
Memorandum.
    Navy Answer. Increasing our investment to support the 
recapitalization and modernization of the Navy is essential to maintain 
operational primacy. Last year the QDR and the National Defense Panel 
validated the need for our forward expeditionary posture and the 
requirement to maintain a 12 Carrier Battle Group and a 12 Amphibious 
Ready Group structure, but with reduced combatant and submarine force 
levels. We are proceeding with our plans to equip ourselves with the 
weapons necessary to accomplish National Command Authority taskings 
from peacetime surveillance to full scale war.
    Marine Corps Answer. As the Nation's force in readiness chartered 
by the 82d Congress ``to be the most ready when the Nation is least 
ready,'' we have funded our top priority, near-term readiness. However, 
we have once again been forced by topline constraints to defer 
modernization--the future readiness of the Corps--as well as many 
quality of life programs, and funding for the infrastructure at our 
bases and stations in order to fund near-term readiness. As the 
Commandant has stated, we are quite literally mortgaging today's health 
at the expense of tomorrow's wellness, and have been for at least the 
last eight years. We are facing virtual block obsolescence of critical 
aging ground and aviation equipment which is becoming more and more 
expensive to maintain in terms of parts as well as manhours.
    For example, in the area of aviation, our CH-46E Sea Knight was 
first introduced to the fleet in the mid 1960s, and has an average life 
of over 30 years. Our CH-53D, which is also approaching 30 years of 
age, has exceeded its original projected life by seven to ten years, 
and our fleet of KC-130Fs is approaching 40 years of age, almost twice 
the original projected life. The V-22, replacement for our CH-53Ds and 
CH-46Es, was accelerated by the QDR, allowing us to procure 11 more 
aircraft within the FYDP than originally planned, however, we need to 
ramp up to the maximum economical rate of production as soon as 
possible after completion of the test phase. This budget allows for the 
necessary research and development to upgrade our UH1Ns and AH1Ws, 
however, actual procurement of this critical upgrades does not begin 
until FY 2002.
    In the area of ground equipment to support our Marines, while this 
budget initiates a reversal of the past years' historically low levels 
of modernization funding, the FY 1999 level is considerably below our 
historical average of $1.2 billion. Assuming no change in our topline, 
we begin to approach that level in the outyears; however, it is 
essential to note that it will take a long time to recover from the 
cumulative effects of low procurement levels necessitated during the 
budget deficit recovery years.
    We have used many approaches to mitigate the impact of these 
shortfalls. We have aggressively pursued improved business practices, 
bought used items like recapped tires instead of new ones, and 
remanufactured major aviation end items such as the AV-8B and the AH1W/
UH1N. We are pursuing the most cost effective options to replacing our 
aging fleet of ground equipment including the five ton truck, the 
HMMWV, and the howitzer. We have thus supported the QDR recommendation 
for a modest reduction in force structure to free up funds for needed 
modernization. I believe we have a cogent, common-sense approach to 
obtain a 21st century Marine Corps that will be effective, efficient, 
and affordable; but we cannot execute that plan without additional 
funds.
    We simply must improve modernization funding for our aviation and 
ground units if we are to sustain a ready, capable Corps in the next 
century. If we do not, today's modernization concerns will become 
tomorrow's readiness dilemmas.
    Air Force Answer. The FY99 President's Budget (PB) balances the Air 
Force goals of keeping people first, sustaining readiness, and securing 
time-phased modernization. The current Air Force modernization funding 
level within the Fiscal Year 1999 PB supports both Air Force goals and 
DoD's $60 billion procurement goal for Fiscal Year 2001.
    Question. Does your budget sustain your modernization efforts in 
the outyears? If not, what are the shortfalls?
    Army Answer. Yes, an increase of approximately $1,000,000,000 is 
realized each year throughout the Future Years Defense Program. The 
momentum will be continued through the outyears.
    Navy Answer. Our major modernization programs are on track. We 
constantly monitor and assess our readiness to determine the right 
fiscal balance among operations, modernization, and recapitalization 
accounts. The Navy's overall resources trend is projected to remain 
flat across the FYDP. Within these resources we are faced with four 
significant challenges: adequately funding current operations and 
forward deployed readiness levels, protecting quality of life 
initiatives for our sailors, modernizing existing assets, and procuring 
new platforms to recapitalize. Successfully meeting these challenges 
will depend on an ability to change the balance between warfighting 
forces and the activities that support them. The specific efficiencies 
proposed in the budget will be insufficient to fully reduce costs to 
the level necessary to overcome all these challenges. Congressional 
support and authority for further base closures is required so that we 
may eliminate excess overhead and use the savings to modernize and 
recapitalize the Navy.
    Marine Corps Answer. Over the last several years, topline 
constraints have forced us to make tough decisions in striking a 
balance between readiness, quality of life, and force modernization. 
For some time now, financing our top priority, near-term readiness has 
come at the expense of future modernization. There is an urgent and 
immediate need to modernize equipment for our ground and aviation 
units. If additional funds became available, I would accelerate 
procurement of several important ground and aviation programs.
    The FY 1999 request for procurement of ground equipment and 
ammunition is approximately fifty percent above the level appropriated 
for Fiscal Year 1998, allowing for the start of recapitalization of 
critical Fleet Marine Force equipment that is approaching the end of 
its useful life, as well as replacement of aging equipment with new, 
more capable equipment such as:
    --Lightweight 155mm Howitzer, the replacement for our almost 20-
year old, well-worn M-198 Howitzer;
    --Medium Tactical Vehicle Replacement (LTVR), a lightweight truck 
fleet upgrade for our almost 20-year old 5-ton trucks;
    --Light Tactical Vehicle Replacement (MTVR), a lightweight truck 
fleet upgrade for our aging HMMWV;
    --Jaevlin, our medium range, man-portable antitank weapon;
    --procurement of our short range anti-armor weapon, Predator; and,
    --upgrades to our C4I systems--to provide better, more reliable, 
more secure and more joint compatible C4 capability.
    While this budget initiates a reversal of the past years' 
historically low levels of ground equipment modernization funding, the 
FY 1999 level is still considerably below our historical average of 
$1.2 billion. Assuming no change in topline, the Marine Corps begins to 
approach that level in the outyears. It is essential to note, however, 
that it will take a long time to recover from the cumulative effects of 
low procurement levels necessitated during the budget deficit recovery 
years, and that while the projected levels in the outyears will allow 
for acceleration of procurement of some of our ground equipment, it 
will not fully satisfy Marine Corps requirements.
    Marine Corps equipment is aging and in many cases has exceeded its 
useful life. Maintenance costs are increasing and our Marines are 
working longer and longer hours to maintain aging equipment. The more 
time and money we spend on repairing equipment, the less we have to 
train Marines. We simply must maintain the increased levels of 
modernization funding we begin to see in the outyears if we are to 
sustain a ready, capable Corps in the next century. If we do not, 
today's modernization concerns will become tomorrow's readiness 
dilemmas.
    The situation is much the same for modernization in the area of 
aviation. Our CH-46E Sea Knight was first introduced to the fleet in 
the mid 1960's, and has an average age of over 30 years. Our CH-53D, 
which is also approaching 30 years of age, has exceeded its original 
projected life by seven to ten years, and our fleet of KC-130Fs is 
approaching 40 years of age, almost twice the original projected life. 
The V-22, replacement for our CH-53Ds and CH-46Es, was accelerated by 
the QDR, allowing us to procure 11 more aircraft within the FYDP than 
originally planned, however, we need to ramp up to the maximum 
economical rate of production as soon as possible after completion of 
the test phase. This budget allows for the necessary research and 
development to upgrade our UH1Ns and AH1Ws, however, actual procurement 
does not begin until FY 2002.
    Air Force Answer. The fiscal year 1999 President's Budget (PB) 
reflects a balanced and time-phased Air Force modernization plan for 
current and future readiness. Our efforts to streamline the acquisition 
process have helped us to achieve this result within a flat budget 
environment. However, acquisition reform initiatives alone will not be 
enough to fuel our modernization program. We must also undertake 
efforts to reduce the cost of the defense infrastructure if we are to 
achieve our modernization goals efficiently.
    Question. What are your top modernization programs? Are they fully 
funded in the fiscal year 1999 budget request and in the outyears? If 
not, what are the shortfalls?
    Army Answer. The Army's goal of digitizing a Division by fiscal 
year 2000 and Corps by 2004 is our top initiative. Our digitization 
efforts include the ongoing modernization efforts of approximately 97 
systems encompassing 538 budget lines. The total estimate of the 
digitization effort is $2,600,000,000 in fiscal year 1999. The Army did 
not take this $2,600,000,000 from programs to create a new effort. It 
was already part of the Army Total Obligation Authority that was 
allotted to these many existing programs. Of this total, approximately 
$261,000,000 was added to digitization by Office of the Secretary of 
Defense for fiscal year 1999. The $261,000,000 provides for improved 
interoperability, increased integration, improved security, network 
management, and more robust common architectures. It is key to the 
horizontal efforts that go across these systems.
    Crusader and Comanche are the two major weapons systems programs 
that continue development of new platforms.
    Other top Army's dollar value modernization programs in the 
President's fiscal year 1999 budget are the Longbow Apache helicopter, 
the Abrams tank, and the Army Tactical Missile System/Brilliant Anti-
Armor Submunition. During the Future Years Defense Program (2000-2005), 
we will spend approximately $10,400,000,000 on those systems.
    Navy Answer. We have forwarded a plan for accelerated procurement 
of CVN 77, which will be the first new carrier of the 21st Century 
which will provide a vital bridge to our next generation carrier, CVX. 
The F/A-18 E/F Super Hornet promises a great future for carrier-based 
aviation. The Joint Strike Fighter is an integral part of our forward-
looking plan for naval aviation. The Surface Combatant 21 family, led 
by the multipurpose DD 21, with its focus on land attack, will help 
revolutionize the Navy's shipbuilding and warfighting strategy. Another 
exciting program we continue to develop is the Theater Ballistic 
Missile Defense capability that is embedded in our Aegis cruisers and 
destroyers. Our shipbuilding plan overall produces technologically 
superior ships such as DDG 51, LPD 17 and the New Attack Submarine. The 
average rate of production in the Future Years Defense Program (FYDP) 
is adequate in the near term to support the projected Fiscal Year 2003 
force of about 300 ships. However, beyond the FYDP, this rate of 
production will not permit us to maintain the required ship and 
aircraft inventory.
    Marine Corps Answer. For some time now, the Marine Corps has been 
financing its top priority, near-term readiness, at the expense of 
future modernization. There is an urgent and immediate need to 
modernize equipment for our ground forces and aviation units.
    While the fiscal year request for procurement of ground equipment 
initiates an upward ramp, allowing for the start of recapitalization of 
critical Fleet Marine Force equipment that is approaching the end of 
its useful life, as well as replacement of aging equipment with new, 
more capable equipment, the fiscal year 1999 levels is still 
approximately $500 million below our historical average of $1.2 
billion. Assuming no change in our topline, we begin to approach that 
level in the outyears; however, it is essential to note that it will 
take a long time to recover from the cumulative effects of low 
procurement levels necessitated during the budget deficit recovery 
years. We simply must increase ground equipment procurement funding if 
we are to sustain a ready, capable Corps in the next century. If we do 
not, today's modernization concerns will become tomorrow's readiness 
dilemmas.
    The situation is much the same for modernization in the area of 
aviation. Our CH-46E Sea Knight was first introduced to the fleet in 
the mid 1960's, and has an average age of over 30 years. Our CH-53D, 
which is also approaching 30 years of age, has exceeded its original 
projected life by seven to ten years, and our fleet of KC-130Fs is 
approaching 40 years of age, almost twice the original projected life. 
The V-22, replacement for our CH-53Ds and CH-46Es, was accelerated by 
the QDR, allowing us to procure 11 more within the FYDP than originally 
planned, however, we need to ramp up to the maximum economical rate of 
production as soon as possible after completion of the test phase. This 
budget allows for the necessary research and development to upgrade our 
UH1Ns and AH1Ws, however, actual procurement of this critical upgrade 
does not begin until fiscal year 2002.
    We have used many approaches to mitigate the impact of these 
shortfalls. We have aggressively pursued improved business practices, 
bought used items like recapped tires instead of new ones, and 
remanufactured major aviation end items such as the AV-8B and the AH1W/
UH1N. We are pursuing the most cost effective options to replacing our 
aging fleet of ground equipment including the five-ton truck, the 
HMMWV, and the howitzer, and we have supported the QDR recommendation 
for reductions in our active and reserve force structure in order to 
free up funds for needed modernization. I believe that we have a 
cogent, common-sense approach to obtain a 21st century Marine Corps 
that will be effective, efficient, and affordable but we cannot execute 
that plan without additional funds.
    Following is a list of our highest priority ground and aviation 
programs where we could use additional funding in fiscal year 1999. 
Each of these programs is currently financed in the budget or the 
accompanying FYDP but could be accelerated should additional funds 
become available. Please note however, that we have worked hard to 
intricately balance our request within the constraints of the 
President's Budget, and unless funds are available in addition to the 
present topline, we feel there is no better allocation of funds within 
Marine Corps accounts than that reflected in our budget request.

------------------------------------------------------------------------
                                                             (Dollars in
            APPN                         Program              millions)
------------------------------------------------------------------------
Aviation:
    APN.....................  MV-22 (1 Aircraft)...........        $78.0
    APN.....................  AV-8B (2 Aircraft + spares)..         43.1
    RDT&E,N.................  AV-8B Advanced Targeting FLIR         25.9
    APN.....................  CH-53E Night Vision System            30.0
                               ``B'' Kits.
    APN.....................  AV-8B A/C Mods (ALR-67                 2.3
                               Antenna).
    APN.....................  AH-1W Night Targeting System.         11.0
Ground:
    PMC.....................  Base Telecomm Infrastructure.         64.1
    PMC.....................  Light Tactical Vehicle                37.0
                               Replacement.
    PMC.....................  Mod Kits Tracked Vehicles....          4.6
    PMC.....................  Y2K Compliance/Computer               20.0
                               Replacement.
    RDT&E,N.................  Marine Corps Warfighting Lab.         10.0
    RDT&E,N.................  LW155 Howitzer...............          6.8
    RDT&E,N.................  Predator/SRAW................          4.0
    RDT&E,N.................  AAAV.........................          5.0
------------------------------------------------------------------------


    Air Force Answer. The fiscal year 1999 President's Budget (PB) 
allows us to modernize without sacrificing current readiness or 
creating outyear funding spikes in funding requirements. While no 
program is fully funded to achieve maximum efficiency, no program 
submitted in the fiscal year 1999 PB contains shortfalls. Individual 
programs are not ranked within the PB, however, some key programs 
within our core competencies are:
     Global Mobility: C-17
     Gl Attack: B-1 Conventional Munitions Upgrade Program and 
Defensive Systems Upgrade Program
     Precision Engagement: Procuring over 75,000 Precision 
Guided Munitions (Joint Direct Attack Munition, Sensor Fuzed Weapon, 
Wind Corrected Munition Dispenser, Joint Stand-Off Weapon, and Joint 
Air to Surface Standoff Missile); Joint Strike Fighter development
     Air and Space Superiority: F-22 Engineering and 
Manufacturing Development (EMD); Airborne Laser development; Space 
Based Infrared System EMD; Evolved Expendable Launch Vehicle EMD
     Information Superiority: Global Broadcast System
    Question. Are you concerned that near-term readiness is funded at 
the expense of long-term readiness? If so, what programs concern you 
the most? How would you reduce that risk?
    Army Answer. Our primary concern is balance. The Army must receive 
adequate and predictable funding to sustain its full spectrum 
capabilities and ensure our Nation remains versatile, flexible, and 
credible in response to crises around the world. Maintaining the 
delicate balance between requirements and resources is increasingly 
difficult. Funding must be adequate, sustained, predictable, and 
synchronized to meet the readiness, force structure and endstrength, 
quality of life, and modernization requirements of today and an 
uncertain future. With 13 consecutive real declines in Army budgets 
from 1985 to 1998, the Army has had to assume risk in certain areas and 
make tough choices to balance requirements with risks. Even with a 
marginal increase in fiscal year 1999, the Army must assume prudent 
risks in a number of areas. All Army requirements must vie for steadily 
decreasing resources in a world of steadily increasing operational 
requirements and uncertainty. Balance reduces both near- and long-term 
risk to the extent possible without any increases in resources. We are 
counting on achieving efficiencies to help mitigate the risk to current 
readiness. We must closely monitor our progress in these and to the 
extent that we lose buying power increases our risk to current 
readiness. We will closely monitor our Army unit readiness 
contributors, such as base operations, real property maintenance, and 
Army training, to maintain current readiness while preserving our 
future modernization activities.
    Navy Answer. In the near term, readiness is adequately funded. 
However, in the long term, the Navy is faced with significant 
challenges: modernizing existing assets and procuring new platforms to 
recapitalize in order to remain the premier Naval power of the world. 
Successfully meeting these challenges will be dependent on an ability 
to change the balance between warfighting forces and the activities 
that support them. We must continue to shed excess infrastructure, 
become more efficient in the manner in which we operate and support our 
forces, and make a larger proportion of funds available to support 
needed investments for long term readiness. The specific efficiencies 
proposed in the budget will be insufficient to fully reduce costs to 
the level necessary to overcome all these challenges. Congressional 
support and authority is requested for further base closures so that we 
may eliminate excess overhead and use the savings to modernize and 
recapitalize your Navy.
    Marine Corps Answer. Yes, I am concerned that near-term readiness 
is funded at the expense of long-term readiness. Over the last several 
years, topline constraints have forced us to make tough decisions in 
striking a balance between readiness, quality of life, and force 
modernization. For some time now, financing our top priority, near-term 
readiness, has come at the expense of future modernization. There is an 
urgent and immediate need to modernize equipment for our ground forces 
and aviation units.
    While the fiscal year 1999 request for procurement of ground 
equipment and ammunition is approximately fifty percent above the level 
appropriated for fiscal year 1998, allowing for the start of 
recapitalization of critical Fleet Marine Force equipment that is 
approaching the end of its useful life, as well as replacement of aging 
equipment with new, more capable equipment, the fiscal year 1999 level 
is still approximately $500 million below our historical average of 
$1.2 billion. Assuming no change is our topline, we begin to approach 
that level in the outyears; however, it is essential to note that it 
will take a long time to recover from the cumulative effects of low 
procurement levels necessitated during the budget deficit recovery 
years. We simply must increase ground equipment procurement funding if 
we are to sustain a ready, capable Corps in the next century. If we do 
not, today's modernization concerns will become tomorrow's readiness 
dilemmas.
    The situation is much the same for modernization in the area of 
aviation. Our CH-46E Sea Knight was first introduced to the fleet in 
the mid 1960's, and has an average age of over 30 years. Our CH-53D, 
which is also approaching 30 years of age, has exceeded its original 
projected life by seven to ten years, and our fleet of KC-130Fs is 
approaching 40 years of age, almost twice the original projected life. 
The V-22, replacement for our CH-53Ds and CH-46Es, was accelerated by 
the QDR, allowing us to procure 11 more within the FYDP than originally 
planned, however, we need to ramp up to the maximum economical rate of 
production as soon as possible after completion of the test phase. This 
budget allows for the necessary research and development to upgrade our 
UH1Ns and AH1Ws, however, actual procurement of this critical upgrade 
does not begin until fiscal year 2002.
    While I remain committed to fully financing our operating forces, I 
am concerned about trends in maintenance of our equipment which can 
impact readiness and quality life. High operational tempo and aging 
equipment have caused dramatic increases in the cost to maintain our 
equipment, both in terms of parts and manhours. The solution to this 
problem is replacement of our aging equipment.
    In terms of infrastructure, I am concerned about the maintenance of 
our bases and stations and about the continued underfunding of our 
military construction and family housing accounts. Funding in each of 
these areas remains austere, and under existing topline constraints, 
does no more than minimize the deterioration of our facilities. In 
spite of efforts to contain it, our backlog of maintenance and repair 
grows by approximately $60 million each year and exceeds $1 billion by 
fiscal year 2003, far exceeding the Marine Corps goal of $100 million 
by fiscal year 2010.
    In the area of military construction, our goal is to replace 
physical plant every 100 years by investing one percent of plant value 
in new construction. The Marine Corps budget as currently structured, 
provides for replacement of physical plant well in excess of every 150 
years.
    Additionally, we have a family housing deficit of approximately 
10,000 units. At projected funding levels, using traditional military 
construction methods, we will make little, if any progress toward 
elimination of this deficit. We are, however, using our limited 
resources to revitalize existing housing units and we are pursuing 
Public/Private Ventures (PPV) where feasible. If proposed PPV 
initiatives are successful, the 10,000 unit deficit should be 
eliminated by fiscal year 2034.
    We have used many approaches to mitigate the impact of these 
shortfalls. We have aggressively pursued improved business practices, 
bought used items like recapped tires instead of new ones, and 
remanufactured major aviation end items such as the AV-8B and the AH1W/
UH1N. We are pursuing the most cost effective options to replacing our 
aging fleet of ground equipment including the five-ton truck, the 
HMMWV, and the howitzer, and we have supported the QDR recommendation 
for reductions in our active and reserve force structure in order to 
free up funds for needed modernization. I believe that we have a 
cogent, common-sense approach to obtain a 21st century Marine Corps 
that will be effective, efficient, and affordable but we cannot execute 
that plan without additional funds.
    That said, please allow me to make two additional points. It is 
critical to the Marine Corps and to the Department of Defense that the 
supplemental request be funded ``above the line.'' Additionally, we 
have worked hard to intricately balance our request within the 
constraints of the President's Budget, and unless funds are available 
in addition to the present topline, we feel there is no better 
allocation of funds within Marine Corps accounts than that reflected in 
our budget request.
    Air Force Answer. The Air Force recognizes the necessity to balance 
near-term readiness against future readiness to ensure the ability to 
meet national security requirements. The FY99-03 program supports Air 
Force goals--people first, sustain readiness, and protect time-phased 
modernization. The Air Force budget is delicately balanced, with each 
of the goals linked to the others. The Air Force has increased funding 
for modernization programs as much as possible while still retaining a 
balanced Air Force.
    We are, however, concerned about contingency funding. Current 
readiness requirements could have an impact on our modernization plan, 
particularly contingency events and their drain on current operational 
accounts. Without supplemental funding to cover contingency operations 
in Southwest Asia and the Balkans, all programs are at risk for 
reprioritization. Supplemental funding gives us the best chance of 
maintaining a balance across all current accounts, as well as 
protecting future readiness and capability.
    In order to reduce the risk in a constrained budget environment, 
the Air Force must time-phase its modernization and carefully monitor 
impacts of current events on future readiness. But the solution is not 
limited to a focus on near-term vs. far-term readiness. The Air Force 
is burdened with excess infrastructure. Relief from this burden through 
additional base closures is needed to maintain an appropriate balance 
between people, readiness, and modernization programs.

                        Reprogramming O&M Funds

    Question. Could you explain to the Committee the importance of 
reprogrammings in the Operation and Maintenance (O&M) account to 
maintaining readiness?
    Army Answer. We provide O&M funding to our field commanders to 
perform their assigned missions. This funding covers readiness which is 
composed of three basic components: operating tempo (OPTEMPO), base 
operations, and real property maintenance. We fund OPTEMPO at 100 
percent of requirements to clearly articulate to the commanders the 
importance of their responsibility to remain trained and ready. Due to 
affordability, we are unable to fully fund the other components of 
readiness and expect field commanders to adjust their funding to ensure 
they can accomplish their missions. When the O&M budget is extremely 
tight, as it was in fiscal year 1998, and we expect it to be in fiscal 
year 1999, any decrements to the plan will throw off this delicate 
balance. The commanders then must migrate money to where it is most 
critically needed to allow them to remain trained and ready. 
Reprogramming allows the commanders the flexibility necessary to ensure 
all three components of readiness remain adequately funded while 
enabling the commander to react to emergent requirements.
    Navy Answer. The ability to reprogram funds within the Operation 
and Maintenance accounts is essential to ensure readiness can be 
maintained in a dynamic environment. It is crucial for the field 
commander's ability to respond to emergent requirements and CINC 
operations.
    From an operational standpoint, the ability to reprogram funds 
precludes potential stand down of essential installation activities 
while the commander awaits approval to transfer resources within the 
total provided for the fiscal year. For example, in FY 1997 because 
spare parts were being used at a higher rate than budgeted, the Navy 
realigned funds internally to avoid grounding aircraft and prevent 
readiness degradation. Under the current reprogramming requirements, 
the Navy would have to significantly reduce flying hour training 
activities pending receipt of the necessary approvals.
    Additionally, many times during a fiscal year, the CINCs must 
engage in the quick planning and execution of an emergent requirement 
such as experienced this fiscal year with increased operating tempo to 
support contingency operations. These activities typically require 
immediate action by the CINC and/or the Joint Chiefs of Staff and the 
Secretary of Defense in ordering the action, and by the Military 
Departments in finding resources necessary to undertake this unbudgeted 
operation. In executing these orders, funding sources must play a 
secondary role to the protection of life, limb and physical assets. The 
current funding constraints and reprogramming requirements are an 
impediment to timely action by the Secretary, Chairman, or CINC to 
fulfill the Department's responsibilities.
    Marine Corps Answer. The reprogramming restrictions, within the O&M 
appropriation that require Congressional approval are: Moves of $15 
million or more to or from a Budget Activity; Moves of $15 million or 
more to or from Operating Forces; Moves of $15 million or more to or 
from Depot Maintenance. Moves of $15 million or more to or from 
Maintenance of Real Property require Congressional notification. These 
restrictions have been imposed to improve Congressional oversight of 
these accounts and to help insure that O&M funds are expended in 
accordance with Congressional intent. Historically, the Marine Corps 
has executed the O&M appropriation in accordance with Congressional 
intent.
    The ability to reprogram within the appropriation is very 
important. This ability allows local commanders the flexibility to 
respond to and deal with emergent issues. In the recent past, the 
Marine Corps has dealt with hurricane damage, flood damage, contingency 
operations and an increasingly difficult recruiting atmosphere.
    The reprogramming restrictions in place for FY 1998 could impede 
timely execution of programs approved by the Congress and the ability 
to react to emergent requirements. In order to ensure Congressional 
limitations are not breached, Marine Corps commands may not realign any 
funding without the approval of Headquarters.
    Air Force Answer. The Air Force O&M Budget is carefully balanced to 
protect readiness. The O&M appropriations include a myriad of competing 
interdependent requirements that must be balanced within constrained 
fiscal limitations. Air Force operational commanders are charged with 
maintaining ready, trained forces within available funding; therefore, 
the Department's philosophy has been to decentralize financial 
resources to the commanders who have the responsibility for day-to-day 
operational decisions. Our wing commanders realign funds (within 
current reprogramming parameters) to meet their day-to-day mission 
requirements. The most efficient way they can react to changes such as 
emergency contingency operations, training or deployment requirements, 
or unforeseen base infrastructure needs such as environmental or real 
property requirements is to have the flexibility to realign available 
O&M funding.
    Question. The Committee is aware that the Senior Readiness 
Oversight Council recently met concerning the development of the 
reprogramming baseline for the Operation and Maintenance accounts in 
fiscal year 1998. What was the outcome of that meeting?
    Navy Answer. The response was favorable. With the endorsement of 
the Senior Readiness Oversight Council, coordinated briefings by all 
the Military Departments were provided to all Defense committee staffs 
in February and March 1998. The benefit of this dialogue was mutual in 
that the Committee staffs realized a greater appreciation for the 
impact of undistributed Congressional adjustments while the Military 
Departments were provided specific insights to Congressional Readiness 
concerns.
    Marine Corps Answer. For the Marine Corps, the calculation of the 
baseline was briefed and accepted without comment or question. Proposed 
realignments within the O&M appropriation are within approval threshold 
and within Congressional intent.
    Air Force Answer. The Senior Readiness Oversight Council met and 
concurred with the Air Force recommendation to set the fiscal year 1998 
baseline within the Operation and Maintenance appropriation.
    Question. Gentlemen, the Committee is aware that Department of 
Defense has significantly changed the Operation and Maintenance funding 
allocations compared to the allocations expressed in the Fiscal Year 
1998 National Defense Appropriations Act. Could you explain the 
adjustments that your services have made to the allocation of Operation 
and Maintenance funds?
    Army Answer. The most significant adjustments were from ground 
operating tempo (OPTEMPO) and real property maintenance to base support 
and land forces readiness. The adjustments were required to fund 
critical programs which were short of funds. This includes additional 
Active component support for the Reserve components training program 
and Force XXI initiatives, as well as across the board activities in 
base support. The impact on OPTEMPO was to reduce our program to 650 
miles, which we are watching closely to ensure we maintain readiness. 
One area where we did limit adjustments was in depot maintenance, and 
it was primarily left intact.
    Navy Answer. Quadrennial Defense Review (QDR) decisions subsequent 
to the submission of the Fiscal Year 1998 President's budget coupled 
with the application of Congressional undistributed adjustments 
provided for a net realignment of about $100 million among the budget 
activities. The allocation adjustments were made in concert with QDR 
decisions and to make executable those programs severely impacted by 
undistributed Congressional reductions.
    Marine Corps Answer. The Marine Corps has made few realignments. We 
believe all were within Congressional intent and authorized parameters. 
The realignments that we have identified were primarily 
reclassifications of costs or reflecting a decision to centralize 
funding of a program vice the originally planned decentralization 
(i.e., outsourcing and privatization investment costs).
    Air Force Answer. The Air Force distributed all Congressional marks 
as directed in the Appropriation Bill. Historically, we make several 
adjustments to the allocations to meet the full intent of the Congress 
and to balance the program for fact-of-life changes based on inputs 
from our field commanders. The most significant adjustment in fiscal 
year 1998 was the realignment of $224 million of the contingency mark 
(provided in one budget activity) to each budget activity where 
contingencies were actually programmed and expected to occur. In 
addition, we made several smaller fact-of-life adjustments based on 
emerging requirements to preclude us from taking draconian actions 
against programs with limited flexibility.
    Question. The Committee is aware that revised allocations have 
effectively reduced the amount of funding available for readiness 
related training, depot maintenance, and real property maintenance. 
What fact of life adjustments, or emergent service priorities, have you 
funded at the expense of those accounts that fund activities directly 
related to maintaining readiness?
    Army Answer. The major adjustments included adding funds to the 
Active component support for the Reserve components training program to 
bring it to a minimal level of funding; to the Korean Battle Simulation 
Center to ensure funding of planned requirements in this critical 
theatre; to Force XXI initiatives; to base support activities to 
prevent them from falling below barely adequate funded levels; and to 
recruiting and advertising to help meet near term accession goals.
    Navy Answer. Funds were reduced from ship depot maintenance and 
intermediate maintenance in a accordance with Quadrennial Defense 
Review decisions. Funds were added to ship inactivations and readiness 
areas such as ship operations, recruiting, and training.
    Marine Corps Answer. The Marine Corps has made no realignments from 
the identified readiness categories (i.e., the Activity Groups/Sub-
Activity Groups (AG/SAGs) for Operating Force, Depot Maintenance and 
Maintenance of Real Property) to fund emergent issues in other AG/SAGs. 
Marine Corps operating force commanders have made individual 
realignments from unit training to unit maintenance within the 
Operating Forces funding amounts to deal with emergent issues.
    Air Force Answer. Fact of life changes to the program were based on 
emerging requirements identified by our field commanders, including 
increased pilot production to mitigate our current shortfall and the C-
130 infrastructure funding transfer. Realignments after the 
Appropriation Act allocations were necessary to rebalance operations 
and maintenance across all programs while still allowing us to perform 
readiness-related training, depot maintenance and real property 
maintenance activities.
    Question. The Committee understands that there is an annual 
migration of funds from readiness related accounts into base operations 
support. Why? Is it your view that the Department systematically 
underfunds facilities and support activities?
    Army Answer. We provide Operation and Maintenance (O&M) funding to 
our field commanders to perform their assigned missions. This funding 
covers readiness, which is composed primarily of operating tempo 
(OPTEMPO), and includes base operations and real property maintenance 
(RPM) dollars. We fund OPTEMPO at 100 percent of requirements to 
clearly articulate to commanders the importance of the responsibility 
to remain trained and ready. Due to affordability, we are unable to 
fund full the other components of readiness. Nonetheless, we built a 
balanced fiscal year 1999 budget that fully funds OPTEMPO and funds 
Base Operations and RPM at an acceptable level of risk.
    When the O&M budget is extremely tight, as it was in fiscal year 
1998 and we expect it to be fiscal year 1999, any decrements to the 
plan (and/or new requirements) can upset this delicate balance. Facing 
tight budgets and decrements to the plan, field commanders then migrate 
funds from OPTEMPO accounts to pay congressional bills, ``must fund'' 
bills, base support shortfalls. To avoid breaking minimally funded 
programs, commanders must accept increased training risk by paying 
bills with OPTEMPO funds--their only flexible source.
    Navy Answer. The Department does not systemically underfund 
facilities and support activities. Nor is there an annual migration of 
readiness funds to the base operations accounts. Our base support costs 
are reflected in the budget submission to Congress and represent the 
minimum funds necessary to sustain daily operations of bases and 
stations and provide essential support for quality of life programs. 
Sometimes this minimum funding is adjusted as a consequence of 
Congressional action. When adjustments unacceptably impact execution of 
the program, we realign resources to meet the must fund requirements.
    This pattern of adjustment and realignment continued with the FY 
1998 appropriation and was addressed to the Senior Readiness Oversight 
Council and included in the briefings provided the Defense Committee 
staffs.
    Marine Corps Answer. The Marines Corps has historically not 
realigned funding from the O&M ``readiness accounts,'' primarily 
support for the operating forces, into base operations. We have made a 
deliberate effort in both programming and budget to fund readiness and 
quality of life accounts at sustainable levels and maintained this 
resolve through budget execution.
    Air Force Answer. The Air Force operations and maintenance budget 
maintains a delicate balance between readiness and quality of life 
within a constrained topline. While efficiencies and constraints 
continue in the Fiscal Year 1998 budget, the Air Force does not 
systematically underfund facilities and support activities. Commanders 
must have flexibility to accomplish readiness objectives within a 
constrained fiscal environment while at the same time meeting the 
emerging requirements. More and more, we have challenged our commanders 
to achieve readiness objectives while forcing them to cash flow issues 
for increased contingency requirements, natural disasters, and other 
real world events. Commanders must have the flexibility to ensure 
readiness is maintained while taking care of people and responding to 
myriad situations on a daily basis.

                     The Readiness Reporting System

    Question. Several different measures of training operations, the 
state of Department of Defense (DoD) equipment, and trends in military 
personnel suggest a decline in readiness. The Army reports that actual 
training operating tempo (OPTEMPO) will be nearly 25 percent below the 
Army goal in 1998; there appears to be an across the board problem in 
DoD with aviation mission capable rates; and all the services have 
noted recruiting and retention problems. It is not clear whether these 
problems will result in degradation of the reported readiness of U.S. 
forces under the current reporting system. Gentlemen, please explain to 
the Committee the indices the DoD currently uses to measure readiness.
    Army Answer. The Army employs the Joint Staff designed system known 
by the acronym ``SORTS'' for ``Status of Resources and Training 
System'' for individual unit status reporting. This system enables 
assessment of the current and planned distribution of resources within 
the organization designed to fulfill the requirements of the National 
Military Strategy.
    As much as possible, readiness assessments are based on 
quantifiable, objective measurement criteria, such as available 
personnel strengths, equipment fill rates, and specific training 
requirements. ``Personnel'' includes three subsets measures against the 
reporting unit's required personnel strengths; ``Equipment on Hand'' 
measures equipment on hand against equipment authorized; ``Equipment 
Serviceability'' measures how well ``on hand'' equipment is maintained; 
and ``Training'' is based on a commander's estimate of the number of 
training days required in order for the unit to be fully capable of 
performing the unit's mission essential tasks.
    In addition, commanders provide official comments in the Unit 
Status Report that address the availability of other training 
resources, such as fuel, ammunition, training areas, and funds, and any 
readiness perspective they consider important to communicate to the 
Army's senior leadership.
    Navy Answer. The Navy uses a variety of indices to determine unit 
level readiness such as the availability of people, training 
proficiency, material condition and operational availability of our 
ships and aircraft. Additionally, the Navy monitors other indices which 
measure the adequacy of resources from an overall perspective. Such 
indices include spare parts availability, aircraft and engine depot 
support as well as personnel accession, quality, and stability.
    Our readiness metrics have proven reliable in identifying 
deficiencies and we have been quick in taking corrective action when 
necessary. By continually expanding and improving our readiness 
measurements, we strive to enhance our detection capability and prevent 
readiness degradation before it occurs.
    Marine Corps Answer. The Marine Corps uses the Joint Staff directed 
Status of Resources and Training System (SORTS) as its first level 
index to look at unit readiness. SORTS provides the broad overview 
common to all the Services. Problems and trends noted in units' SORTS 
reports are regularly cross-checked or reviewed in greater detail using 
other commodity area systems. Some of the other indices used are:
    (1) Unit Activity and DepTempo: Marine Corps Training Exercise 
Employment Plan (MCTEEP). MCTEEP is a software program which provides 
data on unit deployment training and exercises activities entered by 
battalion/ squadron level units. The data contained in MCTEEP details 
deployment and exercise dates, times, numbers of participating 
personnel and costs. Deployment Tempo (DEPTEMPO), the Marine Corps' 
standard method for tracking unit time away from home station can also 
be calculated with proper data entry. Training remains the most 
subjective area of readiness reporting, particularly with respect to 
ground units.
    (2) Manpower: Marine Corps Total Force System (MCTFS). Data from 
the MCTFS, which spans active and reserve pay and personnel records, is 
used to establish a measure of ``health'' of both units and MOSs. By 
``health'', we mean a unit's strength or the assignable strength of a 
particular MOS.
    (3) Aircraft readiness is portrayed in weekly Aircraft Material 
Readiness Reports (AMMRs) which provide aircraft status; numbers of 
mission capable aircraft, maintenance status, aircraft location and 
parts required to complete repairs. When tracked over time and looked 
at in relation to their deployment status and the data contained in the 
Navy's Aviation 3M System, SORTS data can be cross checked.
    (4) Log/Equip. Marine Corps Ground Equipment Readiness Report 
(MCGERR), a command information system which provides equipment status 
by unit, location or roll-up throughout the Marine Corps. MCGERR is a 
subsystem of the Marine Corps Asset Tracking Logistics and Supply 
System and Marine Corps Integrated Maintenance Management System 
(ATLASS/MIMMS). ATLASS/MIMMS integrates supply and maintenance 
information to provide asset status and visibility for ground 
equipment. MCGERR retrieves, integrates, and processes the unit 
provided data to:
    Reflect the current status of selected ground equipment authorized 
and possessed by reporting units.
    Provide the identification of MCGERR tracked equipment excesses and 
deficiencies within the reporting unit.
    Provide data for the determination of equipment/supplies on-hand 
``S'' rating and the equipment's operational status ``R'' rating for 
use in SORTS reporting. Additionally, MCGERR provides an overall 
assessment of a unit's total equipment rating for tracking within the 
Marine Corps.
    Air Force Answer. Readiness is an extremely complex combination of 
interrelated factors which can not be easily quantified. OSD uses the 
same indicators and systems to measure readiness that the services use.
    The Status Of Resources and Training System (SORTS) provides an 
overall unit perspective of readiness and is used by all of the 
services in assessing their unit readiness. Units are rated by overall 
C-Level:
    C-1. Unit possesses the required resources and is trained to 
undertake the full wartime mission(s) for which it is organized or 
designed.
    C-2. Unit possesses the required resources and is trained to 
undertake most of the wartime mission(s) for which it is organized or 
designed.
    C-3. Unit possesses the required resources and is trained to 
undertake many, but not all, portions of the wartime mission(s) for 
which it is organized or designed.
    C-4. Unit requires additional resources or training to undertake 
its wartime mission(s), but it may be directed to undertake portions of 
its wartime mission(s) with resources on-hand.
    C-5. Unit is undergoing a Service-directed resource action and is 
not prepared, at this time, to undertake the wartime mission(s) for 
which it is organized or designed. Assign this C-level only if 
authorized by the major command.
    The overall picture of Air Force readiness for our 300-plus combat 
operational units (since January 1996) follows. ------. Additional 
indicators, such as mission capable rates, cannibalization rates, 
retention rates, recruiting, spare parts stocks, deployed days, 
commander's assessments and many others are used to improve the 
fidelity of the SORTS reports. The Chairman's Readiness System, 
consisting of the Joint Monthly Readiness Review (JMRR) and the Senior 
Readiness Oversight Council (SROC) provides aggregate views of the 
ability of joint and combined forces to carry out their assigned 
missions.
    All of these and many more are used when examining the readiness of 
our military forces. The Joint Staff, in coordination with the 
services, has published a Readiness Assessment System (RAS) Business 
Plan. The RAS is an integrated, automated readiness reporting and 
assessment tool capable of addressing the full spectrum of missions 
required by the National Military Strategy.
    Question. What are the relationships between these indices and the 
problems we currently see? How does a decline in training operating 
tempo (OPTEMPO) effect these measures?
    Army Answer. OPTEMPO execution is not a barometer of readiness. 
Readiness is judged by commanders, who are responsible for taking their 
units to war. The commander's readiness evaluation is based on the 
ability of his unit to conduct wartime tasks. This ability is judged on 
the unit's performance in training exercises, which may be live 
training events (which require a substantial OPTEMPO investment), 
virtual training using simulators, or constructive training using 
simulations. A commander develops a training plan using a mix of these 
three training regimes, depending on variables, such as the 
availability of training areas, ammunition, personnel strength, and 
funding. Live training is the most demanding on resources and the 
environment. Any decline in training OPTEMPO can be expected to reduce 
the frequency and size of live training events. Likewise, the diversion 
of OPTEMPO funds to support contingency operations can be expected to 
adversely impact training opportunities. The frequency, size, mix, and 
quality of live, virtual, and constructive training events will all 
factor into a commander's assessment of unit training readiness.
    Navy Answer. Our readiness indices have proven reliable in 
identifying deficiencies when they occur. Reduced training OPTEMPO will 
have an impact on a unit's proficiency while operating within the 
Inter-Deployment Training Cycle (IDTC). Our readiness indices are 
designed to identify the extent of any readiness degradation and we 
have been quick to implement corrective action when necessary.
    Marine Corps Answer. For the Marine Corps, our readiness indices 
give us effective indicators of essential trends we need in order to 
assess readiness at the Service headquarters level. The Marine Corps 
funds and ensures current readiness first, even to the detriment of 
other areas, so we have no major immediate readiness problems, other 
than those that may be caused by the unfunded contingencies and the 
``El Nino'' storm damage already reported.
    Generally, Marine Corps readiness indices show high readiness in 
our forward deployed forces, while those just returned from deployment 
are resourced at lower levels. This is normal and expected from Marine 
units in our time-tested rotational unit deployment cycles. After units 
returned from deployment, personnel transfer and enlistments begin to 
expire; maintenance resource and repair priorities are given to those 
units preparing to deploy. As a unit gets to within three to six months 
of deployment its across the board priorities are raised, new personnel 
arrive and equipment maintenance and repair priorities are raised to 
higher levels. This ensures that units will deploy with the requisite 
number of fully trained personnel and with equipment in a combat ready 
status.
    Our main index, the Status of Resources and Training System 
(SORTS), best represents an aggregate picture from which to gauge unit 
readiness. For the Marine Corps, SORTS is the vehicle from which 
``checks'' are made against other reporting systems utilized. Our SORTS 
ratings are commensurate with the typical level of personnel manning 
levels, fiscal resourcing, and maintenance priority assigned to units 
in our rotational deployment cycle. To reiterate our point, units 
preparing to deploy and deployed show high readiness in SORTS. Those 
units just returning from deployment may exhibit lower readiness 
ratings, until they again prepare to deploy.
    Some of the other readiness indices include:
    (1) Unit Activity and DepTempo: Marine Corps Training Exercise 
Employment Plan (MCTEEP). MCTEEP is a software program which provides 
data on unit deployment training and exercises activities entered by 
battalion/squadron level units. The data contained in MCTEEP details 
deployment and exercise dates times, numbers of participating personnel 
and costs. Deployment Tempo (DEPTEMPO), the Marine Corps' standard 
method for tracking unit time away from home station is also 
calculated.
    (2) Manpower. Marine Corps Total Force System (MCTFS). Data from 
the MCTFS, which spans active and reserve pay and personnel records, is 
used to establish a measure of ``health'' of both units and individual 
MOSs. By ``health'', we mean a unit's strength or the assignable 
strength of a particular MOS.
    (3) Aircraft readiness is portrayed in weekly Aircraft Material 
Readiness Reports (AMMRs) which provide aircraft status; numbers of 
mission capable aircraft, maintenance status, aircraft location and 
parts required to complete repairs. When tracked over time and looked 
at in relation to their deployment status, they portray an excellent 
readiness cross check to SORTS data.
    (4) Log/Equip. Marine Corps Ground Equipment Readiness Report 
(MCGERR), a command information system which provides equipment status 
by unit, location or roll-up throughout the Marine Corps. MCGERR is a 
subsystem of the Marine Corps Asset Tracking Logistics and Supply 
System and Marine Corps Integrated Maintenance Management System 
(ATLASS/MIMMS). ATLASS/NIMMS integrates supply and maintenance 
information to provide asset status and visibility for ground 
equipment. MCGERR retrieves, integrates, and processes the unit 
provided data to:
    Reflect the current status of selected ground equipment authorized 
and possessed by reporting units;
    Provide the identification of MCGERR tracked equipment excesses and 
deficiencies within the reporting unit;
    Provide data for the determination of equipment/supplies on-hand 
``S'' rating and the equipment's operational status ``R'' rating for 
use in SORTS reporting. Additionally, MCGERR provides an overall 
assessment of a unit's equipment capability ``E'' rating for internal 
tracking within the Marine Corps.
    The Marine Corps does not measure Operations Tempo (OPTEMPO), but 
measures Deployment Tempo (DEPTEMPO), because its units train, deploy 
and fight as units, not as individuals. The Marine Corps Training 
Evaluation and Employment Planner (MCTEEP) is the readiness tool the 
Marine Corps uses to measure DEPTEMPO. A decline in DEPTEMPO would be 
identified in the JMRR, SROC and QRRC briefs/reports. Reduced DEPTEMPO 
will also mean less wear and tear on our aging equipment, saving time 
and money and enabling our already taxed Operations and Maintenance 
dollars to go even farther. We would also expect to see a somewhat 
increased readiness level reported by affected units in their SORTS 
reports because of this.
    Air Force Answer. These indicators show us where our readiness 
challenges lie and provide us the opportunity to take corrective 
actions. For example, the recent downturn in retention indicators has 
been addressed in a number of ways, including increased bonuses and 
attempts to alleviate the high TEMPO experienced by our people. 
Sustained improvements in a variety of these indicators should 
ultimately improve overall SORTS readiness levels (i.e., C-level).
    A decrease in training opportunities could result in a loss of 
required skills if it is long-term and widespread. This could show up 
as a decrease in SORTS training indicators, a shortage in trained 
crewmembers at the unit level, or a decrease in mission capable rates 
due to a lack of trained maintenance personnel. Predicting these 
occurrences is very difficult, as each situation is unique and depends 
a great deal on the conditions which caused it.
    Question. It has been widely reported that mission capable rates 
for Navy aircraft are approximately 75%. What effect does the fact that 
you cannot fly 25% of your aircraft have on the reported readiness of 
aviation units under the SORTS system?
    Navy Answer. The material condition of our aircraft is an important 
indicator of near-term readiness and that is why we pay close attention 
to aircraft mission capable (MC) rates. The Department's goal for MC is 
73% and anytime it is not attained, it warrants our attention. The goal 
is 73% because our aircraft must undergo various maintenance and 
inspections to ensure optimum performance and safety is maintained. 
Maintaining this level of mission capable aircraft ensures sufficient 
quantities of aircraft are available to perform the necessary training 
required to meet all operational commitments. If sufficient quantities 
are not available, the SORTS system will identify readiness degradation 
and allow the Navy to take quick corrective action if necessary.
    Marine Corps Answer. Under the current SORTS system, we do not 
downgrade an aviation unit's readiness status from C-1 (capable of 
carrying out all wartime missions) to C-2 (capable of carrying out the 
bulk of wartime missions) until a unit's aircraft MC rate drops below 
75%. This metric has been utilized for many years and has proven to be 
a reliable indicator of our units' material condition readiness and the 
resources required to bring them up to the C-1 level in A/C material 
condition readiness.
    Air Force Answer. Generally speaking, a given mission capable rate 
will only impact a unit's SORTS report if they are unable to undertake 
their wartime mission or if the shortage of aircraft impacts the unit's 
ability to train. Of the aviation units currently reporting reduced 
readiness, approximately one-third (27) list the reason as being 
related to mission capable rates (a lack of spare parts or equipment 
problems).
    Question. Do the current measures assess readiness in terms of 
Department of Defense's ability to meet the two major regional 
contingency scenarios?
    Army Answer. Yes, in accordance with the parameters of the 
Chairman's Readiness System, the Army assesses its ability to 
successfully execute two major theater wars (MTWs) whenever the 
Director of Operations for the Joint Staff, through the Joint Monthly 
Readiness Review (JMRR), directs a two MTW scenario for that quarter's 
JMRR assessment.
    Each quarter, the Joint Staff publishes a notional warfighting 
scenario that includes small scale contingencies (SSC) and/or MTWs to 
be used as a basis for Commanders-in-Chief (CINCs) and service 
assessments. During full JMRRs, the services' operations deputies brief 
the readiness status of major combat units and critical support 
capabilities to the Joint Staff. Additionally, services brief the units 
that are engaged in ongoing operations and which units would engage in 
the warfighting scenario. For the latter, deficiencies in executing the 
warfighting scenario are identified. These JMRR deficiencies are 
categorized in two ways: readiness issues reflect an inability of 
existing forces to fully perform their functions, and capability issues 
usually reflect shortfalls in force structure, which hinder the Army's 
ability to execute required missions at the theater or national-level 
in support of the national strategy. Each concern is addressed. In some 
cases, near-term fixes (within two years) are identified and 
implemented. In other cases, the solution is best addressed through 
programmatic action. In some cases, there is no solution and risk is 
assumed. Overall, this JMRR assessment has been a critical link in 
identifying service and CINC concerns and shortfalls. It takes straight 
readiness data to the next step by applying that data and those units 
to the National Military Strategy in dual-MTW scenarios.
    Navy Answer. Yes. Within the Joint Monthly Readiness Review 
process, each Service, in coordination with the Joint Staff and other 
Services, routinely assess their ability to meet a dual Major Theater 
War (MTW) scenario.
    Marine Corps Answer. Yes, the current measures assess readiness in 
terms of DoD's ability to meet the two major regional contingency 
(MRCs) (now known as major theater war (MTW) scenarios. Each Joint 
Monthly Readiness Review (JMRR) and Senior Readiness Oversight Council 
(SROC) meeting concludes with a summary assessment of DoD ability to 
undertake the two MTW scenarios. Readiness assessments are made by the 
regional CINCs, the Services, the Joint Staff functional areas and the 
Combat Support Agencies.
    Air Force Answer. Yes, the Chairman's Readiness System assesses the 
ability of the Armed Forces to respond to the two major theater war 
scenario along with a variety of other scenarios.
    Question. What measures are being taken to improve readiness 
measurement?
    Army Answer. The Army's training, maintenance, and support 
resourcing mechanisms are the target of the most significant upgrades 
to our readiness reporting system. The current operating tempo systems 
generates requirements for fuel, repair parts, depot-level repairs, and 
some recurring operating costs based on event-driven training 
requirement models, but is not directly linked to unit readiness 
reporting. Operational Readiness (OPRED) is a new methodology the Army 
is developing to reflect more accurately the total cost of preparing a 
unit for war. OPRED effectively links doctrinal training requirements 
and training and maintenance resourcing to unit training readiness 
ratings. In addition to costs currently captured, it includes other 
associated costs, such as training aids, simulators, ranges, land, 
maintenance, and force projection facilities. In effect, OPRED ties 
together the most critical elements of the Installation Status Report, 
Training Status Report, and the Unit Status Report. The Army is 
currently in the process of rewriting its readiness reporting 
regulation based upon the OPRED concept.
    Navy Answer. The Navy is continually improving and expanding our 
robust readiness measurements. Our most recent efforts have focused on 
our non-deployed forces where readiness degradation and shortfalls 
would first be observed. Some of the promising new tools under 
development centered on aircraft mission capable rates and ship's 
operating time free of serious casualty reports. In another effort, our 
Federally Funded Research and Development Center, the Center for Naval 
Analyses (CNA), continues to work on a tool which links readiness to 
the quality of our personnel. In this case, we have defined personnel 
quality as a function of length of service, educational status, 
frequency of promotion, percentage demoted, and aptitude category 
status. We are beginning to see relationships between this personnel 
quality index and our achieved readiness. This research is particularly 
encouraging because it reinforces what we believe--that highly skilled, 
motivated Sailors and Marines are key to our readiness.
    Marine Corps Answer. The Marine Corps is working very closely with 
the Joint Staff to improve the SORTS reports to ensure the most timely 
and accurate reports possible as technological advances increase the 
Services' tracking capability.
    At the Service headquarters level, the Marine Corps is using the 
Global On-line Marine Edit and Report System (GOMERS) application to 
ensure an error free formatted SORTS report message is sent directly 
from the battalion/squadron level to the Joint Staff for processing, 
making reports both timely and accurate. We are continuing the use and 
expanding the capabilities of our event tool, the Marine Corps Training 
and Exercise Employment Program (MCTEEP) to better aid units in data 
entry of events, more detailed identification of participating units/
elements and tracking of associated training and exercise costs. 
Additionally, training is provided to over 500 SORTS data handlers by 
Air Education Training Command (AETC) Keesler Air Force Base. AETC 
supports 18 classes per year at seven different bases within the Marine 
Corps. Finally, in addition to updating the SORTS SOP (MCO P3000.13C), 
we periodically publish SORTS advisory messages. These advisories 
emphasize reporting requirements, clarify areas of concern, and assist 
units in report preparation.
    Air Force Answer. We have implemented several improvements in the 
measurement of readiness that include review, oversight and mechanisms 
to correct deficiencies:
     The Joint Monthly Readiness Review is the central 
component of the Chairman's and the Air Force's readiness system. It 
has recently incorporated a deficiency review into the process which 
categorizes all identified deficiencies according to ``risk'' and seeks 
to resolve those most critical to mission success.
     The Senior Readiness Oversight Council brings the senior 
civilian and military leadership together in monthly meetings to review 
significant readiness topics and provide guidance for corrective 
measures.
    We have implemented several initiatives to improve our readiness 
measures:
     Aggressively working to link near-term readiness 
considerations with longer-term programs (through the President's 
Annual Defense Budget).
     Stood up a Readiness Integrated Process Team to 
institutionalize readiness as part of the programming process, 
including investigation and development of predictive readiness 
measurements and analysis.
     Increased the emphasis on the role of the commander's 
assessment to improve the accuracy of the unit's Status of Resources 
and Training System (SORTS) reports.
     Implemented the Ready Aircrew Program for the combat air 
forces which closely relates unit level flying training to a CINC's 
prescribed mission essential task lists.
    The Joint Staff, in coordination with the services, has published a 
Readiness Assessment System (RAS) Business Plan. The RAS is an 
integrated, automated readiness reporting and assessment tool capable 
of addressing the full spectrum of missions required by the National 
Military Strategy.
    Question. The Committee understands that each of you is a member of 
the Senior Readiness Oversight Council (SROC). What is the role of the 
SROC in reviewing the state of current readiness?
    Army Answer. The SROC is the second step in the Chairman's 
Readiness System. They key components of the system are the Joint 
Monthly Readiness Review (JMRR), the SROC, and the Quarterly Readiness 
Report to Congress (QRRC). Each quarter, the Joint Staff publishes a 
notional warfighting scenario that includes small scale contingencies 
and/or Major Theater Wars to be used as a basis for Commanders-in-Chief 
and service assessments. The central component of the assessment 
process is the JMRR. During full JMRRs, the services' operations 
deputies brief to the Joint Staff the readiness status of major combat 
units and critical support capabilities, which units are engaged in 
ongoing operations, and which units would engage in the warfighting 
scenario. For the latter, deficiencies in executing the warfighting 
scenario are identified and categorized either as a readiness or a 
capability shortfall. Each concern is addressed. In some cases, a near-
term fix is identified and implemented. In other cases, the solution is 
best addressed through programmatic action. In some cases, risk is 
assumed. To provide civilian oversight, significant issues raised 
through the JMRR process are used to make a monthly risk assessment 
that is reported to the SROC, chaired by the Deputy Secretary of 
Defense, and attended by the Vice Chairman of the Joint Chiefs of 
Staff, service Chiefs (or service Vice's), service Under Secretaries, 
and key Department of Defense (DoD) civilian leadership. At each Full 
SROC, Service Chiefs brief the current readiness of his forces, the 
ability of his forces to execute that quarter's JMRR scenario, force 
readiness projections out twelve months, deployment tempo, and key 
readiness trends in the area of personnel, training, and equipment. 
These SROC assessments are then reported to Congress in the QRRC not 
later than 30 days after the end of each quarter. The QRRC highlights 
issues discussed in the SROC and provides Congress with an assessment 
of the DoD's ability to execute the National Military Strategy.
    Navy Answer. The Senior Readiness Oversight Council meets monthly 
and discusses a wide range of readiness issues which may affect both 
current and future readiness. With regard to current readiness, much 
like the Joint Monthly Readiness Review (JMRR), each Service, in 
coordination with the Joint Staff and other Services, routinely assess 
their ability to meet a dual Major Theater War (MTW) scenario. 
Additionally, emerging readiness issues are addressed and proposed 
solutions are presented to ensure senior leadership can make informed 
decisions on readiness related issues.
    Marine Corps Answer. The SROC composition consists of the Deputy 
Secretary of Defense, the Vice Chairman of the Joint Chiefs of Staff, 
Under Secretaries of the Departments, the Service Chiefs, and Under 
Secretaries of Defense. While the Service Chiefs are the primary 
members of the SROC, Service Vice Chiefs attend many of the meetings.
    The SROC is designed to bring joint, service and DoD readiness 
concerns under one common forum for open and frank discussion. When 
done in conjunction with a full reporting Joint Monthly Readiness 
Review (JMRR), the Service Chiefs report current and projected service 
status assessment, and service readiness to undertake the JMRR scenario 
within the framework of the National Military Strategy. Other current 
readiness issues are addressed as requested by DoD officials. To 
conclude the meetings, the VCJCS/J-3 provide an overall readiness 
assessment as a summary of DoD's ability to undertake the two MTW 
strategy with a risk evaluation.
    Air Force Answer. The SROC brings the senior civilian and military 
leadership together in monthly meetings to review significant readiness 
topics. The stated objectives of the council are to: advise the 
Secretary and Deputy Secretary of Defense on overall force readiness; 
provide a military perspective on readiness; link near-term readiness 
issues with the budget process; and to alert civilian Department of 
Defense leaders on significant readiness problems.
    At each SROC meeting, the Service Chiefs or their representatives 
provide a current and projected unit status assessment similar in scope 
and form to that provided in the Chairman's Joint Monthly Readiness 
Review (JMRR). The Vice Chairman of the Joint Chiefs of Staff provides 
a joint readiness assessment and an overall assessment of the readiness 
of the Armed Forces to fight and meet the demands of the National 
Military Strategy.
    Question. What is the role of the SROC in improving existing 
readiness measures?
    Army Answer. The Senior Readiness Oversight Council (SROC) does not 
have a direct function in improving existing readiness measures. 
Instead, it takes existing measures and uses the information obtained 
to conduct its assessment in accordance with the quarterly Joint 
Monthly Readiness Review scenarios. The SROC does provide a current and 
projected unit status assessment at the strategic level. The SROC also 
brings the senior civilian and military leadership together in monthly 
meetings to review significant readiness topics.
    Navy Answer. One of the main objectives of the SROC is to bring 
short and long term emerging readiness issues to the attention of 
Senior Leadership. Providing an expanded view of readiness ensures 
senior leadership is informed, facilitates discussion, and enhances 
decisions on readiness related issues.
    By focusing the Service's efforts in these areas, the SROC has 
improved the readiness monitoring process and enhanced the ability to 
take quick corrective action to resolve or avoid readiness degradation.
    Marine Corps Answer. The SROC is designed to bring joint, Service 
and DoD readiness concerns under one common forum for open and frank 
discussion. When done in conjunction with a full reporting Joint 
Monthly Readiness Review (JMRR), the Service Chiefs report current and 
projected Service status assessment, and Service readiness to undertake 
the JMRR scenario within the framework of the National Military 
Strategy. Other current readiness issues are addressed as requested by 
DoD officials. To conclude the meetings, the VCJCS/J-3 provide an 
overall readiness assessment as a summary of DoD's ability to undertake 
the two MTW strategy with a risk evaluation.
    Air Force Answer. The SROC is the highest executive forum for 
readiness-related issues within the Department of Defense. It provides 
guidance and establishes policy for military readiness matters. Key 
among its concerns is the assessment of our military's capability to 
accomplish the full spectrum of missions in the National Military 
Strategy. Many decisions stem from readiness assessments (e.g., 
planning, budgeting, apportionment of forces); therefore, the SROC 
process is designed to provide our military and civilian leaders a 
precise reflection of our military capability.

                Vulnerability of Information Technology

    Question. How do your training exercises prepare your units to 
fight in an environment where their information technology systems may 
be disrupted or completely disabled?
    Army Answer. In response to increased vulnerabilities stemming from 
the growing reliance on computers at every echelon, the Army 
established a permanent Red Team as part of the Land Information 
Warfare Activity (LIWA). The LIWA is the Army's single focal point for 
information operations and provides support to Land Component 
Commanders. The Red Team is a capabilities-based organization that is 
used to portray the full range of cyber threats that could be directed 
against our tactical forces. The Army's intent is to incorporate 
attacks on information systems of our command and control capabilities 
into all exercises.
    Navy Answer. The Navy's policy is to conduct ``Red Team'' 
evaluations against all deploying Carrier Battle Groups (CVBG) and 
Amphibious Ready Groups (ARG) during the Joint Task Force Exercise 
(JTFEX) phase of the CBG/ARG work-ups. These Red Team evaluations 
specifically target information systems and networks and are designed 
to evaluate the CVBG/ARG's ability to function with degraded or 
disrupted systems.
    Marine Corps Answer. As a matter of standard operating procedure, 
Marine units plan and exercise using built-in tiered redundancies in 
their information transmission means. For example, forward deployed 
Marine Expeditionary Units, which must be able to execute contingency 
operations within six hours, train to quickly transition to alternate 
communication means when their primary SHF channels become disrupted. 
Such alternatives include voice traffic reports, data transfer using 
data-burst UHF satellite links and use of commercial INMARSAT channels 
to support their C4I systems, and hand delivery of information. Our 
Marines train in such a manner to expect that they will have to use 
alternate means in any operation. Even as we continue to modernize our 
information technology through the procurement of systems like the 
anti-jam SMART-T EHF satellite radio, Marines will continue to train in 
use of alternative means to transmit information.
    Air Force Answer. Exercises prepare our units to accomplish their 
mission, to face unexpected challenges, recognize disruptions, explore 
options, learn and refine practices, procedures and doctrine, and to 
deal with unforeseen problems while accomplishing their mission. 
Exercises simulate possible wartime conditions, test current technology 
and procedures, and enable us to design and validate our systems' 
ability to counter current and future threats.
    The Air Force is involved in exercises at the Joint, Service and 
major command (MAJCOM) levels that incorporate information technology 
system disruptions or denials. For example, Air Force personnel 
participated in the Joint Chiefs of Staff (JCS) ELIGIBLE RECEIVER 97 
exercise that focused on defensive information warfare and included 
events where information/communications systems were disrupted or 
completely disabled. At the Service level, the Air Force conducts a 
command and control (C2) exercise, Blue Flag, which includes a 
realistic, interactive enemy force. An example of a MAJCOM level 
exercise is Air Combat Command's CROWN ROYALE that tests information 
technology outages. Through these exercises, we have learned about 
information protection, network design, configuration management, and 
network performance.
    Question. Do you conduct training exercises where the information 
technology systems are turned off?
    Army Answer. Tactical units are expected to be able to work through 
and overcome the full range of potential problems that occur on and off 
the battlefield. This includes the loss of information systems. During 
warfighter exercises, units are often faced with the challenge of 
fighting without the aid of their information systems. While not 
intentionally turned off, they are not used if adjudicated threat force 
actions, such as jamming and destruction, would have inhibited their 
operation during the fight.
    Navy Answer. For safety reasons as well as to ensure that the JTFEX 
is completed, the ``Red Team'' does not usually ``turn off'' 
information technology systems unless specifically directed to by the 
Fleet Commander (which to date has not happened). There certainty are 
instances during training exercises when systems are simulated as being 
turned off (completely disabled) to assess the crew's ability to 
implement ``work arounds.''
    Marine Corps Answer. Marine units often use electronic attack means 
provided by our radio battalions to test their ability to operate when 
information technology has been disrupted or disabled. Marines also 
test their ability to maintain operational security under such 
conditions through the use of communications monitoring. However, even 
under the best of conditions, maintaining C4I systems to support 
operational Marine units is a challenging task. Due to the nature of 
information technology equipment, Marines frequently train and carry 
out contingency operations with disrupted or degraded communications. 
We have found that system redundancy and training are key to 
maintaining the ability to operate with degraded C4I systems.
    Air Force Answer. Yes, exercise scenarios incorporate events where 
information technology systems affecting operations, intelligence, 
communications, and computers, to name a few, are restricted or turned 
off. These training scenarios present unexpected challenges to 
participants. They learn to ensure the continuity of mission and 
business operations by recognizing system disruptions, exploring 
options and using back-up systems and procedures.
    Question. Do you consider the need to prepare your information 
technology systems for the year 2000 date change to be a serious 
readiness issue?
    Army Answer. Yes. Our Army's ability to shoot, move and communicate 
effectively--both within our service and in conjunction with Joint and 
Combined forces--has come to rely heavily on information technology. 
The increasing importance of information dominance, with its continual 
introduction of more sophisticated weaponry to the inventory, has made 
this reliance critical. The year 2000 problem is a readiness issue. 
Both the Chief of Staff and the Secretary have given the year 2000 
issue top priority status.
    Question. Would you consider a unit ``combat ready'' in December 
1999 if its information technology systems had not been proven year 
2000 compliant in a full end-to-end test or in a rigorous training 
exercise?
    Army Answer. We will consider all units combat ready if all mission 
critical information technology systems are validated and certified as 
year 2000 compliant. We are taking all prudent steps possible to make 
sure that our information technology systems will operate before, 
during and after the year 2000. However, we do not believe a full end-
to-end test or a rigorous training exercise is prudent, affordable, or 
necessary to establish this. We are requiring that all mission critical 
systems in the Army be certified year 2000 compliant at the General 
Officer/Senior Executive Service level. This certification is done 
following appropriate testing and validation, to include testing of the 
primary interfaces. Additionally, we are developing contingency plans 
for those major systems that are currently non-compliant. This will 
give us a back-up if any of the renovation efforts for non-compliant 
systems are not implemented in time or do not work as desired.
    Navy Answer. The Navy considers the Year 2000 issue a serious 
matter with the potential to affect operational readiness and is taking 
appropriate action. We are following the five-phase Management Plan 
issued by the Department of Defense and the Year 2000 Action Plan 
developed by the Department of the Navy. These provide guidance on 
assessing the problem, renovating systems as needed, validating fixes, 
and installing solutions and corrected systems. We are also preparing 
contingency plans to ensure the continuity of Naval operations at the 
millennium rollover should unexpected problems arise. The Secretary of 
the Navy staff is providing departmental oversight. At the service 
level we have established a Navy Y2K Project Office to instill Navy-
wide awareness of the issue and its potential consequences, to 
specifically engage senior Navy leaders, and to facilitate and oversee 
a capability-based end-to-end system assessment and subsequent 
integrated Fleet test. The accomplishment of these tasks is one of the 
Navy's top priorities.
    Marine Corps Answer. Yes, it is a serious issue and it is being 
treated accordingly. We have assessed the impact of the year 2000 and 
determined it touches all mission and support systems; may cause 
program and upgrade delays; places additional cost burdens on some 
programs; may require early termination of systems; and may drive a 
solution toward early migration and modernization. All information 
technology systems have been assessed and are currently being renovated 
to ensure Y2K compliance.
    Air Force Answer. Yes. The year 2000 problem is the Air Force's 
number one software and information technology issue. We are currently 
tracking over 3,000 weapon and automated systems affected by this 
problem. Mission critical systems are our primary focus. Our goal is to 
make all fixes by 31 Dec 1998, and to use 1999 for testing. We are 
confident the year 2000 date change will not affect the Air Force 
mission.
    Question. Would you consider a unit ``combat ready'' in December 
1999 if its information technology systems had not been proven Year 
2000 compliant in a full end-to-end test or in a rigorous training 
exercise?
    Navy Answer. No, I would not. As part of the predeployment 
preparations, battlegroup commanders have required rigorous operational 
exercises to fully flex onboard and supporting systems in the 
operational environment and to assure themselves that the units are 
combat ready. The Navy's approach to ensuring combat readiness, post-
Y2K implementation, remains consistent and includes plans to conduct 
end-to-end operational testing both in the laboratory environment and 
in the actual operational afloat environment. It is important to note 
that these tests will not be limited to information technology systems, 
but will include many systems which employ computers, processor chips, 
and software. We are assessing all systems, whether they are 
information systems, control systems, or weapons systems. The approach 
includes integration testing after the actual systems have been 
evaluated and repaired. We are testing systems themselves, then their 
immediate interfaces to other systems, and finally will conduct tests 
in a ``system of systems'' environment during workup exercises for 
deploying battlegroups to ensure that all the fixes work together to 
deliver critical operational capability.
    Marine Corps Answer. No, we would not consider a unit combat ready 
if its information technology systems had not been proven year 2000 
compliant through adequate testing. The United States Marine Corps is 
totally committed to assure that no mission critical system failures 
occur due to the year 2000. Failure of a mission critical system due to 
the year 2000, could potentially lead to a degradation in our ability 
to accomplish our missions. Therefore, the Marine Corps is using an 
integrated system-by-system, command-to-command approach that will 
ensure critical warfighting and warfighting support capabilities remain 
intact through the year 2000 and beyond.
    Air Force Answer. Yes. While year 2000 testing will be extensive 
and complex, it is simply not possible to do a full end-to-end test to 
prove year 2000 compliance. The Air Force year 2000 testing program 
includes testing systems and their interfaces, as well as system-of-
systems testing. We are also working with the Office of the Secretary 
of Defense (OSD) and the Joint Staff in developing a year 2000 System-
of-Systems Test and Evaluation Master Plan (TEMP). The TEMP wold lay 
out mission-oriented test scenarios for mission critical and mission 
support systems at the Service, Joint, and Allied/Coalition levels. As 
extensive as these tests will be, they will not prove year 2000 
compliance. However, they will give us high confidence in our 
procedures and better understanding of any risks we might face.
    We have asked unit-level commanders to develop operational 
contingency plans to ensure all mission-critical and essential support 
functions (e.g., command centers/posts, maintenance operations centers, 
air operations centers, personnel, financial management, and logistics) 
continue to function if unanticipated year 2000 problems arise. We plan 
to establish crisis response cells for software-intensive activities 
should we have problems during the rollover. To ensure essential 
support functions are performed, we have emphasized crisis planning to 
ensure long lead-time items are preordered, and essential items (such 
as aircraft engine parts, food items, and medical supplies) are pre-
positioned.

                         Privatization Program

    Question. The Department of Defense (DoD) has an aggressive 
privatization program designed to contract out numerous base support 
and administrative functions. DoD claims that a significant portion of 
the end strength reductions specified in the Defense Reform Initiative 
will be achieved through privatization of functions currently performed 
in-house by DoD. DoD also claims that outsourcing will result in cost 
reductions of about 20 percent.
    How important is the accelerated privatization initiative to your 
efforts to improve the ratio of DoD ``tooth to tail?''
    Army Answer. The primary objective of Army's Competitive Sourcing 
Program--which consists mainly of cost competition studies conducted in 
accordance with Office of Management and Budget Circular A-76, 
Performance of Commercial Activities--is to achieve efficiency in the 
performance of the Army's commercial activities. We achieve these 
efficiencies whether the cost competition determines that it is more 
economical to convert the activity to performance by contract or by the 
streamlined in-house Most Efficient Organization. While the primary use 
of the savings that result from these efficiencies will be to fund 
critical Army modernization requirements, the improvement of the Army's 
``tooth to tail'' ratio will be another benefit.
    Navy Answer. Maintaining our momentum in the competition program is 
essential to our efforts to improve the ratio of DoD ``tooth to tail''. 
The Navy's FYDP reflects net savings through competition of 
approximating $2.5 billion through FY 2003, with annual savings in FY 
2003 approximating $1.2 billion, that have been reapplied within the 
FYDP, toward recapitalization and modernization of our force structure.
    Marine Corps Answer. The Marine Corps has assumed savings of $110 
million per year, starting in FY04, gained through the competitive 
sourcing program. These savings have already been reprogrammed for 
procurement modernization part of the ``tooth''.
    Air Force Answer. The Air Force is not using outsourcing or 
privatization as a means to improve our ``tooth to tail'' ratio. 
However, since all of the positions being considered for outsourcing or 
privatization are ``tail,'' the Air Force will realize a slight 
increase in our ``tooth to tail'' ratio.
    Question. Can increased privatization of support functions meet DoD 
goals for reducing the cost of infrastructure? Can the savings from 
privatization obviate the need for additional rounds of base closings?
    Army Answer. The Army Competitive Sourcing Program alone cannot 
meet DoD goals for reducing the cost of infrastructure. In particular, 
the savings needed from additional rounds of base closing are crucial 
to meeting those goals.
    Navy Answer. This program is relatively new, and in the absence of 
hard data it is not possible to state how much this program will help 
reduce infrastructure costs. The Navy's emphasis is on competitive, not 
on outsourcing and privatization per se, and we expect real savings 
regardless of the outcome of the competitions--either a new more cost 
effective in-house organization or a contract. While savings from 
privatization and competition will help us achieve our recapitalization 
and modernization goals, these initiatives by themselves will not 
obviate the requirement for the additional base closure and realignment 
necessary to sufficiently reduce excess capacity and related 
infrastructure.
    Marine Corps Answer. Base closings are related to changing mission 
requirements. For whatever infrastructure is required to support 
readiness, we will use privatization as one technique for achieving the 
most cost effective base support functions. I do not believe it will 
obviate the need for an additional BRAC.
    Air Force Answer. Privatization cannot reduce excess bases for our 
source structure. This can only be addressed through the BRAC process. 
Privatization only provides a mechanism to recapitalize our existing 
aging infrastructure. The Air Force has not programmed any dollar 
savings for privatization because the focus of our current 
privatization efforts (housing and utilities) is cost avoidance rather 
than savings.
    Question. What are the limits of privatization? Are your efforts 
limited by the need to maintain a rotation base? Does the need to 
maintain certain skills among military or civilian personnel limit your 
ability to privatize functions?
    Army Answer. There are legal prohibitions on outsourcing such 
functions as firefighters and security guards. Other than that, there 
are very few limits on Army commercial activities that can be competed. 
Rotation base limits on competition are minimal because the Army has so 
few overseas military positions for which rotation base positions have 
to be preserved. Similarly, there are very few limits on competition 
based on maintaining skills.
    Navy Answer. Privatization, or competitive outsourcing, is limited 
both by legislation and by the Navy's requirement for current sea-shore 
rotation and homebasing. Our policies provide a structured check and 
balance system between military manpower requirements and proposed 
shore infrastructure reductions for regionalization and outsourcing 
initiatives to ensure that military readiness is not adversely 
affected. The need to maintain a sea-to-shore rotational base, along 
with the need to maintain certain critical skills, has indeed limited 
our ability to compete certain military-intensive functions. For this 
reason, the Navy's plan to achieve the savings reflected in this budget 
focuses on competing civilian intensive functions.
    Marine Corps Answer. Privatization is limited by the willingness of 
a commercial vendor to provide a bid. Rotation is not a compelling 
limitation faced by the Marine Corps. The need to maintain certain 
skills among military or civilian personnel may limit the ability of 
the Marine Corps to completely privatize functions.
    Air Force Answer. Our privatization efforts are limited by public 
law and DoD workforce policies concerning military essential and 
inherently governmental functions. The need to maintain a rotation base 
was a requirement when considering positions for outsourcing. It 
limited our ability to outsource some functions. The requirement to 
maintain certain skills among military and civilian personnel also 
limited our ability to outsource some functions.
    Question. What are the net savings from outsourcing and 
privatization assumed in the 1999 budget request? Do you view the 
estimated savings in the budget request as realistic?
    Army Answer. The fiscal year 1999-2003 Future Years Defense Plan 
assumes a net savings of $1,200,000,000 over the five year period. The 
estimated savings are realistic and the Army is optimistic that its 
competition initiatives will achieve the programmed savings.
    Navy Answer. No savings are assumed in FY 1999. Beginning with FY 
2000, the Navy's FYDP reflects net savings of approximately $2.5 
billion through FY 2003, with annual savings in FY 2003 approximating 
$1.2 billion. These savings have been reapplied within the FYDP, toward 
recapitalization and modernization of our force structure. I need to 
stress that the Navy's emphasis is on competition, not on outsourcing 
and privatization per se. We expect savings regardless of the outcome 
of the competitions either a new more cost effective in-house 
organization or a contract.
    Marine Corps Answer. The Marine Corps budget does not reflect any 
savings in Fiscal Year 1999. The budget assumes savings beginning in 
Fiscal Year 2000 ($20 million) and growing to a steady state amount of 
$110 million by Fiscal Year 2004.
    Air Force Answer. The Fiscal Year 1999 budget contains $1.8 billion 
in savings from outsourcing. Although our outsourcing program is 
aggressive and has some inherent risks, we believe the savings budgeted 
are realistic. Our outsourcing savings estimate is conservative because 
we only assumed a 25 percent reduction in costs vice the 34 percent we 
have realized over the last 10 years. As long as we are able to execute 
our planned outsourcing initiatives, we should meet our projected 
savings.
    Question. What costs have been incurred by each service to 
implement its privatization program?
    Army Answer. The costs associated with competing the Army's 
commercial activities will be $23,000,000 by the end of this year with 
another $27,000,000 programmed for fiscal years 1999-2001.
    Navy Answer. The Navy will spend between $20 million and $38 
million in fiscal year 1998, depending upon the final number of 
positions to be studied this fiscal year. In fiscal year 1999 the Navy 
has budgeted $21 million for continuation of outsourcing studies. The 
funding is to provide consultant support for competitive sourcing 
studies under OMB Circular A-76. Using $2 thousand/FTE as a benchmark, 
these funds will be used to augment the in-house efforts of personnel 
conducting the studies. However, the major focus of the Navy program 
will rely upon personnel already in place to conduct the bulk of the A-
76 study effort. The use of local expertise plays a critical part in 
establishing the requirements for performance work statements (PWS) and 
in developing the in-house Most Efficient Organizations (MEO) required 
by OMB Circulator A-76.
    Marine Corps Answer. To date the Marine Corps has spent $170 
thousand to implement its privatization program. We plan to invest 
approximately $37 million in our program from FYs 1998 to 2001.
    Air Force Answer. The Air Force has spent approximately $9 million 
on training, systems upgrades, Performance Work Statement development, 
and contractor augmentation since Fiscal Year (FY) 1995 to implement 
our outsourcing and privatization program. Based on the increased 
number of positions to be competed under the A-76 study process, we 
will require additional funds to accomplish the studies.
    Question. What measures has each service implemented to validate 
savings?
    Army Answer. The Army is developing a database that will track the 
outcome of these commercial activities studies to validate savings. In 
the interim, we have asked the Army Audit Agency to validate savings.
    Navy Answer. The Navy relies upon the cost comparison process 
established by OMB Circular A-76. Circular A-76 not only provides 
rigorous guidelines for identifying the costs of both in-house and 
private sector performance but it also incorporates an independent 
review process and provides all affected parties with an independent 
appeal process. To monitor costs after the comparisons have occurred, 
we are establishing a reporting system that will track actual costs 
across the five-year comparison period. Based on our past experience, 
we expect actual costs to track well with the cost comparison 
estimates, but will take appropriate corrective action if they do not.
    Marine Corps Answer. The Marine Corps is implementing Activity 
Based Costing within facilities maintenance and logistics aboard its 
U.S. bases. This will establish a baseline cost for those related base 
commercial activities within two areas which produce approximately 70% 
of installation operating costs. These baseline costs can then be 
compared to either the A-76 cost comparison process generated most 
efficient organization costs and/or commercial sector contract offers.
    Air Force Answer. Since implementation of the Office of Management 
and Budget Circular A-76 guidance in 1979, the Air Force has achieved 
savings of 24 percent through competition. And in fact, over the last 
ten years we have realized a savings of 34 percent. To be fiscally 
conservative, we only projected a 25 percent savings through 
competition in the Fiscal Year (FY) 1999 President's Budget.

                      Base Realignment and Closure

    Question. Secretary Cohen has repeatedly argued that two additional 
rounds of base closure are necessary to free-up funding for readiness 
and modernization. The Department of Defense (DoD) proposal would 
provide for the additional base closings to take place in 2001 and 
2005. What is your view on the necessity for additional base closures 
and realignments?
    Army Answer. The Army supports Secretary Cohen's position on the 
need for additional Base Realignment and Closure (BRAC) rounds in 2001 
and 2005. The Army must dispose of excess infrastructure that remains 
after the first four BRAC rounds and consolidate functions to increase 
efficiency. Two additional BRAC rounds will allow the Army to align 
infrastructure with force structure and provide facilities required to 
support the Army of the 21st century.
    Navy Answer. The Navy supports the unanimous view of the Joint 
Chiefs of Staff that additional base closures are necessary if we are 
to transform the Armed Forces to achieve Joint Vision 2010 and to 
implement the QDR Strategy.
    Marine Corps Answer. The Marine Corps supports the DoD call for 
additional BRAC rounds. However, the Marine Corps does not have clear 
indicators that additional rounds of BRAC will identify any significant 
Marine Corps base realignments or closures.
    Air Force Answer. The Quadrennial Defense Review (QDR) supported, 
and the Secretary of Defense has requested, two additional rounds in 
2001 and 2005 which the Air Force fully supports.
    Question. How much of the current facilities footprint do you 
anticipate that DoD would give up in future rounds?
    Army Answer. The Army has not initiated any studies or analysis 
that would allow us to determine the Army facilities and installations 
that would be recommended for closure or realignment in future BRAC 
rounds.
    Navy Answer. DoD estimates that it has about 23 percent excess base 
capacity. A Base Realignment and Closure military value analysis would 
have to be completed in order to more precisely determine the 
facilities footprint that would be recommended for BRAC.
    Marine Corps Answer. The Marine Corps does not have clear 
indicators that significant excess capacity exists on Marine Corps 
bases. Without a detailed analysis that can only be accomplished in a 
BRAC round, the Marine Corps cannot identify any specific level of 
reduction at this time.
    Air Force Answer. Though the Air Force acknowledges an overall 
excess in base capacity, we would need to use a detailed base-by-base 
analysis that addresses the factors considered in the BRAC process 
before determining the exact number of facilities.
    Question. What is the level of savings envisioned over the long 
term for two additional rounds of base closings?
    Army Answer. The Army will achieve annual recurring savings 
approaching $1 billion from the first four BRAC rounds. The Army does 
believe that significant savings will result from additional BRAC 
actions. However, the Army cannot quantify the savings that will be 
achieved from future BRAC rounds prior to identification of specific 
installations and compilation of detailed cost and savings analysis.
    Navy Answer. Navy projects savings of one billion dollars per year 
after implementing two additional BRAC rounds.
    Marine Corps Answer. The Marine Corps does not have clear 
indicators that significant excess capacity exists on Marine Corps 
bases. Without a detailed analysis that can only be accomplished in a 
BRAC round, the Marine Corps cannot project any potential savings from 
facilities reduction at this time.
    Air Force Answer. The purpose of base closures is to match 
infrastructure with changes in force structure that reflect policy 
objectives. This in turn frees up budget resources. This is especially 
true today when force structure has been reduced thereby generating 
costly excess capacity. In addition, the Air Force is reshaping itself 
into an Expeditionary Aerospace Force in order to meet future 
operational requirements. This requires a smaller, but more robust, 
basing structure. Without question, reducing the infrastructure will 
produce savings. The level of those savings, though, depends greatly on 
how many and what type of bases can be closed or realigned. As history 
has shown, it takes many months of careful study to determine the most 
beneficial restructuring scenarios during which estimates of savings 
have fluctuated widely. As a guide, however, the Secretary of Defense 
has stated that two more rounds of base closures could generate up to 
$20 billion in savings by 2015, DoD-wide.

    [Clerk's note.--End of questions submitted by Mr. Young.]
                                         Wednesday, March 11, 1998.

 FISCAL YEAR 1998 SUPPLEMENTAL APPROPRIATIONS FOR BOSNIA AND SOUTHWEST 
                                  ASIA

                               WITNESSES

HON. WILLIAM S. COHEN, SECRETARY OF DEFENSE
GENERAL JOSEPH W. RALSTON, VICE CHAIRMAN OF THE JOINT CHIEFS OF STAFF, 
    UNITED STATES AIR FORCE
HON. WILLIAM J. LYNN, UNDER SECRETARY OF DEFENSE (COMPTROLLER)

                              Introduction

    Mr. Young. The committee will come to order.
    This afternoon, we are pleased to welcome the Secretary of 
Defense, the Honorable William S. Cohen; and General Joseph W. 
Ralston, Vice Chairman of the Joint Chiefs of Staff; and the 
Honorable William J. Lynn, Under Secretary of Defense, 
Comptroller, for a hearing on the proposed fiscal year 1998 
emergency supplemental appropriations for the Department of 
Defense.

                          SUPPLEMENTAL REQUEST

    Last week, the President forwarded to the Congress his 
request for approximately $2 billion in supplemental funding 
for the Department of Defense. Most of this amount, $1.85 
billion, is proposed to pay for the additional costs of the 
recent military deployments to the Persian Gulf region, as well 
as the costs associated with the President's decision to extend 
the mission of U.S. forces in Bosnia.
    The President also requested $173 million in order to 
repair severe storm damage at several military facilities.
    Mr. Secretary, I want to commend you, as well as the 
Chairman of the Joint Chiefs, General Shelton, General Ralston 
and the rest of our senior military leadership, for your role 
in contributing to what we hope will be a successful resolution 
to the latest problems with Iraq. And I know I speak for all of 
us in the Congress in saying how proud we are of our troops and 
how well they have conducted themselves as they carried out 
their important missions.
    As you know, some of us on this Committee as well as some 
other colleagues just returned the day before yesterday from a 
trip to Bosnia where I had the privilege of leading a 
delegation of 10 Members to the region. That included Mr. 
Bonilla and Mr. Nethercutt, who are members of this 
subcommittee.
    This past October, we visited our forces in the Persian 
Gulf region, and I have to tell you our men and women in 
uniform are once again carrying out difficult assignments under 
less than ideal conditions. But they truly are our best defense 
asset, and it is incumbent on all of us to do what we can to 
give them the support that they need.
    Which brings us to the supplemental. The $2 billion request 
before us covers several different areas.

                           PERSIAN GULF COSTS

    First, it provides funds to pay for the buildup of our 
forces in the Persian Gulf, which started last November, and 
the costs of maintaining these level of forces in the region 
through the end of the fiscal year in September. This is an 
extensive operation, including the deployment of a second 
aircraft carrier and a marine amphibious ready group to the 
Gulf, the movement of two additional Army brigades to Kuwait, 
and beefing up our land-based Air Forces in the area.
    Since these were unplanned deployments, however, none of 
this activity was accounted for in the fiscal year 1998 
appropriations bill. As a result, right now the cost of these 
operations, nearly $1.4 billion, is being financed by diverting 
funds intended for other critical defense activities. If this 
money isn't replaced through the supplemental request before us 
today, then we are looking at major problems in our personnel, 
quality of life and readiness programs as we move into the last 
half of this fiscal year.

                            BOSNIA OPERATION

    The situation is a little different with respect to Bosnia. 
When we completed action on the fiscal year 1998 Defense 
Appropriations Act last fall, the United States was only 
committed to keeping our troops in Bosnia through June of this 
year. That was the length of the mission, as announced by the 
President in November of 1996. We would be in Bosnia through 
June, 1998. And, last year, Congress approved funding to 
support the Bosnia mission through that date.
    But as we worked on the fiscal year 1998 bill, we also knew 
there was a strong likelihood that the President, along with 
our NATO allies, would once again decide to extend the mission 
of our forces in Bosnia. So we put in place a mechanism which 
required the President, if he chose to extend the mission, to 
do several things. He was required to formally request 
supplemental funding for the mission extension and, also, to 
provide a certification to the Congress providing an 
explanation of the national security interests, the mission, 
the exit strategy and other criteria involved with an extension 
of the mission in Bosnia.
    As we know, the President and NATO, as an alliance, have 
now, in fact, decided to extend the Bosnia mission; and, with 
this supplemental, the President has complied with the 
congressional requirement of last year. The supplemental 
requests $487 million to cover the unbudgeted costs of the 
Bosnia deployment from July through September of 1998; and the 
President has also submitted a fiscal year 1999 budget 
amendment, providing $1.86 billion over the amounts in the 
original fiscal year 1999 budget request in order to support 
operations in Bosnia through next year.

                            IRAQ AND BOSNIA

    Mr. Secretary, there are many questions regarding both Iraq 
and Bosnia, which I expect the Members will present to you this 
afternoon, most of which will deal with policy issues. Let me 
cite just a few right now.
    Regarding Iraq, do you believe it will comply with the 
agreement it entered into with the United Nations Secretary 
General? What will we do if Iraq does not comply? And what is 
our long-term policy regarding Iraq and the Gulf region in 
general?
    As for Bosnia, perhaps the biggest question is how long our 
troops will be there. This time, the President has not set a 
target date for the withdrawal of U.S. forces. What needs to be 
done before we can bring our troops home? And what is a 
reasonable estimate as to how long that will take--2 years, 5 
years? Who knows?
    It is also important to consider what these operations are 
doing to our overall defense posture. Missions of these sorts 
are stretching our resources to the limit, and we are seeing 
the effects. High rates of personnel and operational tempo are 
directly related to growing personnel retention problems, 
especially with pilots, and also unexpected shortages in spare 
parts and declining aircraft mission capable rates. And each of 
the services continue to warn us about increasing readiness 
problems, particularly with nondeployed units whose training 
and funding is being sacrificed in order to keep the front-line 
forces at acceptable levels of preparedness.
    These are all important issues, and I hope we can explore 
all of them today. But I want to come back to what is really 
the bottom line confronting us with this supplemental request.
    These funds are being requested in order to support 
unplanned contingencies, which we didn't provide for in last 
year's bill. But the operations are going on. They are already 
under way. The money is being spent even as we sit here today. 
Money which was intended to pay for fourth quarter training, 
fourth quarter paychecks, fourth quarter depot maintenance, all 
that money is being used to support these contingencies; and if 
it is not replenished we will be heading towards a massive 
readiness problem in a matter of a few months.
    I support this supplemental, and I support your decision to 
request these funds as an emergency appropriation, which 
doesn't require offsets. We can no longer pay for these 
missions out of the hide of the Department of Defense and the 
military services, as we have been doing for the past several 
years. At the same time, we are asking our troops to do more 
and more, it makes no sense to continue to rob Peter to pay 
Paul and to make us offset this supplemental from within other 
Defense Department accounts.
    So, Mr. Secretary, we look forward to your testimony and 
that of your colleagues and also to your reaction to the issues 
I have just touched on.
    Before we give you that opportunity, I would like to 
recognize Mr. Murtha for any comments he would like to make.

                         Remarks of Mr. Murtha

    Mr. Murtha. I hope that when you discuss your answers 
today--I keep hearing this rumor that you have told all the 
departments to save 10 percent of their money for Bosnia/Iraq 
and Mr. Lynn is husbanding money over there which he has 
available, and I hope that you will either tell us that is 
true, which would make it easier for us, or disabuse us of that 
concern as you testify.
    Secretary Cohen. Okay.
    Mr. Young. Mr. Secretary, we will be happy to hear from 
you, and then we will be prepared to present you with some 
interesting questions.

                  Summary Statement of Secretary Cohen

    Secretary Cohen. Okay. I hope I have some interesting 
answers to respond.
    Mr. Chairman, I have submitted a prepared statement. I 
think you all have it. I won't take your time to go through it 
verbatim. Let me try and summarize.
    There are several questions that have to be asked and 
answered. They are real simple. Why, what, how long, and how 
much? That is basically what you are going to be asking of me.

                           BOSNIA DEPLOYMENT

    With respect to Bosnia, you have already outlined the 
problem. There was no plan to be there beyond June of 1998.
    When I was sitting on the other side of this table over in 
the Senate, the other Chamber, body, I had my doubts about the 
wisdom of becoming involved in Bosnia. I supported the 
limitation of the 1-year and then I supported the extension to 
the 18 months, but it was my firm belief and expectation that 
we be able to complete that mission by June of this year.
    Since that time, obviously I am sitting in a different 
position, but I have also had an occasion to travel back to 
Bosnia on quite a few occasions. And we have made an enormous 
amount of progress there. It would be easy to simply adhere to 
the artificial deadlines that were set and many of us 
subscribed to and simply say, time is up, time to leave.
    But the fact is, we have contributed an enormous amount of 
stability to that region. We have been successful in seeing 
300,000 soldiers retired from active service and back into 
civilian life; 6,900 weapons have been destroyed; and we have 
seen some democratic elections, independent media at least 
starting to be established. We have seen some 400,000 refugees 
and displaced persons start to return to Bosnia. And one-third 
of the publicly-indicted war criminals are now in custody in 
The Hague.
    The economy in 1996 increased by 50 percent, started at a 
very low base, but it is up 50 percent in 1996. It was up 35 
percent in 1997. So the trend lines are all in the right 
direction in terms of what we are doing.
    There has been consideration, another potential Vietnam, 
are we really bogged down in a morass that we can never extract 
ourselves from? If you look at the numbers, the numbers are 
going in just the opposite direction. We started off with 
roughly 20,000 troops in Bosnia. We then reduced to 15,000 then 
down to 12,000 then down to 10,000 then down to 8,500; and the 
President now proposes that we go as low as 6,900 for the 
coming months and, hopefully, a reasonable time. I will talk 
about that in a moment.
    But we have also seen something else. We have been very 
successful. I have been to the NATO meetings in Brussels. I 
have talked to all of my counterparts saying that the House and 
the Senate is serious. They have set a number of criteria. This 
is not the President's decision alone. He must certify to the 
satisfaction of the Congress that it is in our national 
interest to be there. He must certify how many troops should 
remain, for how long, as best can be determined, how much, and 
what this will do to readiness. He must do all of that in order 
to go beyond June of 1998.
    I also made it a point to say that I thought we needed 
something in between the forces and the police departments that 
we are trying to develop over there. The IPTF has been 
underfunded, but they have also been, I think, bolstered by 
contributions that we believe can be made now to have a 
specialized unit, for want of a better word, to serve as 
something in between our Armed Forces and the police as we try 
to professionalize them. And this is something that I think is 
a very positive story to tell, that we are getting 
contributions. The Italians and others have indicated support 
for such a concept.
    I think it is clear to virtually all of us that a stable 
Europe is in America's national security interest and it also 
depends upon America's leadership.
    You have already outlined the numbers that we have talked 
about as far as Bosnia for fiscal 1998, roughly half a billion; 
and fiscal 1999, $1.9 billion.

                             SOUTHWEST ASIA

    I would like to talk for just a few moments about Southwest 
Asia.
    Iraq clearly precipitated this crisis. It started back in 
late summer, early fall, to the point where they threatened to 
shoot down the U-2 flights that are under U.N. banner but are 
flown by U.S. pilots. General Ralston and I spent many moments 
together, along with General Shelton, concerned about what 
might happen should the U-2 flight ever be attacked. At that 
time I made a determination that we had to have much more 
firepower in that region to send a signal to Saddam Hussein 
that that was not going to be tolerated and he would be making 
a major mistake were he ever to fire upon that U-2 aircraft.
    Then there was a threat to perhaps somehow attack some of 
our forces or those of the allies in the region, and we built 
up our force under those circumstances. Say if Saddam Hussein 
was not going to comply with the U.N. resolutions, we might 
have to take action, should the President determine to do that, 
to compensate by severely degrading and cutting down his 
ability to threaten his neighbors with weapons of mass 
destruction.
    And that was the posture that we had been in until most 
recently with the Secretary General of the U.N. going to Bagdad 
and coming up with a memorandum of understanding.
    Where does that leave us right now? A lot of questions were 
raised last week in the aftermath of the signing of that MOU. 
Questions raised about Mr. Butler: Would he maintain his 
independence? Would he be undercut? Who would make up the team 
going in to see the so-called eight presidential sites? What 
would be their mission? Who would they report to?
    Most, if not all, of those questions have been answered, I 
think to our satisfaction, although we have to remain at least 
on guard to make sure that that--the assets we have received to 
date will not be eroded.

                            SITE INSPECTIONS

    But, essentially, Mr. Butler remains in charge. The group 
that will be going to the presidential sites in a couple of 
weeks will, in fact, report back through Mr. Butler. He will 
have control of that investigation as such, by virtue of the 
reporting policy. There will be, apparently, some diplomats who 
will go on that mission to witness the inspection process. They 
will not have any authority to conduct inspections, to do much 
more than to witness what is taking place.
    As you may or may not know, Scott Ritter recently went in 
and completed the most recent inspection, without any incident, 
into so-called sensitive sites that they have previously been 
barred from entering. So for the past 7 years, the U.N. teams 
have been barred from getting into certain sensitive sites.
    The positive aspect of this particular agreement is that 
all sites are now open to inspection. Nothing is off-limits. 
The presidential--so-called presidential sites will be 
inspected. They will be inspected by--through a regime that 
will report directly to Mr. Butler. So I think our goals of 
getting full, unfettered access have been achieved through this 
memorandum of understanding.
    With respect to Iraq, will it continue? That remains to be 
seen. I think we have to be constantly vigilant here.
    Saddam Hussein has had two goals in mind ever since the 
sanctions regime were put in place, and that is to get rid of 
the inspectors and get rid of the sanctions. So far, he has 
been unable to get rid of the inspectors. So far, he has been 
unable to get rid of the sanctions, but that undoubtedly is his 
goal; and we have taken the position that as soon as Saddam 
Hussein demonstrates that he is prepared to fully comply with 
all of the U.N. resolutions, relevant U.N. resolutions, then 
there will be light at the end of the tunnel in the way of 
lifting of the sanctions. But, in the meantime, I think there 
is a long way to go.
    I think we have obviously to test and to verify, and that 
is what--precisely what we are doing now. Saddam Hussein, I 
don't think, can be trusted. We are not going to trust him. We 
are going to test and to verify. There has been a historical 
pattern of delay, of deception and of outright lying. What we 
have to keep in mind is this is not something that is the 
equivalent of a 100-yard dash: He suddenly opens his doors, we 
go in and we find little, if anything, some of which could have 
been removed, and then the pressure will come for relief from 
sanctions.
    We have to make it very clear to the United Nations, to 
Saddam Hussein and to all of our allies, this is not a 100-yard 
dash. It is much more the equivalent of a marathon, that we 
have to be in for the long haul, we have to make sure that we 
are satisfied that indeed he is prepared to fully comply and 
not engage in a pattern, after a month or two, of more 
deception and more delay and more manipulation.
    And if we are satisfied, after a responsible period of 
time, that we can go from intrusive inspection to some other 
kind of regime with monitoring, with, again, spot inspections 
from time to time, then perhaps there can be relief provided 
under the sanctions regime. At least that would be my own 
recommendation.
    But I don't think we should be satisfied to simply go into 
empty buildings and find files that have been, in fact, the 
subject of an Iraqi search and destroy mission before the 
inspectors get there and say there has been full compliance.
    So it is not a short-term project. It is a long-term 
project, and it is one that there should be light at the end of 
the tunnel if, in fact, there is going to be a satisfactory 
demonstration of full compliance.
    I think there is something more. I think that Iraq has 
something of an affirmative duty here as well.
    It is very difficult to take a group of inspectors and to 
send them into a country as large as Iraq and say, go find 
where there may be either chemical or biological, either 
weaponry or manuals, residues or other types of indications 
that they have been engaged in the production of weapons of 
mass destruction. I think there is an affirmative duty on the 
part of Iraq to present evidence to support their claims of 
destruction.
    As I have indicated time and time again, Iraq has lied 
about their accumulation of biological weapons, anthrax, VX 
chemicals and other types of weaponry, their missiles. They 
lied, and they were caught in that lie, and they finally 
admitted that they had nearly 4 tons of VX, that they had some 
200--actually, 250--gallons of anthrax, that they have more 
weapons that have been weaponized with anthrax than they had 
admitted before.
    To date, the U.N. inspectors have yet to be satisfied that 
those systems have been destroyed. And so I think that, just as 
there is a duty on the part of the inspectors to go into Iraq 
to ferret out any suspicions they might have and any prospects 
they might have for finding chemical or biological or even 
nuclear weaponry, that the Iraqis have an affirmative duty and 
that is to satisfy the inspectors in terms of when, how, these 
systems were, in fact, destroyed.
    They should be able to give dates; they should be able to 
give places, times, circumstances and methods of destruction; 
and their failure to do so should not be construed in a way 
that is favorable to their interests.
    So I think they have to describe precisely how, when and 
where these systems have been destroyed; and, absent that, I 
think it calls into question the ability of the UNSCOM 
inspectors to satisfy themselves that they now can represent to 
the United Nations that the Iraqis no longer have the kind of 
chemical and biological weaponry as well as nuclear capability 
that they profess not to have.
    So, in short, the Iraqis have many promises to keep and the 
U.N. has many miles to log before Iraq gets any sanctions 
relief.

                       LACK OF SUPPLEMENTAL FUNDS

    With respect to the other elements of the requests, Mr. 
Chairman, natural disasters, you have touched upon this. I 
think that that is something that we really have to step up to 
as quickly as possible and, of course, the consequences of 
delay--what happens if? And I do have letters here, I won't 
take the time to read them at this time, but letters from all 
of the services saying, if we don't get relief from the 
requirement to fund our current accounts with a supplemental 
appropriation, it can, in fact, prove catastrophic for us.
    I will give you just a quick list of this.
    Michael Ryan, who is the Chief of Staff of the Air Force 
said the service would need to: Severely curtail or cease 
nonflying training; skill and proficiency levels would be 
reduced. The Air Force would curtail peacetime flying training; 
squadrons and wing aircrew readiness would be degraded. All 
nonmission critical travel would cease, further depot 
maintenance inductions deferred, and aircraft grounded.
    The list is fairly long here, and I will just submit that 
for the record.
    But a similar list has been put together by the Army as 
well.
    General Reimer has sent me a letter saying, here are some 
of the things that we would have to do if we don't get this 
soon, sooner rather than later, and certainly by the 1st of 
April they have to start making their plans on what they would 
have to reduce in the way of readiness and other types of 
training and operations.
    Mr. Young. Mr. Secretary, we will place all of those 
letters in our record.
    Secretary Cohen. I think that that would spell out the 
dimensions of the problems as far as we have.
    [The information follows:]

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                              IMF FUNDING

    Secretary Cohen. I would like to talk about the total 
package, something that I know is near and dear to all of your 
hearts, IMF and U.N. dues. Those have been included in the 
administration's supplemental request.
    I had the occasion, several--I guess it would be almost 
months ago now, to testify before the House Banking Committee, 
unusual experience for me. I never appeared before the Banking 
Committee before, but I was eager to do so, along with Alan 
Greenspan and Bob Rubin and Larry Summers.
    I attended that hearing because I had just returned from a 
trip to Southeast Asia. And if you just look at the IMF funding 
as simply an international financial transaction, funding of 
countries and companies who have been less than forthright in 
some of their dealings, then it is politically probably not 
saleable. But there is a major security issue involved here.
    There was some hesitancy on the part of IMF, I suspect, 
some in the administration and many in Congress, to deal with 
the situation in Korea. I talked with Secretary Rubin and with 
Alan Greenspan, and we appeared before a Republican caucus. 
There was a leadership meeting at the Library of Congress that 
we came up to; and, at that point, the four of us--actually, 
Larry Summers was there as well--tried to point out it wasn't 
simply a matter of international finance, it was a matter of 
international security. We have 37,000 troops in Korea.
    At that particular point, the Korean economy was pretty 
much in question. As a result of the commitment made by the 
United States to help out in that case, to lend our support, it 
made a big difference. It still is making a big difference.
    We have the Thai leadership coming to this country today 
and tomorrow. They have been a long-term and a long-time friend 
of the United States. Frankly, they were somewhat disappointed 
that the United States failed to show that we were interested 
in their financial difficulties. It is one thing to be a friend 
in good times; but when you are in need, you turn and look 
around and you find out, well, who is behind you under those 
circumstances?
    Frankly, there was some doubt because the United States was 
not quick off the mark to say, Thailand has been a major friend 
of the United States over the years, in good times and in bad; 
and when they were experiencing some difficult times they were 
looking around, and we weren't quite there on time.
    Since that time, I think we have made it clear that we 
intend to be reliable in good times and bad; and I made a trip 
to all of the Association of Southeast Asia Nations, ASEAN 
countries, including in addition I went to China, to make that 
point. It is critically important that we represent to our 
friends in that region that there is a security interest at 
stake. We have spent 50 years building up that region and our 
security interests and the level of prosperity that they have 
enjoyed and we have enjoyed as a result of it.
    I think that it would be irresponsible for any of us to 
simply remain indifferent to the economic situation there and 
dismiss it simply on the basis, well, they have got an Asian 
problem; it is not our problem. You will find very quickly that 
the Asian problem can present enormous problems in the United 
States as well.
    So I would hope, Mr. Chairman, that you would look at that 
favorably as well.

                          UNITED NATIONS DUES

    The U.N., I know, is controversial. There aren't many 
people who are eager to stand up for the United Nations. My own 
position is that, if you belong to an organization and they 
have dues required, you have to pay the dues; and if you don't 
like the way it is being run, you ought to change the 
leadership. You don't like the way the rules are being 
implemented, change the rules. Or, ultimately, I suppose, the 
option is, you can leave.
    I wouldn't recommend that in terms of the United Nations, 
for all of its faults. If you look around in terms of what we 
have been able to achieve working through the United Nations, 
and something that is overlooked when it comes to Iraq, 
frequently we hear there is only the United States and Great 
Britain involved in that. That is not true. We had as many as 
25 countries who have signed up to be part of any military 
operation in the exercise of any military option on the part of 
the United States. Twenty-five countries that weren't out 
there, you didn't hear much about them, but they were there, 
many through the United Nations, most through NATO itself.
    So I think that we benefit enormously from our leadership 
role in the United Nations, and I think that we have an 
obligation to measure up and carry out our obligations under 
them.
    With that, Mr. Chairman, I will yield to General Ralston.
    Mr. Young. Mr. Secretary, thank you very much. I hope you 
know that the members of this Committee have great respect for 
your insights and your views on these matters.
    [The statement of Secretary Cohen follows:]

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    Mr. Young. General Ralston, we will be glad to hear from 
you now. As I read your prepared statement, I was very 
impressed with the directness and the specific examples you 
gave us of the difficulties we would encounter if this 
supplemental is not treated as an emergency and not treated 
rapidly. So we would love to hear from you at this point.

                  Summary Statement of General Ralston

    General Ralston. Thank you, Mr. Chairman.
    As you mentioned, I submitted my remarks for the record. 
But I would like to, first of all, say how pleased I am to 
appear today and talk to you about some of the impacts to our 
men and women in uniform if we do not get this supplemental.
    First of all, all the members of the Joint Chiefs believe 
that our presence in Bosnia and Southwest Asia is very, very 
necessary. I think the Secretary has outlined the reasons for 
that. I will not spend any more time on that aspect of it but 
go to the supplemental request itself and what the impacts 
would be if we didn't get that.

                      SUPPLEMENTAL BUDGET REQUEST

    First of all, for 1998 supplemental we are asking for half 
a billion dollars for Bosnia and $1.4 billion for Southwest 
Asia; and that would cover the cost of sustaining our force 
levels that we currently have there in the Arabian Gulf for the 
remainder of this fiscal year. This request is an emergency, 
nonoffset proposal; and also we are requesting $1.9 billion for 
fiscal year 1999 for Bosnia.

                      IMPACT OF SUPPLEMENTAL FUNDS

    If approved, I can assure you that all the supplemental 
appropriations will go directly to the field and to the fleet, 
where they are needed. Without these funds, we will be required 
to divert money either from our readiness accounts or our 
modernization accounts or from both.
    If we transfer the funds from the readiness accounts, the 
services, I can assure you, will suffer from the impact. For 
the Army, the O&M funds would have to be diverted from training 
and maintenance. That would reduce their divisions to C-3 
readiness status--that is next to the lowest readiness status 
that we have--by the end of the year.
    The Air Force would have to reduce their peacetime flying 
training in the fourth quarter, for flight crews not engaged in 
contingency operations. Other combat aircraft units would be 
degraded to C-4. That is the lowest combat readiness status. 
With the flight training curtailed, the shortage of pilots that 
is already a serious shortage would be further exacerbated.
    The Navy would have to postpone shipyard maintenance on as 
many as 22 ships, which would affect future schedules and 
degrade the reliability and the long-term life of those ships. 
The readiness of nondeployed carrier air wings would slip 
because of the impact on training and maintenance.
    The Marine Corps would have to defer important maintenance, 
taking money from family housing projects and postponing the 
southern California storm damage repairs.
    To prevent such serious impacts on readiness, training, 
quality of life, the services, as the Secretary said, must know 
early in April if they will receive the nonoffset funding so 
they can make their plans. We are already, as you know, halfway 
through this fiscal year, which gives you much less time to 
accommodate a shortage.
    If we are forced to divert the funds from our modernization 
programs, then we will fall behind the investment goals that 
were defined last spring in the Quadrennial Defense Review. In 
fact, the supplemental funding that we are requesting is equal 
to 4 percent of each year's planned expenditure for 
modernization.
    That is twice the amount in this year's budget for 
modernization of the Army's main battle tanks and the Bradley 
fighting vehicles. It is double the number of Harriers and 
Ospreys in this year's procurement budget for the Marine Corps. 
It will buy more than a squadron of F/A18s for the Navy. And it 
would buy eighty new C-17s for the Air Force. Clearly, 
transferring money from the modernization accounts is not an 
attractive option, either.
    The 1999 budget request submitted in February reverses the 
trend of the past few years and meets the modernization goals 
that we established in the QDR. If we do not get the 
supplemental funding, then we will jeopardize those hard-fought 
gains that came out of the QDR.
    Mr. Chairman, without assistance from the Congress in 
funding the cost of these vital operations, we will pay a price 
in degraded readiness and quality of life and find ourselves 
with an aging inventory of systems and weapons.
    Mr. Chairman, I am grateful for the support of this 
Committee and the whole Congress for our men and women in 
uniform. I appreciate very much the opportunity to appear 
before you and to state my views.
    Mr. Young. General, thank you very much.
    [The statement of General Ralston follows:]

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    Mr. Young. Mr. Lynn, I understand that you do not have a 
prepared statement but that you are prepared to answer a lot of 
the questions.
    Mr. Lynn. Exactly right, sir.
    Mr. Young. I would like to yield the first period of 
questioning to the distinguished chairman of the Appropriations 
Committee, Mr. Livingston, a long-time member of this 
subcommittee.

                       Remarks of Mr. Livingston

    Mr. Livingston. Thank you very much, Mr. Chairman.
    Welcome, gentlemen. It is a pleasure to see you all. I 
would like to just hit on a couple of points that you all 
raised and then ask you to expound on my remarks, if you will.
    First of all, I appreciate your comments about the 
supplemental. It has been the practice of the Majority, since 
the Republicans took the Majority, to pay for supplementals, be 
they emergency or nonemergency. This year may represent a 
departure from that fact; and if it is a departure, it is only 
because many of us perceive this issue as a real emergency.
    You all collectively, Secretary Cohen and General Ralston, 
have given us, in your statements, some of the problems that 
would arise if, in fact, either we don't provide the 
supplemental or, secondly, provide it and then just force you 
to take it out of the Defense Department's hide.
    In addition, I have noted articles which relate to 
personnel furloughs and layoffs, delays or cancellation of 
personnel moves, cuts in training of nonforward deployed forces 
and delay or cancellation of planned repair and maintenance; as 
well as the fact that we have about 73 percent of the young 
sailors that we need in the Navy, that there is a serious 
manning shortage in pilots in the Air Force and in some of the 
other services; that tanks and planes are not up to snuff.
    That concerns all of us. And while I don't think that this 
$2 billion in supplemental is going to remedy all of these 
problems, I do hope that the administration is going to take 
steps in fiscal 1999 to begin to address some of the more 
serious drawbacks.
    But that leads me to one point I want to make. In the 
President's request, notwithstanding the fact that we have been 
in Bosnia now over 2 years, maybe 3, he makes no request in 
fiscal year 1999 for Bosnia, let alone any request for Iraq; 
and we have only been there the last few weeks. If the 
President truly wants to look out for the needs of the Armed 
Services, it seems to me he would want to request these in the 
normal tradition of events or sequence of events rather than 
all of a sudden, at the last minute, coming to Congress and 
saying, look, I have got an emergency, please deal with it.
    This is not a problem that we have to be concerned about 
now. You have got a $2 billion shortfall, and I think most of 
the members of this Committee are prepared to deal with that 
shortfall as an emergency. But when you get to fiscal 1999, 
that is another problem altogether, and I do have a big 
question as to why the President didn't ask for the money for 
Bosnia when, in fact, he is looking at some very serious 
shortfalls in his overall defense posture.
    Mr. Secretary, you mentioned IMF, and I want to assure you 
that nobody that I know is indifferent to the concerns of the 
Asians or to the people in the newly independent states. In 
fact, we wish to be of help wherever possible. That is why we 
have had foreign aid programs over the years.
    But I just came from an event actually stretching over a 
few hours here on the Hill in which some very prominent 
economists, noted academics, not the least of which were people 
like Paul Wolfowitz, George Schultz, Milton Friedman and the 
like, participated, saying that, yes, we have problems, but IMF 
isn't the solution to those problems or the way IMF has been 
administered over these many years has not represented an 
improvement in the world economic situation but, in many 
instances, has aggravated it.
    So while we will not turn a deaf ear or a tin ear to a 
request by the administration for relief with the IMF, there is 
some real and solid academic division of opinion about the 
efficacy of the IMF, and that is going to be hashed out in the 
Congress before that money is actually approved. And I think 
that the American people will require that of us.
    With respect to Bosnia alone, I remember that when we sent 
the troops in, wherever that was, one of the conditions that I 
felt was imperative was that we not use U.S. troops to dig up 
land mines; that we not use U.S. money to repair buildings that 
were blown up by Europeans; and that we not become a police 
force going after the war criminals.
    In my opinion, I thought that those were functions that 
were required of the Europeans. If they want us to help in 
preserving the peace, to keep people from killing one another, 
that is why we will go, and that is what we have accomplished. 
But to put our troops in harm's way or to unnecessarily expend 
taxpayers' dollars for buildings that may just well be blown up 
a month later all over again just strikes me as a mission that 
we need not take on, and I would be curious to hear exactly how 
you perceive our mission in Bosnia now.
    Finally, I am concerned about the preliminary reports that 
the Joint Chiefs are rejecting the findings of the Kassebaum 
commission on sex in the military. We would like to hear what 
you have to say about that.

                          READINESS SHORTFALLS

    Secretary Cohen. All right. All in a 5-minute time frame?
    With respect to some of the issues, Congressman Livingston, 
that you point out, Mr. Chairman, we have tried to address the 
shortfalls in readiness this year.
    In the fiscal 1999 budget, we added a billion dollars to 
deal with some of the readiness issues. It won't take care of 
all of the problems, but we are also trying to manage those 
issues, particularly in the Air Force and some of the other 
special problems that we have as far as the overutilization of 
units that are said to be low-density, high-demand.
    I know that General Ralston has been working with the Joint 
Requirements Oversight Council, JROC, very assiduously on this. 
Perhaps he can add a few comments in terms of the new 
management techniques that are involved, where we don't have 
the problem of calling upon those select units time and time 
again to the point where they want to leave because they are 
overworked. But we did put in a billion dollars in the fiscal 
1999 budget.
    You asked the question, why didn't we think of requesting 
money for Bosnia in fiscal 1999? And the short answer is, we 
started putting this budget together back in June, July, 
August, all the way up through December; and we had to finalize 
it by December to have it before the Congress. So there was no 
intent at that point to remain in Bosnia. So neither the 
President, myself, Bill Lynn nor anyone else had any notion 
that we were going to be there beyond June of this year and, 
frankly, had planned that we had enough to carry us through. So 
that is the reason it wasn't included. A decision was not made 
until--certainly until the end of January and the beginning of 
February.

                      INTERNATIONAL MONETARY FUND

    With respect to the IMF, there is a difference of opinion 
in the intellectual community, the financial community.
    I have listened to Chairman Greenspan, for example, testify 
before the Banking Committee--and he would probably agree with 
you; I would rather let him talk for himself--but saying that 
we need to have some kind of a new vehicle to deal with the 
problems that we are likely to confront in the coming years. 
The difficulty is, we don't have another vehicle right now; and 
it will probably take several years to formulate one. In the 
meantime, we have an immediate crisis.
    So the question becomes, do you deal with the situation 
that we have and perhaps amend it, modify it, insist upon 
certain guidelines that ought to be followed or simply say 
let's wait until we can put together a new formulation for the 
future? And that is sort of the dilemma that we have right now.
    I can say that, with respect to South Korea, when I went 
there, they were very gratified. The new leadership was 
gratified to see that the United States was going to be 
supportive of helping them get through their current economic 
difficulties. I can tell you that Thailand feels the same way.
    So we have many countries that have been strong friends 
over the years who have looked to the United States for 
leadership. And the only vehicle we have had really is the IMF 
fund, and it has been important to their survival, and they are 
not out of the woods yet. They still have some very difficult 
decisions to make and some difficult domestic problems to 
encounter. So no one should feel relaxed about the situation 
throughout all of southeast Asia, particularly in Indonesia 
right now.
    I might point out that the IMF has withheld any further 
funding to Indonesia until such time as they are satisfied that 
some changes are going to be made. So, again, I suspect we can 
criticize and be critical of the way the IMF is situated today, 
but we don't have anything else right now, and there is a 
situation that I think demands immediate attention.

                     U.S. FORCE PRESENCE IN BOSNIA

    With respect to the mission in Bosnia, the mission hasn't 
changed. War criminals, for example, under Dayton, the U.S. 
troops were not to go out and hunt down war criminals, but if 
they were to come into contact with them and the situation, 
tactical situation permitted, they were, in fact, allowed to 
make arrests.
    Many of the war criminals have turned in voluntarily. We 
had 10 Croatians who surrendered early last fall. We had, most 
recently, three Serbs, indicted war criminals, who have 
surrounded voluntarily.
    So the momentum is all in the direction of this, seeing 
that the handwriting is on the wall, there is no statute of 
limitations, they are going to eventually come before The 
Hague. Frankly, they have seen this; and more of them are now 
starting to come forward saying, I would rather take my chances 
before The Hague than to be possibly accosted or apprehended by 
any of the Stabilization Force, SFOR troops. So the mission 
remains the same.
    The digging up of land mines. General Ralston could perhaps 
correct me on this, but we have dug up the land mines to 
protect our troops for force protection.
    We have not undertaken a mission of clearing the entire 
region of land mines. That is another subject I would like to 
talk to you about in terms of land mines legislation. There is 
a prohibition to take effect for fiscal 1999 that would ban the 
use of all mines on the part of the United States. That would 
put our troops in great jeopardy, and require us to increase 
our forces by several hundred thousand in order to compensate 
for the absence of those mines during that one fiscal period.
    So we have got a serious issue to address as far as land 
mines are concerned, but that is for another day.
    But I am not aware that we are using the funding for the 
repair of private buildings. That is something that I will have 
to look into in terms of what is being done. But that is not my 
understanding, and I will get a detailed breakdown for you for 
everything that the money is being spent for. I have asked Bill 
Lynn to travel to Bosnia to meet with General Clark to get a 
full accounting of how the money is being allocated for that 
region. But the mission remains the same.
    Mr. Livingston. Thank you.
    Mr. Young. Mr. Murtha.

                         DEFENSE BUDGET SAVINGS

    Mr. Murtha. When I asked the question before, it looked 
like to me that when I said the Defense Department may have 
some money hidden away, we have over the years found that the 
Defense Department is not always upfront with us about money 
that they have.
    For instance, I remember unobligated balances just happened 
to pop up one year of $4 billion, and inflation figures keep 
getting changed. For instance, one of the real pluses from what 
happened in Iraq is the stability of gas prices. If we hadn't 
gone into the Middle East, I am convinced gas prices would have 
dramatically increased if they thought Saddam Hussein was going 
to control them. This will obviously affect us back here and 
also will affect the Defense Department substantially.
    I think the price of gasoline and the fuel, which is such a 
big part of our economy. They tell me airlines are making a lot 
of money. Well, the Defense Department is buying fuel a lot 
cheaper right now, I would assume, so there is some money 
there. So when I say I hear rumors, this defense Committee 
staff has all kinds of ways of finding out things. Sometimes we 
are wrong; sometimes we are right.
    But do you have any money or have we finally run out of all 
the means we have had in the past in order to find money to 
offset this supplemental?
    Secretary Cohen. I would yield on the gimmicks question to 
Bill Lynn.
    Let me respond on the inflation savings, for example. There 
have been inflation adjustments. We don't call that. OMB calls 
that. But when we are allowed to keep inflation savings, that 
money goes for other things, such as increases in health care 
costs, increases in readiness, all the other things that we 
have been shortchanged on. We take that money and those savings 
for that year and put those into cost of life factors involved.
    So there is no giant pot that we have. We allocate it and, 
of course, you have an opportunity to pass upon that each year 
in the appropriations.
    Someone asked in the other body about this $27, I think, 
billion dollar windfall that the Department got over the FYDP; 
and we said, here is the money and how it is allocated for 
procurement. For example, we are going to meet our goal as far 
as getting up to that $60 billion mark that had been set by 
General Shali in the past. Here is the money, and we are now 
allocating for modernization. We take those inflation savings; 
and we allocate them; and you, of course, have to approve them 
each year.
    But I will yield to the comptroller to talk about gimmicks 
that have been utilized in the past by other administrations.
    Mr. Murtha. What we would like to know is, have we run out 
of all of those hidden surpluses that we used to use in order 
to balance the conference out at the end or in order to take 
care of supplementals?
    Mr. Lynn. Mr. Murtha, I think some people have the 
impression that there is a safe in the Comptroller's Office 
where all the extra money is hidden. I have only been there a 
couple of months, but I have thoroughly searched the office, 
and the safe isn't there.
    If we had to offset this supplemental, of course, we would 
look for anything we could find to ease the pain. I think it 
is, though, quite clear that for a $2 billion price tag there 
is no gimmick, there is no trick, there is no amount of money 
that will keep you from the kinds of things that the Secretary 
and the Vice Chairman described in terms of the impact on 
readiness, on modernization, on the overall quality of life of 
the troops.

                           BUDGET SHORTFALLS

    Mr. Murtha. Well, one of the things we get concerned about 
is when people testify before the Committee they always try to 
justify the budget; and, rightly so, because that is the budget 
that was sent up. But sometimes it gives us misleading 
information about really how much money you have available.
    For instance, last year, right after the problem at 
Aberdeen, I went there and several other Army bases to look at 
the situation; and I very quickly found out that they didn't 
have enough drill instructors, enough supervisors, enough 
training time; and I reported that to the Secretary.
    I also went down to the Training and Doctrine Command, 
TRADOC. TRADOC said, we have known that right along, but we 
didn't have the money. But when they appeared before the 
Committee, they didn't tell us they didn't have enough money 
for drill instructors, for training and for supervisors; and, 
consequently, it resulted in this problem.
    Those are the kind of things we have to know if we are 
going to make the appropriate decisions for the Department.
    There is no question in my mind, we have been hearing for 3 
or 4 years a readiness problem, a spare parts problem--
sometimes it is not as stark but as a whole. I went 4 years ago 
to Fort Hood, and I found no infantry in the Bradleys. I just--
and they said, well, there is infantry in the Bradleys in the 
front lines. Well, I went to Korea this year, and there is no 
infantry in the Bradleys.
    Now, you know, we are to the point, I think, where we are 
very close to being broke; and I think, Mr. Secretary, 
everybody in the Department has to be more straightforward with 
us. And I know you have been and the Comptroller. But we have 
to know the facts or we can't make the appropriate decisions.
    So I appreciate what you go through in trying to protect 
the administration when you get a certain allocation, but if we 
don't know the consequences, how serious they are, we certainly 
can't make legitimate judgments and make distributions that are 
absolutely essential to our national security.
    Secretary Cohen. Congressman Murtha, if I could respond, 
you know, when I came up to present the QDR last year there 
were complaints that, well, this is really a budget exercise, 
it is not really strategy driven. I took issue with that. It is 
strategy driven, but it is also within a, quote, constrained 
budget environment. How do I, as Secretary of Defense, put 
together a plan for the future in terms of how we are going to 
allocate our resources if I say we have unlimited budget 
authority here?
    I said $250 billion is probably as much as we are likely to 
see, absent a war or a conflict in the foreseeable future. 
Likely to see the same level plus inflation, given the fact 
that there is also a very strong movement on the Hill for a 
balanced budget. So I had to try to plan saying, ``Assuming 
that we had this amount of money, how do I allocate it?'' And 
that is always the problem.
    If we have a shortage of readiness, I take money out of 
modernization, I have to allocate it there. You take a look at 
modernization. You say, where is the investment? I say, okay, I 
have to put some more money back in here. When I have a limited 
amount and we, in fact, have a balanced budget environment, it 
becomes very difficult to maintain a static level of perfection 
in all of the accounts. So it does take a lot of management.
    General Ralston can perhaps talk to you about what we are 
trying to do in terms of how we deal with these issues as far 
as shortages are concerned, what is the real assessment. 
Because I have been concerned about that. Are we getting the 
real facts? Because Chairman Shelton, who is on his way back 
from the Gulf right now, will talk about anecdotal evidence. 
You get it, others go out in the field and get it, but is it 
filtering up through the system?
    General Ralston has been working, just came back from a 
long session with the JROC, and perhaps he could give you just 
a brief response on this issue. Because it is a problem. And we 
want to make sure that you get the facts, that I get the facts, 
so I don't have to say, oh, sorry, Congressman Murtha, we are 
totally ready and what you have heard is inaccurate.

                            READINESS TRENDS

    General Ralston. If I could address that, Mr. Chairman. We 
did look at this, and we have been looking at this at the Joint 
Requirements Oversight Council, along with senior leadership, 
to try to come up with a series of metrics, that can measure 
the readiness and the OPTEMPO and the PERSTEMPO on our people. 
And if we know what the real situation is, then we can take 
some management actions at our level.
    For example, the Airborne Warning/Control System, AWACS 
aircraft, we only have 33 AWACS airplanes. One of those is a 
test airplane. Four are always in the depot for maintenance. 
Four are in the schoolhouse. Pretty soon you are down to only 
about 20 or so airplanes that you can use.
    We know that we can keep about nine of those airplanes 
deployed at any one time. If you go above that, then you are 
driving your people in the ground.
    So, today, we have five airplanes in the Gulf. We have 
three airplanes in Turkey enforcing the no-fly zone over 
northern Iraq. We are already at eight airplanes there. That--
so we have to cut back.
    So what have we done? We have drastically cut back on the 
AWACS flying counterdrug operations in Central and South 
America, not something that we want to do, but we have to make 
some tough choices in order to not really impact our people and 
impact our readiness.
    Mr. Murtha. Let me just say one last thing, that I think 
this is as honest a budget as we have gotten. And when I say 
honest, I mean I think it has a good balance; and I think the 
Chairman would agree. We have looked at this and we probably 
won't make as many changes as usual because it is such a good, 
solid budget with what you have got to work with.

                           BALKAN DEPLOYMENTS

    Mr. Young. I certainly would concur that it is a better 
budget than we have seen in recent years, more realistic. 
Unfortunately, we are not going to have the additional funds to 
add for fiscal year 1999 that we have had in the past.
    A quick question on Kosovo, Macedonia, et cetera. What I 
see developing here is another not exactly like Bosnia, but we 
are getting requests for extending U.S. presence there. And, of 
course, the U.S. presence in Macedonia is under the sponsorship 
of the United Nations, but they are still U.S. troops that are 
there.
    Several members of this Committee, as I said, went to 
Bosnia this past weekend; and we were impressed with the job 
that our military forces have done. They have pacified the 
country. They have done a good job.
    From a military standpoint, I think we have got an A-plus-
plus-plus. The concern, though, is the only reason that we have 
done that is because of the presence of the United States.
    We conducted a townhall meeting in Brcko. We had 
representatives from the Muslim population and the Serbian 
population. It was in a rather small room, but we started out 
in a very friendly way. But, Mr. Secretary, about 10 minutes 
into that session, they were up pointing the fingers and 
yelling at each other and shouting at each other, and they were 
ready to fight again.
    We were there, so they didn't get into violent fighting. 
But if we weren't there----
    Secretary Cohen. Could have used you at Ohio State.
    Mr. Young. Well, I don't mean me personally. I mean the 
United States forces. Because they were there as well. And Ohio 
State is probably something most of us would like to forget 
about.
    And I understand that the elections are coming in 
September, and I think we really can't make a judgment there 
until we see how those elections are conducted and whether or 
not the people in the country would allow the results of the 
election to be ratified and the people who are elected to be 
actually put in place and hold the offices. If that doesn't 
happen, then I think we have got real serious trouble, and the 
$487 million we are talking about now will just be another down 
payment.
    So I think we have got to get really serious about how we 
deal with situations like Bosnia or Kosovo, which could become 
even more serious because of international implications.
    You don't have to respond if you don't want to. You can, if 
you would like.
    Secretary Cohen. Well, I will respond briefly, Mr. 
Chairman.
    With respect to Bosnia, could it go the other way, could it 
go south quickly? The answer is, sure. Are the trends that we 
see today still in the right direction? I think the answer is 
an overwhelming yes, as a result of our presence and our 
leadership and our command.
    What you see today you would not have believed 2 years ago. 
There has been a dramatic change, and we have been primarily 
the ones who have generated that. We have had the support, 
obviously, of the NATO alliance; and we shouldn't minimize 
that. But it has been American leadership that has produced 
that.
    It is always possible for the parties to break apart, start 
shouting, start shooting at each other. And we would say, have 
we made a good effort and what is the consequence of our not 
being involved here? I think that we have to look at the 
opposite. If we say, let's pull out tomorrow, which this 
committee, this subcommittee, is not recommending; but if we 
were to leave tomorrow, we can pretty much predict what would 
take place. But if we give those institutions a little more 
opportunity----
    And I can't define it. You asked about this in your opening 
comments, can we define when that time will come? But, as you 
see, things start to take place. There is a slow buildup, and 
suddenly you are seeing things take place on an accelerated 
basis that would not have been imaginable a year ago or even 6 
months ago. So no one can really predict the future to you, for 
you, but what we can say is that the trends are in the right 
direction.
    With respect to Kosovo, we are all concerned about that. 
The Europeans are concerned about that.
    I talked to the Italian Minister of Defense today dealing 
with the Aviano incident, and that is a report that will be 
coming out tomorrow on that tragic event.
    But the first question, of course, became we should look 
very closely at what is taking place in Kosovo, because it 
could spread all the way into Albania, involving Greece and 
Turkey, and you could have a real serious situation on our 
hands really quickly. So it is going to require some diplomacy.
    As you know, Secretary Madeleine Albright has been very 
engaged, just came back from Europe urging restraint on both 
sides, on the part of Kosovars and also on the part of 
Milosevic; and there may be more sanctions that flow from his 
failure to restrain the Serbian police.
    But we have to be as vigilant and as involved as we can, 
but this does not mean that we have to be militarily engaged in 
every incident. So we are hoping that our European friends will 
also take some initiative here and that collectively we can 
perhaps hold this back from becoming a major problem.

                                 KOSOVO

    Mr. Young. Mr. Secretary, while we were in the region, I 
went to Macedonia and I visited with the foreign minister; and 
we went to the border between Macedonia and Kosovo to one of 
the outposts there. They want an American presence there, a 
much larger American presence, because they are frightened.
    There has been some indication, at least in the media, that 
we might be sending more Americans there as Americans. And this 
may be something that would have to be done. But it just seems 
to me that before these commitments are made--since you have 
been Secretary, we have had much better communication and 
consultation between the executive and the legislative, but so 
far, we have had to come up with the money after the fact, 
after the commitment was made. I think many of us would feel 
better if we were in on the takeoff as well as the landing when 
the bill came in.
    Secretary Cohen. I would agree with that.
    Mr. Young. Mr. Dicks.

                 FISCAL YEAR 1998 SUPPLEMENTAL REQUEST

    Mr. Dicks. Thank you, Mr. Chairman.
    Let me make sure I have an understanding of what is 
requested here. As I understand it, the President is requesting 
that the DoD fiscal year 1998 unfunded requirement be met by 
nonoffset emergency supplemental appropriations. I think we all 
understand that.
    Similarly, the President is proposing a nonoffset emergency 
fiscal year 1999 budget amendment to fund the unanticipated 
costs of extending the mission in Bosnia through the fiscal 
year. The administration included an allowance in the 
President's fiscal year 1999 budget of $3.2 billion to cover 
the cost of contingencies like Bosnia, Southwest Asia and 
natural disasters.
    So we not only have a budget amendment for the 1998 budget, 
but an amendment to add $3.2 billion to the 1999 budget?
    Secretary Cohen. I will let Bill Lynn respond to that.
    There would be an allowance in the 1999 budget of $3.2 
billion for Bosnia and Southwest Asia. That is an allowance for 
unanticipated contingencies. As such, that could be drawn upon, 
as I understand it.
    Bill?
    Mr. Lynn. That is right. As we were putting the budget 
together, we knew that there would be additional costs in 
Bosnia and Southwest Asia; but, as the Secretary indicated 
earlier, we hadn't had a final decision. We did not know the 
exact amount, and they had not been anticipated within the 
balanced budget agreement framework in which the defense 
numbers were settled on.
    So what we did, working with OMB, was identified an 
allowance in the 900 section of the budget. The number you said 
is absolutely correct, $3.2 billion. That was primarily 
intended--and I think OMB has in mind the first call on that 
would be Bosnia and Southwest Asia.
    Of that $3.2 billion, essentially this budget amendment 
that has come forward to you in the last week offered to the 
committee that $1.9 billion of that $3.2 billion is what would 
be required for the 1999 Bosnia costs. So they were covered in 
the budget submission in February, the $3.2 billion allowance. 
We are now giving you the specifics on Bosnia.
    Mr. Dicks. That is part of the 1999 budget. We are not 
asking for $3.2 billion on top of the 1999 budget?
    Mr. Lynn. No. That was included in the 1999 budget. We 
provided the specifics on Bosnia just in the past week. We 
didn't have them prior to then.
    Mr. Dicks. So if you don't get this money or it has to be 
offset, you are going to have to go out and literally tax every 
base throughout the country, in terms of cutting back on 
training, cutting back on real property maintenance----
    Secretary Cohen. Depot.
    Mr. Dicks [continuing]. Hiring of civilians, doing overhaul 
repair work on ships. I mean, all of those things will happen 
and that will lower the readiness of our remaining forces that 
are nondeployed. Is that not correct?
    Secretary Cohen. That is correct.
    General Ralston. Right.
    Mr. Dicks. And, General Ralston, you think this is a 
serious problem?
    General Ralston. Congressman Dicks, I think it is a very 
serious problem if we are not given the supplemental.
    Mr. Dicks. But if it is offset, it comes right out of your 
hide.
    General Ralston. If it is offset, it comes right out of our 
hide. It is a very serious issue, both for our readiness and 
for our modernization efforts.

                     ADDITIONAL BASE CLOSURE ROUNDS

    Mr. Dicks. What bothers me is that we have not only this 
issue but another issue that the Secretary presented to us in 
BRAC, and that is the necessity for two additional rounds of 
base closure. You know, if we don't do that in the 
Supplemental, then a situation would exist in which we would 
not have the money for modernization and the other things that 
we think we have to do in the future. Isn't that correct?
    Secretary Cohen. That is correct. I mean, it is a problem--
it won't impact upon you, Congressman Dicks, or most of us 
here. But the long-term implications are that, as we move into 
the next century, we are talking about procurement items. If we 
don't have a reduction in the overhead, then we will not have 
the funds necessary to make the investments for the new 
technologies in 2010, 2012, in that time frame.
    Mr. Dicks. So both of those things are important in terms 
of looking at the future for defense modernization. That has to 
affect us getting up to $60 billion, though, doesn't it, at 
some point, if we don't do the first round of BRAC?
    Secretary Cohen. In 2001, we will hit the $60 billion mark 
as far as allocation for investment in the future. But that can 
be sustained only so long into the future. If you say that in 
the year 2003, 4, 5, and 6, as you start get down that track, 
that we are not making the kind of overhead reductions 
necessary, then you won't be able to sustain it. That is 
correct.
    Mr. Dicks. Congressman Murtha and I both came on this 
Committee in 1979, and we had very serious readiness, the 
hollow force, retention problems; and we underfunded the 
military. Then, all of a sudden, people started leaving in 
droves. We had problems with pay and benefits. We had to then 
come back, starting in about 1980, and put a lot of money back 
in to try to build back up our force structure and our 
readiness; and we had a lot of units that would be at C-3 and 
some possibly even at C-4 levels.
    So I think this is a very critical moment; and I just hope 
that we can build the support in the Congress for supporting 
this supplemental. And I don't think it should be offset. We 
are on the verge of a balanced budget, if we don't have one, in 
fact, and I think this will hurt us if we can't get this done.
    I just would urge those people who always say that they are 
in favor of a strong defense, that once in a while you have got 
to step up and vote for defense. I think this is going to be 
the biggest vote this year, on whether you are for the Defense 
Department and for the kids who are deployed. I just hope that 
we can get the support, and I hope it will be very bipartisan. 
I know that Mr. Murtha and I will do everything we can to help 
you in this respect. But I think this is very crucial.
    Thank you, Mr. Chairman.
    Mr. Young. Mr. Lewis.

                         SECTION 900 ALLOWANCES

    Mr. Lewis. Thank you, Mr. Chairman.
    I am not sure, Mr. Secretary, exactly what I heard in your 
exchange with Mr. Dicks. I think General Ralston, you were 
saying that--or maybe it was you, Mr. Lynn--that there was a 
$3.2 billion allowance in the 1999 budget request?
    Mr. Lynn. Not in the Defense budget request, but in the 
Federal budget request.
    Mr. Lewis. The Federal budget request?
    Mr. Lynn. Yes. It is in the 900 section of it.
    Mr. Lewis. The 900 section is what?
    Mr. Lynn. It is just the allowances section.
    Mr. Lewis. So you are essentially saying it is in this 
request.
    Mr. Lynn. If I could explain, sir?
    Mr. Lewis. Yes.
    Mr. Lynn. The $3 billion was put in the allowance section 
because we didn't have the specifics of what the Bosnia 
deployments would be at that time. And what we planned to do is 
what we have done, is to come forward with the specific budget 
amendment saying how we would lay out the planned expenditures 
for that $3.2 billion. The Bosnia request would be $1.9 billion 
of the $3.2 billion.
    Mr. Lewis. Speaking of Bosnia just for a moment, we have 
had a lot of discussion regarding how long we have been in 
Bosnia--longer than most of us anticipated. We had those 
discussions not only during the time that you have been 
Secretary but also when you were in the U.S. Senate, as a 
matter of fact.
    One of the rationales for Bosnia and our presence there 
involves the very thing that the Chairman was talking about, 
the need for stability. When you looked at Kosovo and 
Macedonia, and all of us talk about the history of a lack of 
stability there and the problems when we have ignored it in the 
past.
    I am trying to figure out in my head, of the $1.9 billion 
that is now being requested here, how much of that relates to 
stability to the south, to places like Macedonia?
    Secretary Cohen. That $1.9 billion really is----
    Mr. Lewis. Just for Bosnia?
    Secretary Cohen. It just for Bosnia.
    Mr. Lewis. I assume we are going to have expenses that you 
are beginning to anticipate for ongoing activity just south of 
Bosnia?
    Secretary Cohen. Macedonia.
    Mr. Lewis. Yes. Do you have any idea of what those might 
be?
    Secretary Cohen. No.
    Mr. Lewis. Okay. I kind of thought that that was the case.
    One of the things that I wanted to raise in connection with 
all of that is that----
    Secretary Cohen. I mean, it is hard--it is hard to predict, 
if there is going to be a riot that takes place in Kosovo and 
the Serb police will come in and crack down, whether or not the 
Serbian Army is going to be supplying--I mean, all of that is a 
matter that you really can't anticipate. You hope that it won't 
take place. If it does take place, you look to discourage it in 
the future. But no one can give you an assurance of and put a 
price tag on it, in terms of looking into the future as to what 
it is going to cost.
    So that is part of the era in which we are living today. It 
is an era that has a lot of instability, a lot of potential for 
ethnic conflict and breakout.
    Mr. Lewis. Which is precisely where I was going to go next. 
It seems to me that that portends not just to supplemental or 
allowances that may be used for contingency. It suggests that 
this is a much longer term thing than this year's budget, next 
year's budget.
    Secretary Cohen. Sure. You know, it is one of the great 
challenges for all of us. And I say all of us because you are 
the coequal partner. You may even be the senior partner. 
Because you control all the purse strings, and we are just the 
junior partner in this effort.
    But if you look and try and say, where do we go with our 
strategy, the QDR? I spent a lot of time working on that, and 
you will find that, well, there are some people who disagree, 
that the QDR really hasn't looked far enough into the future. 
What we ought to do is take more risks today, that we ought to 
have a substantial reduction in the size of our forces, take 
the savings and put it into new technologies for the future.
    I think that is great to do, except for one thing: How do 
we deal with the problems that we have today? That if you take 
and cut down the size of the force, you would have significant 
savings, you can put those savings into new technologies, but 
you still have a Southwest Asia to contend with it, be Iraq or 
Iran. You still have Korea. We don't know how that is going to 
unfold.
    So you have all of the current missions that we have that 
no one I know of is willing to give up in the short term. Plus 
you have all of this rise of ethnic tension and conflict and 
potentiality that is going to require us to, on a year-by-year 
basis, to say, where are we going with our defense budget?
    I think the issues being raised here are important ones. I 
think it will be important, next year, for example, when the 
walls come down between--in the balanced budget agreement, as 
to whether or not you feel it would be possible to get more 
money out of domestic spending and put it over into defense, or 
whether or not there will be those who will argue that we 
should be cutting back on defense and putting it into social 
programs. I wouldn't want to take bets on that right now.

                  BUDGETING FOR CONTINGENCY OPERATIONS

    Mr. Lewis. Which is the next place I am going after this.
    But, Mr. Chairman, I hear from this discussion, really, the 
Secretary saying--and I know that Mr. Lynn, certainly General 
Ralston, wouldn't be contradicting it--you are really saying we 
are going to be having this kind of budgetary commitment within 
a significant piece of our defense expenditures for some 
considerable time.
    Secretary Cohen. I think everyone who has looked at the 
future has seen that we are likely to see, quote, asymmetrical 
threats. You are not likely to see someone challenge us head 
on. There aren't many countries that could do that. But you are 
likely to see not only asymmetrical threats to our security but 
you are likely to see a rise in the kind of tensions and 
conflicts that we are witnessing now in various parts of Europe 
and over in the Caucasus areas. So that is a potential.
    How do you budget for that? How do you prepare now for 
that? That is a debate that needs to take place as to whether 
or not the Congress of the country and the administration are 
willing to say, we can budget X amount to have as a contingent 
fund to take care of these unknown possibilities.
    I think we would be hard-pressed--I am not sure that the 
Congress is going to give that kind of contingent funding to 
any administration, other than saying that we want to have 
control of the purse strings, and we will play it year by year. 
If you need money, you will come back and you ask us for it; 
and, hopefully, we will give it to you. But I don't see 
Congress, at least based on my experience, saying, you know it 
is an unstable world and we think you need about $10 billion to 
$15 billion as a little wedge over there to protect yourself in 
the future.

                        FORCE PRESENCE IN BOSNIA

    Mr. Lewis. I don't think I can have time to go back to the 
reverse fire walls which we are going to take each other to in 
a moment, but could you answer a specific about Bosnia and the 
ongoing presence of our troops but also having others take over 
responsibility?
    The existing land mines are a very, very big problem. I 
understand that the Slovenians are involved in a fund that 
relates to mine removal, and we are going to participate in 
that in some way. Are you going to be asking for a 
reprogramming or otherwise in connection with that activity?
    Secretary Cohen. I can't give you an answer on that right 
now, but I will get back to you before--within the next 24 
hours or so to see where that is.
    [The information follows:]

    No. Our understanding is that some Member of Congress may be 
interested in earmarking funds from the Emergency Supplemental for the 
Slovenia Trust Fund. We welcome new support for demining in Bosnia as 
long as it reinforces Bosnia's efforts to develop a self-sustaining, 
indigenous demining capability.
    The Government of Slovenia (GOS) is partnering with Dyncorp, a U.S. 
contract or, to launch a new demining initiative in Bosnia. Slovenia 
has created a trust fund which would serve two purposes: first, to 
demine fields in Bosnia; and second, to employ and train Bosnians to 
establish their own civil protection unit. The GOS is asking donors, 
including the U.S., to contribute to this fund. Slovenia views the 
project with great importance, as it may demonstrate to the 
international community their decision to contribute to the stability 
and development of the Balkan region, thus aiding the Slovenes' quest 
for NATO membership.
    The Slovenian project is still in the initial stages of 
development. We have serious concerns about where Slovene support may 
be most helpful. Victim's assistance appears to be an area where 
Slovenia may be able to help the Bosnians.
    The international community is successfully assisting the Bosnian 
government in establishing a self-sustaining demining capability. We 
have encouraged the Slovenes to consult carefully with the Bosnians to 
ensure there is close coordination of effort.
    It is too early to tell if something worthy of U.S. contributions 
will emerge from this process. Therefore, we believe it is premature to 
commit funding to the Slovenian Trust Fund. We certainly oppose any 
effort which draws funds away from far more important programs in 
urgent need of resources now.

    Secretary Cohen. Obviously, we want other countries who 
have expertise in a particular area, if they want to contribute 
to this effort in Bosnia, we are happy to have that 
contribution. Some of it may be coming in the form of demining 
expertise; and, to the extent that that is helpful, then that 
will help the economy get under way.
    If you look at the farmers, for example--Chairman Young has 
been there and you have been there, but if you go out into the 
fields you will see farmers who are now planting crops.
    Mr. Lewis. We don't need to have pictures of kids with legs 
blown off to determine that we need a reprogramming.
    Secretary Cohen. I understand. But we are committed to 
helping make that as secure an environment as possible. To the 
extent that we can get others involved in that effort, we want 
to do so.
    Mr. Lewis. Mr. Chairman, I just would mention to you that 
it would be kind of fun to pursue with especially Secretary 
Cohen the other business of fire walls the other way. We used 
to put up fire walls to protect defense.
    Secretary Cohen. That is going to be an issue everyone will 
contend with next year.
    Mr. Lewis. Okay.
    Mr. Young. Mr. Hobson.

        FINANCIAL COMMITMENTS TO OVERSEAS CONTINGENCY OPERATIONS

    Mr. Hobson. Thank you, Mr. Chairman.
    Mr. Secretary, I have got a problem. You know, you have a 
$258 billion budget; and the taxpayers in my district say, gee, 
another $3 billion we are going to foot the bill for and there 
is nobody coming in here with any offsets? Or nobody wants to 
offset. Somehow, this is an emergency. It is hard for my 
taxpayers to look at that.
    The other thing is, when the previous administration went 
in and had an excursion into Iraq, they got some help in paying 
for this. One question is: Is anybody helping pay?
    And I see on here, Bosnia is point five billion. I don't 
know what the French budget is or what the German budget is for 
that, but I would like to know sometime for the record, and I 
would like to know if anybody else is helping out.
    [The information follows:]

    The following chart depicts current contributions to SFOR from all 
contributing nations:

----------------------------------------------------------------------------------------------------------------
                                                                  Percent
----------------------------------------------------------------------------------------------------------------
                                             MND (ND) (U.S. Sector)
----------------------------------------------------------------------------------------------------------------
Denmark...........................................      1,000        2.83  Mech Infantry Battalion in Nordic
                                                                            Brigade.
Estonia...........................................         41        .116  Infantry Platoon in Danish Battalion.
Finland...........................................        341        .968  Mech Battalion.
Iceland...........................................          6        .017  Security.
Latvia............................................         39        .110  Infantry Platoon in Danish Battalion.
Lithuania.........................................         40        .113  Infantry Platoon in Danish Battalion.
Norway............................................        615        1.74  Infantry Security Co.--SFOR HQ
                                                                            Battalion--Nordic Brigade.
Poland............................................        400        1.13  Mech Infantry Battalion in Nordic
                                                                            Brigade.
Russia............................................      1,400        3.97  Airborne Brigade.
Sweden............................................        480        1.36  Mech Infantry Battalion in Nordic
                                                                            Brigade.
Turkey............................................      1,520        4.31  Mech Infantry Brigade.
United States.....................................      8,500       24.13  1st Armor Division.
----------------------------------------------------------------------------------------------------------------
                                            MND (SE) (French Sector)
----------------------------------------------------------------------------------------------------------------
Egypt.............................................        270        .766  Mech Infantry Battalion in French
                                                                            Brigade.
France............................................      2,500        7.09  French-German Brigade.
Ireland...........................................        150        .141  MP Company--SFOR HQ.
Italy.............................................      1,790        5.08  Mech Infantry Brigade.
Jordan............................................         10        .028  Special Forces Contingent.
Morocco...........................................        650        1.84  Infantry Battalion in Spanish
                                                                            Brigade.
Portugal..........................................        320        .908  Airborne Battalion in Italian
                                                                            Brigade.
Spain.............................................      1,550        4.40  Mech Infantry Brigade.
Ukraine...........................................        380        1.07  Mech Infantry Battalion.
Germany...........................................      2,470        7.01  French-German Brigade.
----------------------------------------------------------------------------------------------------------------
                                              MND (NW) (UK Sector)
----------------------------------------------------------------------------------------------------------------
Bulgaria..........................................         30        .085  Engineering Construction Platoon,
                                                                            Attached to Netherlands Battalion.
Canada............................................      1,250        3.54  Mech Infantry Battalion.
Czech Republic....................................        640        1.81  Mech Infantry Battalion.
Malaysia..........................................        925        2.62  Mech Infantry Battalion.
Netherlands.......................................      1,080        3.06  Mech Infantry Battalion.
United Kingdom....................................      5,000       14.19  7th Armored Brigade.
----------------------------------------------------------------------------------------------------------------
                          Multinational Combat Support Elements--SFOR Logistics Command
----------------------------------------------------------------------------------------------------------------
Albania...........................................         40        .113  Attached to German Brigades below.
Austria...........................................        230        .653  Transportation Co. in Beluga
                                                                            Battalion.
Belgium...........................................         50        .141  Support Element.
Germany...........................................        850        2.41  Logistics, Medical, Transport Brigade
                                                                            Battalion, Engineering Battalion,
                                                                            Aviation Regiment (these numbers are
                                                                            reflected in the Germany totals
                                                                            above).
Greece............................................        210        .596  Transportation Co. in Beluga
                                                                            Battalion.
Hungary...........................................        255        .724  Engineering Battalion.
Luxembourg........................................         18        .051  Transportation Platoon in Greek Co.
Romania...........................................        200        .567  Engineering Battalion.
----------------------------------------------------------------------------------------------------------------
                            Commonwealth Nations Contributing to United Kingdom Total
----------------------------------------------------------------------------------------------------------------
Australia.........................................          5        .014  Part of Armored Brigade.
New Zealand.......................................          8        .022  Part of Armored Brigade.
South Africa......................................          3        .008  Part of Armored Brigade.
----------------------------------------------------------------------------------------------------------------
                                                      Other
----------------------------------------------------------------------------------------------------------------
Slovenia..........................................         50        .141  Security forces based in Slovenia.
----------------------------------------------------------------------------------------------------------------

    The final size of the follow-on force is being determined by the 
NATO force generation process that is on-going at this time. Different 
accounting systems and rules make it virtually impossible to accurately 
report other country expenditures in Bosnia. Additionally, most 
countries are reluctant to openly report their military expenditures.

    Mr. Hobson. Here we are, once again, going around the world 
being the peacekeeper and the taxpayer of this country paying 
the bill.
    Then, lastly, I would like to ask you, sir, have you seen 
Mr. Greenspan--you talked about Mr. Greenspan before. I sit on 
another Committee that has Mr. Greenspan come in every once in 
awhile, it is not the Banking Committee, and he made some--
normally, sometimes you have a little difficulty in following 
his discussion, because he goes around and around; but he was 
rather blunt with the Budget Committee about what he thought, 
at least at that point, unless you all have gone back to talk 
to him and gotten some different information, about what he 
thought about doing a supplemental without offsets would do to 
the markets of this country, the financial markets in this 
country.
    And I am very concerned about that. I don't know whether 
the administration has discussed that before they get into the 
emergency of this supplemental or not, but I will tell you, I 
have great difficulty. I want to support the military. I think 
we are going to be in Bosnia a long time. I did not want to go 
there. I think we are stuck there. We are going to have a hard 
time getting out.
    I have been there twice, and it is not going to be easy to 
get out of there. You probably won't get out until there is a 
change of administrations and it becomes a situation where it 
is a political thing; and, even then, I don't know whether you 
can really get out.
    Because, as he said, I have been in a room where those 
people don't like each other; and I don't think they are going 
to like each other 5 years from now any better than they like 
each other now, as we go along. We will have some peace in the 
meantime, and we will save some people at the cost to the 
American taxpayer. And nobody in Europe supporting our payments 
over there, nobody, as far as I can tell, helping us.
    You know, yeah, we may get a little smaller reduction in 
the gasoline prices, but so are the Japanese and a lot of other 
people.
    But who is footing the bill again? The American taxpayer 
once again. And if we do this without offsets, we are back 
playing the old game that we have been playing for 40 years 
that I thought we had gotten away from or I hoped we had gotten 
away from.
    You can respond to my outrage if you want or my concerns. I 
hope it is not outrage. I hope it is reasoned concern.
    Secretary Cohen. You began on a good note when you said you 
had a problem, and I would like to try to address that.
    First of all, the other members of this Committee, at least 
I detect from their line of inquiry that they are concerned 
that we are not spending enough on defense and so when you say 
to your taxpayers $258 billion, if you look at that as a 
percentage of our Gross Domestic Product, GDP, we are down to 
one of the lowest levels that we have ever been since World War 
II. So that is not an extraordinary amount of money to be 
allocating for the defense of this country, given the fact that 
we do have global interests.
    I am frequently asked are we the world's policeman? My 
answer has been, no, we are not the world's policeman. We just 
don't want to become a prisoner of world events. Richard Haas 
of Brookings has phrased it somewhat differently. He refers to 
us perhaps as the reluctant sheriff.
    We are not over in the Gulf because we are doing the Gulf 
states a big favor. We are over there to protect our interests.
    We have an interest in making sure that Saddam Hussein 
doesn't stand astride of the oil wells of that region. If you 
think we have a problem in our economy, which I don't think we 
have right now, imagine what that will do to oil prices and to 
its availability and to its instability in the region, what 
that would do to the world economy, including right here at 
home.
    So when constituents--and having represented them for 24 
years in Congress, I understand. But you will also have to 
explain to them the consequences of not acting, that we are not 
there doing a favor for the Gulf states or anybody else. We are 
over there to protect our interests. To the extent that we can 
get contributions, yes, the Saudis and the Kuwaitis, between 
them I think they have come up with between $400 million and 
$500 million that are supporting on our day to day--our year-
to-year efforts over there. Could we do more? We would like to 
do more. The Chairman of the Joint Chiefs is coming back, 
having visited the Saudis and Kuwait. He sent me a note just 
yesterday indicating that they are making some rather 
significant contributions to force protection, to other things 
that are important to us, but recognizing it is in our interest 
to be there.
    You mentioned Bosnia. We have got the NATO countries 
involved and they are carrying their share as well. You 
mentioned Germany. How many here on this committee would have 
thought 5 years ago that German troops would be in Bosnia, not 
to mention Russian troops but German troops? I recall 
addressing the Werkunde conference that I attend every year and 
I was chastising the Germans because at that time the Germans 
said our position is we cannot go to any area that we occupied 
during World War II, which took care a large part--much of 
Europe at that point. And my comment was, you cannot hide from 
history but you can't hide behind it, either. And we had the 
support then of Volker Ruehe, the Minister of Defense, and they 
were appealing an issue to the Supreme Court to get a ruling 
and the Court finally ruled that, yes, they could have German 
personnel aboard our AWACS in Bosnia.
    We have come a long way since that time. They have now got 
3,000 troops.
    Mr. Hobson. Is there any money?
    Secretary Cohen. They are paying for their troops to be in 
Bosnia. They have 3,000 there and that is a pretty significant 
contribution. And as we are coming down in our numbers they are 
going to hold to where they are. That is another commitment 
that they have made.

                           REFUGEES IN BOSNIA

    Mr. Murtha. What about the refugees?
    Mr. Dicks. What about the refugees? There are 2 million 
refugees, aren't there?
    Secretary Cohen. Well, in addition to their absorption of 
all the refugees, they are very concerned about that and they 
would like to see a resettlement of those refugees. They have 
also been helpful in putting together this special unit so that 
we can get some trained personnel who can serve as a buffer so 
we don't get our SFOR forces into the kind of day-to-day 
conflicts that could arise. So they are making contributions in 
many ways. So we are not there alone. I think that needs to be 
pointed out.
    Peacekeeper of the world, we are not out to be the 
peacekeeper of the world. Albania had a very serious situation 
this past year. They had to deal with it pretty much on their 
own. The Italians were involved and others, but we didn't go 
rushing in. We have to be very selective of where we go. But if 
you look at the potentiality, if you start measuring this in 
terms of costs, let's suppose we weren't in Bosnia right now, 
let's suppose that the hatred that has been there for so many 
centuries were to erupt and spread like a burning fuse going 
down through Macedonia, into Kosovo, into Albania, into Greece 
and Turkey. What do you think the costs would be for the United 
States at that point if you measure where we are today against 
that potentiality?
    It might happen in any event. We are hoping that it won't.
    Mr. Hobson. I was going to say it might happen anyway.
    Secretary Cohen. It might. But we have done something to 
forestall that, at least for the time being, and perhaps we 
will be successful in preventing it from spreading. But if you 
allow it to spread and then you say, we have got another 
potential involvement in the European theater, we have had 
twice in the 20th century, the costs involved would dwarf 
anything we are talking about here in this emergency 
supplemental or indeed what we are spending for all of Bosnia 
in that region.
    So I think we have to have that as part of the equation as 
we look in terms of why are we spending so much? If you look at 
the defense budget, in terms of percentage of our GDP, it is 
not that high. It probably should be higher unless we are 
willing to do, what? That is to cut back on the level of 
commitment that we have got in the world.
    Now, where do you want to go? Would you like to pull our 
troops out of Korea? Most people would say, let's don't take 
that chance at a time when the North Koreans are at the 
bargaining table now, at least we have got them to talk. Would 
you like to pull out of Southwest Asia and leave it to Saddam 
Hussein and the Iranians to determine what the future of that 
region should be?
    Should we simply pull back from our forces in the Asia 
Pacific region? We could do that, but that certainly would not 
lend to stability in that region. You might find it being 
filled by other countries who don't have our interests at 
heart. So as you start to look around the globe, we could 
forget about the drug effort, the antidrug effort in this 
country and say, forget about the AWACS, we don't need it 
anymore. Just let the drugs keep coming in. You could do all of 
that and say let's just isolate or insulate ourselves in the 
continental United States.
    I don't think that is a wise decision to make. Some make it 
but that would not be my argument.
    So we have a burden to bear and as a result of bearing it 
to date, we have prosperity, which is unimagined, I think, in 
most of the world. We have still security. We have liberty. So 
we are in relatively good shape, notwithstanding all of the 
challenges we face from the drugs, from chemical and biological 
potential attacks in the future. All of those are out there but 
we have done rather well, given the fact that we have made this 
kind of commitment to be a global power.

                     IMPACT OF SUPPLEMENTAL OFFSETS

    Mr. Hobson. What about Greenspan?
    Secretary Cohen. About Greenspan?
    Mr. Hobson. What about his comments before the Budget 
Committee?
    Secretary Cohen. I haven't seen his comments.
    Mr. Hobson. Has anybody down at the White House seen it?
    Secretary Cohen. I am sure they talk to him on a regular 
basis. I don't happen to be talking to him on a regular basis, 
but the fact is, I am not aware that this amount of money would 
suddenly cause instability in the marketplace to the point that 
it would jeopardize our prosperity.
    Mr. Hobson. Well, I think there is a difference--at least 
if I understood what he said on the Budget Committee, you have 
a difference of opinion with him. I also think we could find 
offsets, maybe not necessarily in the military but I think 
there is plenty of places to find offsets, and I think it sends 
a wrong signal to this country not to even try for the offsets, 
because I think we have convinced this country that we are 
going to be fiscally responsible as we administer this country. 
The President has said that. Everybody has said that. And to 
start down this road, things become Christmas trees. They 
become easy. And it just seems to me the wrong place to start 
off, to start off without even attempting anywhere to find 
offsets. It is not what I think is--and I will stop here, Mr. 
Chairman--in good fiscal responsibility to the citizens of this 
country, and especially when Chairman Greenspan came before the 
Budget Committee with such a straightforward statement on this 
matter. Unless that is addressed I have got a hard time voting 
for this in the manner in which it is being presented.
    I just wanted to share that with you. I think you are doing 
a good job.
    Secretary Cohen. We can get offsets in the Defense 
Department. We have made that clear. But I am not sure it is 
the kind of thing that anybody would want to support. Namely, 
we could take it out of personnel. We could take it out of our 
readiness. We could take it out of depot maintenance. We could 
take it out of delaying some procurement. We could do that. I 
think it would have a major impact.
    Mr. Hobson. I don't think it should be totally out of the 
Defense Department. I am not arguing that, but I am just saying 
to say we can't find offsets and we are going to walk away and 
go back to the old way and just at the very time when we have 
got the glimmer--and the public doesn't even believe it yet, 
under the way we cook the books, that we have now got a 
balanced budget. To go out and do this seems irresponsible to 
me, that is the position that I have taken and you guys have a 
different position.
    Secretary Cohen. If you can persuade your colleagues to 
take it out of domestic funding and put it into defense, I 
think that that would be admirable, if you think that is a 
possibility.
    I haven't heard many on the Hill or elsewhere advocating 
that we do that. But if that is a political reality that you 
can achieve, you can talk about it but can you achieve it, 
then, fine. We are faced now with a situation where in 30 days 
we have got to start now cutting back on various readiness 
aspects of our forces. We are starting to, cutting back on 
training, cutting back on depot maintenance. That is going to 
start in 30 days. But if you think there is a reasonable 
prospect of taking money out of nondefense programs and putting 
that over into these.
    Mr. Hobson. We are going to try.
    Mr. Young. Mr. Bonilla.

                         QUALITY OF LIFE ISSUES

    Mr. Bonilla. Thank you, Mr. Chairman.
    Secretary, as the Chairman mentioned in the beginning, we 
had an opportunity to visit Bosnia over the weekend and we are 
very proud of what our troops are doing there. I for one am 
going to try to do whatever I can to get the military every 
dollar it needs. But I do have a very fundamental question 
about the policy that we have with peacekeeping missions around 
the world. I sat at lunch time with some of the troops at Camp 
McGovern, and a fellow sat to my left from Tyler, Texas who 
told me that because of the number of months he has been 
deployed over the last couple of years his wife is now going to 
leave him and, frankly, I got a little choked up about that 
because this person was doing all he could to serve his country 
and our country is not concerned enough about his deployment 
rate to do anything about it. But he is one example of many 
people serving in our armed forces in this day and age. The 
fellow across the table talked about the fact that they now 
qualify for food stamps and welfare, and that also troubled me 
greatly. And I noticed you mentioned the prosperity that we are 
now seeing that is being enjoyed once again in Bosnia and that 
is fine, but the prosperity is not being enjoyed in the homes 
of many of the people that are serving in our armed forces now.
    I also have military retirees from World War II and Vietnam 
who cannot get in to see a doctor anymore at the military 
hospitals. When they finally get in after waiting 6 weeks or 6 
months, they wait 6 hours or longer just to get in the door.
    We have got people now that are suffering in terms of 
training because we don't have enough ammunition for them. We 
are cannibalizing airplanes. Yet--life is about making tough 
choices, and I am very disappointed, speaking not just as a 
Member of Congress but as a citizen of this country, the 
administration is saying no to troops that need pay raises, no 
to troops who need help who are being overdeployed, no to 
veterans who need health care, no to troops who need equipment 
and ammunition for training, and I mean in the meantime we are 
saying yes to deploying troops around the world to do social 
work. And when I see troops in Haiti a couple of years ago and 
now in Bosnia carrying ballots and worrying about elections, 
that is a wonderful thing to do when we have our pockets 
overflowing with money in every--throughout the land. But we 
are not facing that situation. And we have an administration 
now that is not worried about what our troops are going 
through, and yet--they are saying let's cut even deeper into 
the bone, but at the same time let's deploy you more. And I 
find that very troubling, and I wonder, Secretary, if at some 
point the person in the White House understands that the bottom 
is going to fall out and we are not going to be able to do any 
of these wonderful things around the world if we don't take 
care of our people that are serving in the armed forces and 
worry about what their future is all about. And I wonder if you 
have that concern about the bottom falling out at some point if 
we don't pay attention to these things?
    Secretary Cohen. Well, thank you very much for your 
comments. You are right, there are tough choices involved in 
all of this. With respect to pay raises, we have provided for 
the maximum allowable amount, as dictated by Congress, for pay 
raises for our troops. So the pay raises, in fact we have 
programmed in our budget the maximum allowable under 
congressional legislation.
    With respect to overdeployed, I agree with you. This is 
something that we are very concerned about, something that 
General Ralston has been deeply involved in trying to have a 
mechanism whereby we can track that individual who has been 
deployed there twice. I inquired recently, and perhaps General 
Ralston can comment on this, we had one individual who was 
deployed either his third or fourth time and we asked how this 
could take place? And he said well, I found out he had 
volunteered to do it. Now, that was an exception. And that is 
something we have to be really very concerned about, that we do 
not want to see either units--and even the Air Force gets down 
to much more micromanagement in terms of looking at individuals 
within the units, to be as sure possible that we are not 
overutilizing certain units of those individuals to the point 
where they do have a morale problem; namely, they have an 
unhappy spouse at home who decides that he or she would rather 
be divorced than to serve with that individual.
    So that is of concern.
    The equipment is of concern. That is why I added a billion 
dollars this year for spare parts and some of the engine 
replacement, because I have been concerned about that.
    With respect to social work, I think I have to be careful 
here because in Bosnia, by way of example, there we have the 
highest reenlistment rate in the military as a result of those 
who are serving in Bosnia. They feel really good about what 
they are doing. And that is where we found the highest 
reenlistment rate for those who have served there. They don't 
think it is social work. They think that they are making an 
enormous contribution to our interests and to the interests of 
those people that they are there helping to preserve the peace.
    I agree with you that we should not be engaged in certain 
efforts, in nation building and whatever. But I think that when 
we make a contribution that we can perhaps forestall the spread 
of a conflagration on a continent that we would be become 
involved with, that is more than social work. Certainly over in 
Southwest Asia, I don't think any of the troops over there 
would think we are involved in social work. And we are deployed 
over there for a very good reason as far as being involved in 
Kuwait and the other region. So I think it is tough choices. 
When we find the problems that you have identified, then we 
have got to correct them, and you are helpful to us as we can 
be informative to you.
    When you find on your fact-finding missions and you get 
evidence that there is dissatisfaction and you find that there 
is more than simply anecdotal evidence, you bring it to our 
attention, we try to respond to it. And that is why I think--I 
see it as a joint enterprise. I can't come before you and say, 
there are no problems. There are problems. But many times, you 
are closer to it as a result of your own constituency and as a 
result of your own travels, that you bring things to our 
attention that don't bubble up certainly to my level. And that 
is one of the reasons why General Ralston has been very 
involved in this whole JROC process.
    How do we get a better understanding of exactly the nature 
of the problems that we are confronted with?
    Mr. Bonilla. And these were not isolated instances. This is 
a problem that we have been hearing about in greater terms for 
some time now. I can assure you, Secretary, as well, I 
represent an area in south and west Texas and we are very proud 
of the 7 military installations I have either directly or 
indirectly in my district and a lot of the military retirees 
that are there as well. And there is absolutely no support for 
expenditures in these areas that I am describing at the expense 
of the important expenditures that I outlined earlier.
    So it is not something that I am just talking about. It is 
something, when you go out in the heartland, I bet you if you 
had another town meeting on whether or not we should stay in 
Bosnia or we should have in hindsight gone to Haiti, that you 
would get an earful about some of the things I just pointed 
out.

                BURDENSHARING IN CONTINGENCY OPERATIONS

    Mr. Hobson just asked a question, and I would like to 
elaborate on, about the involvement of other countries. I know 
our NATO friends are involved, but I wonder, is the 
administration working hard enough to try to get some of the--
help us more with some of the bills? If it is such a big deal, 
and there are many that feel that this is a civil war, not an 
aggression beyond the areas that we have been talking about, 
but if this is such a big deal and a threat to our national 
security or the national interests of the entire world, then we 
ought to also have countries even like Japan kicking in more 
dollars to help pay for this peacekeeping mission. It is not in 
our backyard. It is in the backyard of the Europeans and they 
should first and foremost, after we get things settled down and 
established in Bosnia, they should be willing to take over the 
brunt of the work, and perhaps we should only be there as 
advisors but not have as many troops deployed as we do.
    Secretary Cohen. That, of course, is the goal that we all 
want to achieve, is the gradual winnowing down, or winnowing 
out of our force levels there and turning that responsibility 
over. That is one of the reasons why we have got this new force 
in between the SFOR forces and the local police. That is one of 
the reasons why.
    But the other countries, for example, they are as eager to 
see a return of their servicemen and women to their own 
countries as well. They have thus far decided that they would 
keep the same level, even as we are coming down. The Germans, 
for example, volunteered this. The defense minister said, we 
will keep ours at the same level, even as you come down. The 
British have their own financial problems. They all do.
    But they see it as being important that what has been 
gained not simply be lost. There has been a lot invested and, 
again, it could go wrong in the near future. No one can predict 
that. But I think the chances of us making this safer, more 
stable are greater with our presence as we build up those 
institutions that become self-sustaining.
    Mr. Bonilla. Is the President aggressively working the 
phones to try to increase the European presence--there in order 
so that we can get out quicker, or help--getting more help for 
us to pay the bills, as President Bush did during the Iraqi 
situation? Is he aggressively working to get us help in those 
areas?
    Secretary Cohen. Well, he has been on the phone and meeting 
with all of the European allies as far as Bosnia is concerned, 
I have been, Secretary Albright has been, to get a greater 
European participation in that.
    With respect to the funding in the Gulf, I appeared before 
the Senate Appropriations Committee last week and Senator 
Stevens advised me that he is taking the entire membership over 
to the Gulf in the next couple of weeks to see if he can't get 
support for increased funding in terms of contribution.
    Mr. Bonilla. Do I have time remaining, Chairman?
    Mr. Young. You have a small amount of time left, Mr. 
Bonilla. You are recognized.
    Mr. Bonilla. Thank you, Chairman.
    I do have a couple of other questions, Mr. Secretary. I 
would appreciate it. I am not trying to overburden you with 
trying to dig up information, but I have some questions that I 
would like to submit for the record regarding some of the long-
term projected costs for what we are doing in Bosnia and other 
peacekeeping missions and how that affects wear and tear costs 
and equipment and so forth. It is only three or four questions, 
but I would appreciate it if you would get back to me on that.
    Secretary Cohen. All right.

                                 KOSOVO

    Mr. Bonilla. And I just have one final question, because 
earlier you said, in relation to Kosovo, that we can't 
anticipate what's going to happen. Back in December of 1992, 
the New York Times printed an article that quoted a senior aide 
to then President Elect Clinton stating that Clinton is, quote, 
seriously concerned about the risk of wider conflict if the 
Serbs act against Kosovo. He understands that is something that 
he will have to deal with when he becomes President.
    So 5 years have passed since that statement was made and we 
still don't have a clear policy toward the Serb assault on 
Kosovo. So I hope that at some the President can think about 
what needs to be done there definitively, because clearly he 
has had at least 5 years to think about it, according to one of 
his senior aides. But then, as you said earlier, we can't 
anticipate what's going to happen in Kosovo.
    Are we back to square one or is he giving any serious 
thought to a definitive plan?
    Secretary Cohen. Well, we have had 5 years in which the 
Serbs have not taken the kind of action we have seen in recent 
days. But the fact remains that we constantly have to deal with 
Milosevic and to remind him that we have just started to see an 
easing of sanctions based upon the performance that has taken 
place in the Republic of Srpska, that they have now started to 
moderate their position there with a new moderate leader, 
Leader Dodik. And so as a result, some of the sanctions were 
just on the verge of being lifted and now Secretary Albright 
has reminded Milosevic that these sanctions are quite likely to 
be put back into place and this will take U.N. action and other 
types of activity. But very hard to have a clear-cut policy of 
when, in fact, you can't say for sure what will you take--will 
you take military action at this point? Would you commit U.S. 
troops? Would you commit NATO troops? Would you engage in 
attacks within Serbia itself or Yugoslavia, the former Republic 
of Yugoslavia? All of these issues, you know, depend upon the 
scenario itself. So it is something that we wouldn't want to 
make a declaration without consulting with Congress on these 
matters. What it would involve? What would be the costs?
    I think that the administration has made it very clear that 
Milosevic should not use the military, should not be using his 
military to funnel either weapons or money or assistance 
through the Serb police, the so-called MAW, that they would 
crack down in this fashion.
    We also don't want to encourage the people in Kosovo to be 
engaged in stoking up the rebellion as such or the 
confrontation that we have seen take place. That could spread 
quickly and overwhelm the countries in that region. It is a 
difficult issue. I don't think that anyone has a clear-cut 
answer.
    Mr. Bonilla. I know a lot of these things developed before 
you got there, Mr. Secretary. You are a very important player 
in this. But a lot of the questions that we have about 
definitive policy are directed at the administration, that I 
feel clearly has not had a definitive policy in many of these 
areas before. Thank you for your time.
    Mr. Young. Mr. Nethercutt.

                      POLICY OBJECTIVES IN BOSNIA

    Mr. Nethercutt. Thank you, Mr. Chairman. Welcome, Mr. 
Secretary and General, Mr. Under Secretary. I want to follow up 
with you gentlemen very respectfully on what my colleague, Mr. 
Bonilla, and others have said.
    I was one of the members of the delegation that went over 
this weekend also, and I think back to when I first came on 
this Committee in 1995, when Secretary Perry came here and 
declared in no uncertain terms that this was a 1-year 
operation, that we would be out in a year, and that it would 
cost $1.5 billion. He said that: ``we must not be drawn into a 
posture of indefinite presence in Bosnia.'' It was not long 
before we had further requests for more money.
    Now we are up to roughly $6.5 billion. Two-and-a-half years 
later, here we are now with another $487 million plus another 
$1.9 billion for next year. President Clinton in his 
certification to Congress notes that, ``While I do not propose 
a fixed end date for this presence, it is by no means open-
ended.''
    That is one of the great problems I think this Congress has 
with getting any clear declaration of any certainty or any 
intelligible policy out of the President. I say that very 
respectfully, for I have no quarrel whatsoever with our people 
on the ground, our military men and women in Tuzla and in the 
whole region. They are top rate. General Ellis was wonderful. 
And I have the greatest confidence. So my quarrel is not with 
anybody in the military. But my quarrel is with this sort of 
situational determination of policy.
    Mr. Secretary, I heard you say a little while ago in terms 
of formulating this supplemental that it was delayed with 
regard to the $1.9 billion, because you didn't think we would 
be there past June. I look back to the President's tying U.S. 
withdrawal to reaching complete and achievable benchmarks. I 
find it hard to imagine that your offices would not have a 
pretty good sense of whether we would be there past June, in 
order to submit to this Congress this supplemental request.
    I have heard you say, sir, with regard to the declaration 
of policy, ``I am not sure what we will do in this region of 
the world.'' I understand it is difficult. I am troubled by it 
myself in trying to figure out how to face this challenge. But 
my sense is that our country has an obligation to have a clear 
policy, to let the world know what our clear policy is, whether 
it is southwest Asia or whether it is Bosnia, and then conform 
world events perhaps to our policy, and drive policy, not react 
to policy. And I fear that we are in a situational policy 
position where we are reacting.
    There is clearly a better condition in Bosnia today than 
there was 6 months ago. And I think looking back to the words 
of Secretary Perry and Mr. Clinton and others who were trying 
to tell the country what to expect relative to Bosnia, that 
they have been way off the mark. So how much farther do we go 
with regard to policy establishment and benchmarks and 
guidelines?
    Ambassador Galbraith briefed us before we went to Bosnia 
and he laid out a list of requirements for an exit strategy 
that I am sure was drawn by an attorney downtown who wants a 
Utopia with regard to policy in Bosnia. We are never going to 
get there in my lifetime, in my humble opinion, if we establish 
those kinds of benchmarks.
    So I am one of the people who is frustrated by this. I am 
going to support this military, and I would not ever pull out 
money from people on the ground. But I must say, to hear the 
President say, ``I don't propose a fixed end date for this 
presence, but it is by no means open-ended,'' there is a 
disconnection there. And that is dishonest in terms of dealing 
with this Congress and I think with the country.
    I think the guy in my district wants to have a clear policy 
about why we are there and why we are going to stay there, and 
how are we going to afford it. So forgive me, but I am serious 
about this. And I really feel as though in your efforts as 
Secretary of Defense and the Chairman of the Joint Chiefs and 
the hierarchy of the Defense Department, I think it is 
incumbent upon you to perhaps sit down with the President and 
say this is going to come and get us one of these days, this 
lack of any clarity with regard to policy.
    And so I appreciate having your response because I see it 
as a great problem. And I also want to have you respond, if you 
could, please, to what if there is no supplemental and we say, 
please come home? How much would it cost to move us out and 
what planning has there been done for that? You should have 
this information assuming that, Mr. Secretary, you are accurate 
in saying that you were expecting that we would be out by June 
of this year.
    Secretary Cohen. Thank you very much. And I appreciate the 
sentiment that you have expressed in terms of your concern. 
With respect to the policy, Dayton is still the policy. That 
has been the articulated policy of the administration. It has 
not changed. I think it is pretty clear-cut in terms of what 
the objectives were.
    Some of those objectives I think you can see taking place. 
They are not going to be full-blown and they are not likely to 
be in the immediate future. But I was a great doubter, too. I 
must tell you a couple of years ago I was sitting on that side 
over there, and I had the same questions then that you are 
raising now: What are we getting into for how long; how much is 
it going to cost?
    So I also didn't insist upon it but those are the 
representations that were made, it would take 1 year. In fact, 
the military obligation was fulfilled in that 1 year. The other 
aspects of it, the civilian implementation, were not. So the 
question then became should you continue the military presence 
to allow the implementation on the civilian side that was 
really envisioned and encapsulated in Dayton itself. Should 
there be, for example, a judiciary that is independent? 
Hopefully we are on our way to seeing a judiciary created. 
Should there be competent professional police as opposed to a 
bunch of thugs who were hired out by their local ethnic 
majority at that time? Should there be free elections? Should 
there be radio and television broadcasts which are relatively 
independent? We are seeing the seeds of all of those start to 
take and bear fruit at this point. It is still going to be some 
time.
    Now, when the President says, ``I can't give you a definite 
time but it is not open-ended,'' the reason he can say that is 
that no one can give you a precise time. If we learned anything 
from this past experience by giving a date of 1 year, 18 
months, we found, well, it doesn't work out that way. But it 
cannot be open-ended, because of you. Each year the President 
has got to come back to you, the Congress, and say, ``I am 
requesting funding for this engagement.''
    And so there are benchmarks. You are going to hold us, 
saying, ``Wait a minute, you have these benchmarks. How are you 
doing?'' Every 6 months they have to be reviewed. The Europeans 
are anxious to reduce the sizes of their forces as well. So 
there is going to be external pressure. The policy remains the 
same and the goals remain the same and hopefully we are trying 
to accelerate that.
    I know there was a question here, Congressman Murtha has 
been very concerned about that issue from the very beginning. I 
would not have guessed last year that 10 Croatians would 
surrender voluntarily. I would not have guessed a month ago 
that we would see three Serbs come in voluntarily. So things 
are starting to happen to achieve the goals of Dayton.
    I think the President is trying to really address the 
issue. I cannot give you a definite time frame. And if I did, 
you would say I would be misleading you if I didn't measure up 
to it. So he is saying, I cannot give a definite time, but 
obviously it is not going to be open-ended. There is never 
going to be a time when we can come out. A lot of that depends 
upon working with our allies and working with you because you 
ultimately will decide.
    And you asked the question: What happens if we don't give 
you the money? Our choice would be the President saying that he 
is recommending that we stay beyond June of 1998. Then the 
military, the Defense Department, will look at this, unless you 
direct otherwise, and say here is how we have to pay for this. 
And so we will start cutting back on all the things that have 
been talked about here today.
    If Congress were to direct that the troops come home, you 
would do so, I assume, by simply cutting off any future funding 
for the soldiers and others who are serving there. I am not 
sure Congress would do that, but if you did, I will give you an 
exact cost of what it would take to lift all of our forces out 
of there, to close down the operations and come home.
    But before doing so, again I would like to come back to the 
point I made earlier. When you are measuring the costs, measure 
the costs of if we do this at this point, given what has taken 
place in Kosovo, given the instability that could spread very 
quickly, what will the costs be if we ever have to be called 
upon to intervene on a large scale in Europe because of the 
flame that has spread throughout that region. We have had some 
pretty nasty experiences in two world wars, and I think that 
the costs would overwhelm us compared to where we are today.
    So it is tough in this kind of a balancing but I think we 
have made a wise investment to date. And I don't want to see it 
go on any longer than necessary. And I know that there are 
readiness issues that are constantly being raised that we have 
to address, and it may be necessary in future years to say are 
we prepared to support additional funding to keep these 
commitments. Or would you and other Members say cut back the 
commitments? No more peacekeeping. Do not go to Africa. Don't 
go to Haiti. Don't go to any of these other regions beyond 
where we are today.
    I cannot predict to you what the sentiment would be if you 
saw massive destruction of populations in Africa today.
    Mr. Nethercutt. We have already seen it. The Tutsis and the 
Hutus; Rwanda?
    Secretary Cohen. But in addition, if you had humanitarian 
requests, what would this Committee say? Would you say no, we 
are not going to provide even humanitarian types of relief on a 
temporary basis? We have to face what would take place in other 
regions throughout the greater European, Central Europe and the 
Caucasus. What happens if--would we say under no circumstances 
we are not going to provide anything?
    I cannot predict what you would say, but I know this: that 
we cannot carry out policies without working closely with 
Congress as a partner on this. We don't make decisions 
unilaterally and without your support because you have the 
power of the purse.
    Mr. Nethercutt. I realize that. I will just close by saying 
we have just talked about Bosnia and a policy there. I hear 
what your declarations are relative to our national interests 
in the Middle East and southwest Asia and our dealings with 
Iraq. We haven't even begun perhaps to see a cost associated 
with that one if it deteriorates. And so my sense is we cannot 
do it all, and that is why I am just advisedly agreeing with my 
other colleagues with regard to insisting on more assistance 
from places like Kuwait and Saudi Arabia. I understand they are 
charging us for water for our troops. It is in their interest 
that we are there to provide some stability. So forgive me, I 
appreciate your work, but I really think we have to have a 
clearer declaration of policy and then we can agree with it or 
not.
    Secretary Cohen. Thank you.
    Mr. Young. Mr. Visclosky.
    Mr. Visclosky. Thank you, Mr. Chairman. Mr. Lynn, in 
follow-up to Mr. Murtha's line of questioning earlier, do you 
think that Dr. Hamre walked off with the contents of your safe?
    Mr. Lynn. No, not to my knowledge but I will check his 
office when I get back.

                            MINES IN BOSNIA

    Mr. Visclosky. Mr. Secretary, are there still people in 
Bosnia laying mines?
    Secretary Cohen. We would have to say that not to our 
collective knowledge anyone is laying mines. I have not been 
apprised of that. General Ralston has just indicated he does 
not have any knowledge of that. No.
    Mr. Visclosky. So your answer would be no? Okay.
    I also understand that Macedonia has been touched on so I 
would not want to follow that line of questioning, although I 
would want to indicate I am very concerned about the situation 
there.

                                 KOSOVO

    The question I would have about Kosovo is: Is there a 
possibility of strategic thinking that since there is a 
reassessment going on in this country about our continued 
presence in Bosnia, that the violence is very deliberate to 
potentially muddy this debate and to send a signal that maybe 
the situation is never going to be resolved in that part of the 
area and we should simply withdraw?
    Secretary Cohen. From Bosnia? Well, to my knowledge, there 
has been no such consideration of a complete removal of 
American influence in that region or presence in the immediate 
future. I think it is the goal of the administration to----
    Mr. Visclosky. No, no, I am not saying about the 
administration; but would there be strategic thinking by others 
in the area to force our withdrawal; force a change in our 
policy to muddy the waters by having violence occur in the 
Kosovo region? I just find it coincidental that that occurs at 
the very time that we are reconsidering our continued presence 
in the area.
    Secretary Cohen. Well, you could probably speculate that it 
would be in the interest of Milosevic to start cracking down on 
the Kosovoans in order to stimulate a riotous reaction so he 
could again crack down further so that that would cause us to 
recalculate. Anything is possible. But I would suspect that 
Milosevic himself is now just starting to see some relief from 
the kind of sanctions that have been imposed upon his country 
and some benefit coming to him that it would seem inconsistent 
and counterintuitive for him to do that at this time, 
especially since it may result in imposition of greater 
sanctions on his economy when it can least afford to 
accommodate them. But we are walking in a wilderness of mirrors 
when you start calculating what is in the minds of Milosevic or 
any of the other people who are over there.

                 CARRIER DEPLOYMENTS IN THE GULF REGION

    Mr. Visclosky. Mr. Secretary, with the exception of Kuwait, 
our allies are not willing for the U.S. to use their bases if 
strikes should take place. Is that going to necessitate a two-
carrier task force in the Gulf?
    Secretary Cohen. We are going to have a two-carrier task 
force for the immediate future at least. What we have requested 
is funding to carry us through to the end of this fiscal year 
to maintain the level of force that we currently have.
    I would expect to see a readjustment of that force level as 
soon as we become satisfied that we are going to get full 
compliance by Saddam Hussein. But we cannot predict that right 
now. Again, his track record hasn't been very good. It has been 
very bad as a matter of fact. And I laid this out before about 
the lies and the deceit and the dishonesty as far as their 
performance is concerned. But now we have this memorandum of 
understanding and we see at least initially that he is 
complying with it. We will have to wait and see how long that 
lasts. But I don't anticipate a long-term strategy of keeping 
two carriers in the Gulf.
    Mr. Visclosky. Mr. Secretary, thank you.
    Mr. Young. Mr. Istook.

              BUDGET OFFSETS FOR THE SUPPLEMENTAL REQUEST

    Mr. Istook. Thank you, Mr. Chairman. I would like to see if 
I can get into an area that hasn't really been sufficiently 
covered, and see if we can get some information rather than 
just exchanges of speeches.
    My first question is regarding the supplemental 
appropriation request for the military. Is the administration 
ready to accept offsets in domestic spending so that we can 
provide these funds for the Defense Department without having 
to undo all the hard work that has been done toward balancing 
the budget? You mentioned, of course, whether Congress would 
approve that. My question is: Is the administration ready to 
accept domestic offsets for this supplemental?
    Secretary Cohen. I cannot give you an answer based upon my 
own knowledge, but I would assume, since the President has 
submitted a request for nonoffset supplemental, that they would 
not be either eager or willing to accept that.
    Mr. Istook. Then I have to question how effective you have 
been in selling priorities to the White House, if you are 
telling us this is of such importance, and I am not diminishing 
the importance of it, but the President of the United States 
does not deem this sufficiently important that you cannot find 
other places in a $1.5 trillion-plus Federal budget to offset 
this so that we can achieve what everybody has been saying 
about balancing the budget. Haven't you had that conversation 
with the President on this?
    Secretary Cohen. With all due respect, my obligation is to 
serve as Secretary of Defense to identify areas of our budget. 
Can we accept offsets? I told you earlier in my testimony the 
answer is yes. Are you willing to accept a cut in readiness? 
Are you willing to have the depot maintenance start to stack 
up? Are you willing to have real property maintenance start to 
go in delay and disrepair? We could do all of that, but I don't 
think it is in our country's national security interest to do 
that.
    Mr. Istook. That wasn't my question.
    Secretary Cohen. You are asking me to make a recommendation 
to the President where to get savings in other parts of the 
budget.
    Mr. Istook. I asked you if you had that conversation with 
the President. Is this not of sufficient importance that you 
have had the conversation with the President and said, to avoid 
the cutbacks in the military which you just described, to 
assure that that does not happen, Mr. President, we need to 
know what you are willing to make the offsets in domestic 
spending wherever necessary. Are you telling me that you have 
not even had that conversation with the President?
    Secretary Cohen. I have not had such a conversation with 
the President. My conversations with the administration have 
been how do I deal with these requirements under these 
circumstances.
    Mr. Istook. Well, then I would have to suggest, Mr. 
Secretary, that you haven't done your job the way it needs to 
be done. Just as Mr. Nethercutt properly so questioned; what 
kind of contingency planning has been conducted at the 
Pentagon, if at the end of last year you were not looking at 
the possibility of having Bosnian operations extended beyond 
June of 1998, and from where the funds would come. There was no 
plan even put together other than to say the only way that the 
military can be assisted is if we make it an afterthought; 
something that is put on top of all the other spending, rather 
than saying the military and these operations which you 
describe have sufficient priority that we had to put them in 
our base rather than something that is added on later.
    I think there is a great disconnect between the priorities 
which you are expressing to this Committee and that you haven't 
even seen fit to talk to the President to say, Mr. President, 
are you willing to accept offsets in domestic spending as may 
be necessary to make sure that we don't have these problems 
surface with our men and women of the Armed Forces?
    Secretary Cohen. As a matter of fact, there is an allowance 
in the fiscal 1999 budget of $3.2 billion, that we have talked 
about several times this afternoon, for Bosnia and southwest 
Asia.
    Mr. Istook. That is next fiscal year.
    Secretary Cohen. We were concerned about having some 
contingency, because we couldn't plan on it specifically. That 
is why we are up here saying that for fiscal 1999 there needs 
to be a budget amendment that would take that into account. So 
it has not gone without some recognition on our part that there 
are some contingencies likely to be necessary for both Bosnia 
and southwest Asia.
    Mr. Istook. But you did testify earlier that you could not 
incorporate into your planning the possibility that during 
fiscal year 1998, after June 30 of 1998, there would be 
continued operations in Bosnia. You testified earlier that you 
couldn't be planning on that. Now you are talking about 
something that is fiscal year 1999, and it is just not the same 
thing.
    I must tell you, Mr. Secretary, I question whether the 
Administration is talking out of both sides of its mouth, when 
on the one hand it stresses the importance of this to the 
military and to our Defense commitments. On the other hand it 
doesn't even discuss where it fits in the overall set of 
priorities which is assessing the needs of the military within 
the normal budget framework, which could mean offsets against 
other domestic spending programs.
    Secretary Cohen. I believe the Office of Management and 
Budget and the President, the Vice President, all in the 
administration are fully aware of what the implications would 
be if we had to take this out of offsets in the Defense budget.
    Mr. Istook. But Mr. Secretary, you are avoiding the issue 
again. You keep saying, well, the only alternative is offsets 
in the Defense budget. You are avoiding the issue that there is 
an alternative of offsets in the much larger set of numbers 
which constitute the domestic spending budget.
    Secretary Cohen. If I recall, there is a firewall that has 
been established by Congress as well.
    Mr. Istook. Which can be changed.
    Secretary Cohen. By Congress.
    Mr. Istook. The Congress and the President together can 
change that.
    Secretary Cohen. I believe that Congress set the firewalls 
for this fiscal year.
    Mr. Murtha. It takes 60 days to change it and otherwise it 
would be sequestered, so it cannot be done.
    Mr. Istook. This is part of the arrangement with the budget 
that the President desired as part of the negotiations of the 
budget deal last year.
    Secretary Cohen. But that is something that----
    Mr. Istook. Mr. Secretary, you are not being fair if you 
try to say, well, Congress has set firewalls, as though Mr. 
Clinton doesn't have his own priorities between domestic 
spending and military spending.
    Secretary Cohen. It is something that I believe that 
Congress agreed to as part of the negotiations of the balanced 
budget.
    Mr. Istook. It was part of the President's budget as well 
as Congress.
    Secretary Cohen. Well, I tried to indicate it is a coequal 
responsibility here. We don't act as something one against the 
other. This is something that you have to achieve through 
negotiation with the House and the Senate and the 
administration. That was done. There were firewalls that were 
set up. I don't know how we could change that.
    You indicated a moment ago that you don't believe the 
administration would even be open to the discussion of changing 
those firewalls in domestic spending. That was my point. Thank 
you, Mr. Chairman.
    Mr. Young. We look forward to seeing you later in the 
month, Mr. Secretary. And we will be starting our markup on the 
supplemental tomorrow afternoon. We will do the best we can to 
do what is right. The Committee is adjourned.
    [Clerk's note.--Questions submitted by Mr. Young and the 
answers thereto follow:]

      Risks in Western Pacific Associated with Deployment of USS 
                            ``Independence''

    Question. Supporting the indefinite extension of the NATO mission 
in Bosnia combined with the increased deployment of U.S. forces to the 
Persian Gulf has stretched the ability of the U.S. to meet its security 
commitments elsewhere in the world. For example, the Air Forces has two 
Air Expeditionary Forces (two wing equivalents) deployed in the Persian 
Gulf. The movement of carrier battle groups in the Mediterranean and 
Pacific has caused the Air Force to carry an increasing burden in 
Bosnia and on the Korean Peninsula, respectively. In addition, the need 
to meet the increasing demand for U.S. forces will significantly 
increase the strain placed on U.S. military personnel. Have the risks 
associated with meeting U.S. security commitments in the Western 
Pacific increased because of redeployment of the carrier Independence 
to the Persian Gulf? If not, why?
    Answer. As long as the Independence battle group is deployed to the 
Arabian Gulf, ------.

       Bosnia and Southwest Asia--Supporting the Two MRC Scenario

    Question. Had redeployment of the carrier battle group from the 
Mediterranean to the Persian Gulf increased risks associated with U.S. 
support of the NATO mission in Bosnia?
    Answer. There was no increased risk associated with U.S. support of 
the NATO mission in Bosnia as a result of the deployment of the carrier 
battle group from the Mediterranean to the Persian Gulf.
    The primary mission of carrier battle groups deployed to the 
Mediterranean is not support of operations in Bosnia. During portions 
of their deployment to the Mediterranean carrier-based aircraft have 
flown missions in support of operations in Bosnia to augment land-based 
missions. The movement of the carrier battle group from the 
Mediterranean to the Gulf shifted the sourcing of those air missions 
from carrier-based aircraft back to land-based aircraft operating from 
Aviano and other land-based sites. Additionally, other aircraft are 
available within European Command, if requested through NATO and 
approved by National Command Authorities, to respond to increased 
requirements in Bosnia.

  Risks to Two MRC Scenario Due to Overextension of High Value Assets

    Question. What risks does the overextension of high value assets, 
such as JSTARS and AWACS, pose to our ability to meet the demands of a 
2 MRC scenario?
    Answer. The ability to meet the demands of a 2 MRC (now referred to 
as Major Theater of War, or MTW) scenario is definitely hindered by 
overextension of our high-demand low density assets. The risk is that 
those assets and their crews will not be able to conduct the ongoing 
training and maintenance required to ensure they are ready to meet the 
demands of a given contingency, and that is especially true for one or 
more MTWs. That is the purpose of the Global Military Force Program, 
which establishes the stead-state and surge Personnel Tempo and 
Operations Tempo constraints, based on Service requirements that allow 
us to weigh the risks and benefits associated with the deployment of 
these assets.
    In the present situation, ------.

       Bosnia and Southwest Asia--Supporting the Two MRC Scenario

    Question. What risks does the overextension of certain types of 
units such as military police and air combat control units pose to our 
ability to meet the demands of a 2 MRC scenario?
    Answer. The extended use of certain support units during peacetime 
contingency operations results in higher usage rates on equipment and 
increased tempo on personnel. Furthermore, strengthening the force in 
one part of the world, decreases our peacetime presence elsewhere. The 
impact on our Two Major Theater War capability, however, is manageable 
as long as the Services receive timely reimbursement for contingency 
operations.
    Question. The Committee understands that military units deployed to 
operations other than war such as the NATO mission in Bosnia suffer 
degradation of their combat skills. How long would it take to refresh 
the skills of the units now deployed in Bosnia so that they are capable 
of supporting combat related contingency?
    Answer. First, we need to make clear that not all units suffer 
combat skill degradation. Some individuals, such as air traffic 
controllers and combat service support personnel perform the same 
functions as their wartime mission and therefore increase their skills. 
However, many units, especially combat units, experience readiness 
degradation. For example, combined arms maneuver exercises are 
difficult to accomplish during peacekeeping missions.
    The time needed to regain perishable skills obviously varies, 
depending on the length of the deployment and the type of unit. 
Experiences from Bosnia show that under ideal peacetime conditions the 
preferred time for a unit to be ready for wartime redeployment is equal 
to approximately the length of the deployment they just completed. This 
time includes not only training but time for personnel turnovers to 
take place and time for authorized leaves. This time, however, can be 
significantly condensed if required to meet actual contingency 
deployment timelines. It is preferred to deploy other available units, 
or deploy returning units last since this maximizes the time available 
to prepare a unit for redeployment. Under wartime conditions, it is 
estimated that a unit would need approximately 45 full training days 
before the force is ready to redeploy for a warfighting contingency. 
This assumes no time off and minimum personnel turnover.
    Question. The Committee understands that the Air Expeditionary 
Forces deployed in support of SWA effectively represent two wings in 
the Air Force structure that have neither their own personnel, 
aircraft, nor support equipment. All such resources are drawn from 
existing non-deployed units. Does the deployment of the AEFs combined 
with supporting the Bosnia mission threaten your ability to 
successfully carry out the 2 MRC scenario? If not, why?
    Answer. While these ongoing peacetime contingency operations may 
increase the risk of not meeting planned Two Major Theater War (2 MTW) 
timelines, they do not threaten our overall ability to successfully 
execute a 2 MTW scenario. In fact, if the MTW is in SWA, our ability to 
respond is actually enhanced because part of the force is already in 
place. These deployments do have an impact on our forces. The use of 
readiness spares, equipment, and the effect of tempo on our people is 
significantly increased. However, these effects are manageable and we 
are keeping our wartime response capability within the band of 
acceptable risk. As long as timely reimbursements are made to the 
Services to replenish stocks, maintain equipment, sustain our rotation 
policy, and prevent cutting into modernization accounts our ability to 
successfully carry out the 2 MTW scenario will not be reduced.

  Bosnia and Southwest Asia--Timely Passage of the 1998 Supplemental 
                           Appropriations Act

    Question. Several witnesses before the Committee during 
consideration of the fiscal year 1999 budget request have emphasized 
the importance of receiving supplemental appropriations to fund 
contingency operations in a timely fashion. Witnesses have indicated 
that, absent such funding, the Department would have to curtail 
readiness related training activities, depot maintenance, and real 
property maintenance. What specific actions will the Department have to 
take to reduce operating costs in order to support contingency 
operations if supplemental funding were unavailable? What training 
events would be canceled within each of the Services? Would depot level 
maintenance or other equipment maintenance workload be deferred? What 
other actions would be taken?
    Answer. If supplemental funding were not available, the Department 
would be forced to take extreme measures that would fracture readiness 
and entail months of recovery to achieve the current levels of 
readiness. Some examples of actions that might be taken are: deferral 
of military personnel accessions and permanent change of station (PCS) 
rotations, defer equipment inductions into depot maintenance 
facilities, curtail or cease noncontingency related training, and 
furlough of civilian personnel. At this point in the fiscal year, the 
Department is left with relatively few options to prevent wholesale 
upheaval to critical, basic operating programs.
    Question. What effect will this have on readiness?
    Answer. The effect on readiness would be catastrophic. Deferred 
equipment maintenance will result in fewer pieces of equipment being 
mission capable and/or available for training. In addition, fourth 
quarter training activities would be curtailed to the point that a high 
proportion of units would have their readiness levels degrade to the C-
3 level, or worse. The severity of the impact would be that once these 
degradations occur, it will take many times longer for these units to 
recover back to the levels experienced before having to absorb the 
supplemental costs.
    Question. When is the decision point for canceling training or 
deferring other activities?
    Answer. The Department needs assurances by early April that funding 
will be provided on a nonoffset, emergency basis. Currently, the 
Services have been told to execute their training programs on the 
assumption that contingency operations funding would be provided 
without offset to preclude any premature actions. If the assurances are 
not received, the Services will begin modifying their training programs 
and maintenance efforts (equipment and real property), as well as other 
program efforts, in anticipation that funding may not be received in 
time, or in full, to support contingency costs. Some actions taken by 
the Services, such as missed training opportunities or joint exercises, 
may be nonrecoverable.
    Question. On December 18, 1997 President Clinton announced that he 
had agreed in principle that U.S. forces should participate in a Bosnia 
peacekeeping force after the mandate of the current SFOR expires. 
Decisions made recently by NATO planners have led to the requirement 
for approximately 6900 U.S. military personnel (as opposed to 8500 in 
SFOR) to remain in Bosnia until the achievement of a self-sustaining 
peace in the region.
    Could you explain to the Committee why it is necessary for U.S. 
forces to stay in Bosnia past the June 30 deadline for SFOR? In your 
answer please address the following:
     The national security interest of the U.S. regarding 
Bosnia;
     the military mission of the post-SFOR deployment; and
     the final goals and objectives of U.S. policy in Bosnia.
    Answer. The continued presence of U.S. forces in Bosnia and 
Hercegovina is necessary to promote our national security interests. 
The war in Bosnia has always had the potential of spreading to 
neighboring countries such as Greece and Turkey, two important US 
allies who are also members of the North Atlantic Treaty Organization. 
While tremendous progress has been made in Bosnia, conditions are not 
yet irreversible, and would likely degenerate with the removal of NATO 
troops. Recent strife in Kosovo further underscores the need for 
continued US leadership, working closely with our European friends, to 
prevent regional instability from adversely affecting European 
security.
    The Post-June SFOR mission is to prevent a resumption of 
hostilities and maintain the broad support necessary for civilian 
implementation, reflecting a transition of emphasis from military to 
civilian implementation. The intent and objective of the force will be 
to sustain the current pace of civilian implementation, maintaining the 
gains achieved to date and the current rate of progress towards full 
implementation of the Dayton Agreement. The force will promote the 
consolidation of SFOR's achievements and allow the peace to become more 
self-sustaining, but would do so without exceeding SFOR's current level 
of intensity and involvement.
    Key Military Tasks:
     Maintain a deterrent military presence in the country
     Act to prevent major breaches of the cessation of 
hostilities or the removal of heavy weapons or air defense weapons from 
cantonment
     Continue to operate Joint Military Commissions at 
appropriate levels
     Contribute, within means and capabilities and in a manner 
similar to SFOR's current approach, to a secure environment in which 
the international civil organizations and the Parties to the Peace 
Agreement can carry out their responsibilities under the agreement.
     Ensure force protection and own freedom of movement
     Ensure continued compliance with the cease-fire and zone 
of separation and other military aspects of the Peace Agreement
     Monitor, and if required, enforce compliance with the 
military aspects of the GFAP
     Enforce rules and procedures governing the use of airspace 
over B-H in coordination with the B-H Civilian Aviation Authority. 
Control the airspace over B-H.
    Key Supporting Tasks: Within means and capabilities and in a manner 
similar to SFOR's current approach:
     Provide, on a case by case basis, support to the High 
Representative in his role of implementing the civil aspects of the 
Peace Agreement, as well as to the other principal civil organizations
     Support the Supervisor in implementation of the Brcko 
arbitration decisions presently in effect
     Support the OHR and OSCE in the conduct of elections and 
the installation of elected officials
     Support and promote measures to encourage returns of 
refugees and displaced persons in cooperation with the OHR, UNHCR, and 
other international organizations but not to forcibly return refugees 
or undertake to guard individual locations
     Support OHR and OSCE in media reform efforts
     Support ICTY and efforts against war criminals
     Support the OHR and International Police Task Force (IPTF) 
in assisting local police by providing back-up support and a secure 
operating environment, directed towards the creation of a reformed, 
restructured indigenous police force, but without undertaking civil 
police tasks
     Provide, on a case by case basis, selective support to the 
OSCE, if requested, in implementing Annex 1B of the Peace Agreement in 
B-H.
     Contributing to the continued improvement of freedom of 
movement throughout B-H
     Support the Standing Committee on Military Matters (SCMM).
    The goal of U.S. policy in Bosnia is to create a sustainable peace 
where a sizable NATO presence is no longer necessary and diplomatic, 
institutional, and economic levers are sufficient to sustain peace in 
the region. Ten benchmarks have been established which would likely 
create the conditions needed for a NATO ground troop withdrawal:
    1. Local police forces need to be restructured, re-integrated, and 
re-equipped.
    2. A phased and orderly process for returns of refugees and 
displaced persons should be in place to effectively deal with civil 
disorder in accordance with western standards.
    3. Less political party control of the media, more accessibility 
for all political parties, and a more formidable ``independent'' media.
    4. The military balance will require confidence and security 
building measures, arms control, and greater inter-entity military 
cooperation.
    5. Functioning Joint-Institutions that decrease official corruption 
through the creation of legitimate revenue/disbursement mechanisms.
    6. Democratization. The September 1998 elections must be conducted 
in a free and fair manner. The need for OSCE supervision/arbitration 
should reduce. Local, entity, and national governments should function 
transparently.
    7. Economic reconstruction. The interim currency should be in 
circulation, public corporations formed, transparent budgets in place, 
and an IMF program in place.
    8. A multi-Party solution to the administration of Brcko should be 
in place.
    9. Improved party cooperation on the war crimes issue.
    10. International organizations should be able to function without 
a large NATO presence.
    Question. In his certification to Congress that the continued 
presence of U.S. forces, after June 30, 1998 in Bosnia is required, 
President Clinton notes several ``benchmarks'' which must be achieved 
prior to the ultimate withdrawal of forces from the region. They 
include, the establishment of judicial reform, the dismantling of pre-
Dayton institutions, the regulation of the media, free market reforms, 
the conduct of free elections, and a whole host of other political, 
civic and economic goals.
    Does the pursuit of these goals, in fact, constitute nation 
building by U.S. forces?
    Answer. No. The leaders of Bosnia, Serbia, and Croatia agreed on a 
formula for peace at Dayton. The Dayton agreement, balancing a single 
state with two multi-ethnic entities, created a road map for 
stabilization, reconciliation, and long-term peace. Ultimately, it is 
the responsibility of the Parties to implement their commitments. The 
new powers granted to the High Representative at the Bonn Ministerial 
have enabled the international community to marginalize obstructionists 
so that regional moderates can accelerate progress themselves. For 
example, the election of Milorad Dodik as the new prime minister of 
Republika Srpska has already substantially improved the climate for 
Dayton implementation. Dodik moved quickly to sign international 
agreements in support of economic reform, a more democratic media, and 
police restructuring.
    Question. What will be the specific role of U.S. forces in the 
attainment of these benchmarks?
    Answer. As indicated in the ``Key supporting Tasks'' under SFOR's 
mandate, it will depend on ``the means and capabilities'' of the force 
and will not exceed SFOR's current level of intensity and involvement. 
While civilian implementation progress has lagged behind the military 
components of Dayton, we expect continued progress over the coming 
months--especially on public security and media issues, and the 
establishment of a generally more stable environment.
    Question. Isn't the military mission largely finished?
    Answer. The military mission is largely finished; however, peace 
remains fragile and reversible. A continued military presence is 
required until the implementation process is self-sustaining and 
manageable through non-military diplomatic, economic, and institutional 
instruments.
    Question. How will the attainment of the benchmarks be reviewed and 
evaluated?
    Answer. The plan is for NATO to conduct reviews every six months to 
assess the situation on the ground, with a view to reducing forces as 
soon as possible. Our intention is to maintain the pace of 
implementation and transition the maintenance of peace to diplomatic, 
institutional, and economic levers.
    Question. What will be the future role of U.S. forces in a post-
SFOR deployment regarding:
     the capture of indicted war criminals?
     the resettlement of refugees?
    Answer. SFOR's original guidance in respect to war criminals will 
not change. SFOR will only detain war criminals if they are encountered 
in the course of performing SFOR's mission and the tactical situation 
allows. In these situations, commanders will act to detain alleged war 
criminals only if they deem risks to be acceptable. We must remember, 
the Parties bear first responsibility under Dayton for bringing war 
criminals to justice, and we put intense pressure on them to perform 
this mission.
    SFOR will support phased and orderly returns of refugees and 
displaced persons by contributing to a safe and secure environment but 
not to forcibly return refugees or displaced persons or undertake to 
guard individual locations.

       Bosnia and Southwest Asia--Supporting the Two MRC Scenario

    Question. General Shelton, what is your present assessment of the 
security threat posed to U.S. forces participating in SFOR?
    Answer. ------.
    Question. What is your assessment of the likelihood that 
hostilities would resume in Bosnia if SFOR were to be withdrawn on 
schedule?
    Answer. The current NATO-led SFOR mission in Bosnia plays a 
critical role in promoting stability in the region by separating former 
warring parties and enforcing important aspects of the Dayton Peace 
Accord. ------ by all former warring parties in Bosnia as a credible 
military force which ------. Since December 1995 significant progress 
has been made in Bosnia due to the climate set by the credible military 
presence of IFOR and SFOR. Much remains to be accomplished in the 
civilian implementation tasks before an enduring normalization can take 
hold. ------.

                           Violence in Kosovo

    Question. Hostilities have flared up in the Serbian province of 
Kosovo, where ethnic Albanians constitute 90% of the population. 
Serbian government forces have cracked down on Albanian separatists and 
civilians have been killed. Do you believe the recent violence in 
Kosovo will spread or even endanger the Dayton Accord in Bosnia?
    Anwer. Although the immediate focus is on the human rights of the 
ethnic Albanians in Kosovo, the broader concern is that escalating 
violence in Kosovo could spill over into neighboring Albania and FYROM, 
affect Dayton implementation, and, in the extreme, embroil other states 
in the region, such as Greece and Turkey.
    Question. What, if any role, is being considered for U.S. forces in 
responding to this violence?
    Answer. At present, the USG and our Contact Group allies are 
focusing on diplomatic and economic measures to prompt the Milosevic 
government to comply with Contract Group demands to defuse the violence 
in Kosovo and engage in meaningful dialogue with the Kosovars for a 
peaceful solution within the FRY.
    Question. Since 1993, U.S. forces have participated in an U.N. 
observer mission, called Task Force Able Sentry, in the former Yugoslav 
republic of Macedonia, which borders the Kosovo region of Serbia. The 
U.N. mandate for this observer force expires this summer. Are we 
considering sending additional forces to Macedonia in response to the 
events in Kosovo?
    Answer. There is no current planning to send additional U.S. troops 
to the FYROM.
    Question. What is our position regarding extending the deployment 
of the U.N. observer forces beyond this summer's expiration date?
    Answer. The U.S. and our Contact Group partners agreed at their 9 
March meeting to seek a continuation of the international military 
presence in FYROM after the August expiration of UNPREDEP. The U.S. 
would participate in this follow-up mission.
    Question. Should the U.N. mandate expire, would either U.S., 
unilaterally, or NATO consider deploying forces to Macedonia?
    Answer. As the Secretary of State has noted, we are keeping all our 
options open in dealing with the problems in Kosovo. We do believe a 
continued military presence is essential to regional stability.
    Question. Mr. Secretary, concerning the Presidential selected 
Reserve Call-up (PSRC) for Reservists to Bosnia, the Committee 
understands that you have recently rescinded the August 15, 1998 end-
date that Secretary Perry set for the time all Reservists would have 
required to back at their home bases.
    What is the new end-date authority you have set, and what are the 
personnel levels you determined are necessary for their continued 
participation in support of operations in Bosnia?
    Answer. I issued the latest direction on the use of PSRC in Bosnia 
in 20 Feb 98 in a memorandum to the Secretaries of the Military 
Departments and the Chairman of the Joint Chief of Staff, subject 
``Callup of the Selected Reserve in Support of Operations in Bosnia.'' 
The memorandum removed the end date for operations and made no change 
in the maximum number of personnel that could be activated at any one 
time. The Joint Staff, EUCOM, and the Services are currently working on 
what personnel levels are appropriated for the follow-on force.

                         Bosnia Reserve Forces

    Question. By law, Guard and Reserve units called up under the PSRC 
authority can serve no more than 270 days. Is there debate in the 
Department of whether the law allows Reservists to be activated for a 
second 270-day tour?
    Answer. The question has been raised within the Department 
regarding the legality of calling Selected Reserve members to active 
duty under PSRC for a second 270 day tour for the same PSRC operation. 
It has been, and currently is, the policy of OSD that no individual or 
unit called to active duty under PSRC will serve more than a total of 
270 days for a PSRC operation.
    Question. If the Pentagon does not have the legal authority to 
order double tours for Reservists, do you believe the Army Reserve and 
Guard units can supply enough people who have those skills that are 
critically needed in Bosnia?
    Answer. Overall, the answer is yes. There are a small number of 
critical skills that may have to be resourced from other components or 
Services. We have used less than 2% of the Selected Reserve in this 
operation. Recently, MG Max Baratz, the Chief, Army Reserve, who is 
supplying the majority of Reserve forces to OJG, stated the USAR could 
supply soldiers to the Operation for three more years at the current 
levels. Today Reservists are an integral part of all military 
operations. We will continue to use Reservists for this mission for the 
foreseeable future. Integration of the Active and Reserve components 
has resulted in increased reliance on the Reserves. The Reserves have 
performed well when called upon. Proof of this is that commanders in 
the field cannot distinguish between AC and RC soldiers.
    Question. What types of units has Forces Command indicated will be 
difficult to fill because all Reserve components have been used once 
under the PSRC already?
    Answer. Broadcast Public Affairs Detachments (BPAD), Target 
Acquisition Batteries, firefighters, civil affairs, and psychological 
operations units are some of the units FORSCOM is concerned about. To 
date no mission has been neglected or not accomplished for lack of a 
Reserve unit. And, as I stated above the Reserves believe they can 
accomplish these missions for the foreseeable future. As the follow-on 
force requirements are defined, FORSCOM and the Army are working out 
solutions for critically needed skills and units. It is also necessary 
to remember that not all critical skills reside in the Army. Other 
Services and Reserve components, as well as our allies, have the 
ability to accomplish many of the missions required in Bosnia. We are 
looking at every available option, but have no doubt we can accomplish 
the mission given us.
    Question. President Clinton implemented the call-up for military 
operations in Bosnia on December 8, 1995. What is the Department's 
perception of the impact this long deployment has had on the morale of 
Reserve personnel, their families and their jobs? Do you believe 
recruiting and retention will suffer as a result of the Bosnia 
deployment?
    Answer. Several policies are in effect to ensure Reserve personnel 
and their families are protected during a PSRC. The military services 
are required to ensure Reserve component members and their families are 
prepared and adequately served by family care systems and 
organizations. The Bosnia PSRC proved the success of those truly joint 
efforts. Family center, whether located on Active or Reserve 
installations, are available to assist all family members, regardless 
of component or service affiliation. Only a few anecdotal instances 
have been reported whereby family members were not adequately 
supported.
    Likewise, there have been virtually no reported incidences of 
Reserve component members losing their jobs based on their 
participation in the PSRC. In fact, cases referred to the Department of 
Labor for resolution and the number of inquires by employers have 
remained constant since the conclusion of DESERT STORM.
    Data collected over the past two years indicate a stable retention 
rate for all components, at least in the short term. There are, of 
course, individual and unit cases where problems have been identified, 
but again they are anecdotal in nature. We will continue to monitor the 
available data closely to ensure there are no long-term negative 
effects.
    Question. When U.S. forces were initially deployed in support of 
the NATO mission in Bosnia they did not pursue war criminals. Such 
activity was considered outside the scope of the military tasks 
outlined in the Dayton Accords. As U.S. support of the Bosnia mission 
has evolved, and U.S. commanders have changed, there appears to be a 
greater willingness to pursue war criminals.
    What is the current U.S. policy concerning the pursuit and capture 
of war criminals in Bosnia?
    Answer. SFOR will only detain war criminals if they are encountered 
in the course of performing SFOR's mission and the tactical situation 
allows. And the policy is working. The British, Dutch, and US NATO 
operations to detain indicted war in Prijedor, Vitez, and Bijeljina 
were successfully conducted with no loss of life to NATO troops. In 
addition, as a result of intense U.S. diplomatic pressure 10 indicted 
Croats turned themselves into the Hague in October, 1997. More 
recently, the election of Milorad Dodik as the new prime minister of 
the Republika Srpska has improved the Serb government's stance on this 
issue. Dodik has publicly encouraged Serbs suspected of war crimes to 
turn themselves in, and several have complied. International pressure 
is on-going.

                    Bosnia--Pursuit of War Criminals

    Question. What funding changes have occurred to the Bosnia funding 
profile to facilitate greater activities in this area? Has OPTEMPO 
increased for this purpose?
    Answer. The funding profile remains consistent for Bosnia. We have 
not changed the Bosnia Supplemental to facilitate the pursuit of war 
criminals. As it stands now, all costs incurred by the commands that 
are in support of any CINCEUR mission are captured by those supporting 
commands for reimbursement and are included in the Bosnia supplemental. 
We have not increased the OPTEMPO for the purpose of actively pursuing 
war criminals.
    Question. Will the U.S. need to deploy different types of units in 
order to take a more active role in the pursuit of war criminals in 
Bosnia?
    Answer. Current policy is to apprehend within normal course of 
duties. There are United States forces in place which can carry out 
that part of the mission. Should there be a more active role, not 
currently contemplated, we will reevaluate military requirements.
    Question. Does DoD anticipate a need to beef up force protection in 
anticipation of the possible reaction of the local population to this 
policy?
    Answer. Presently, I believe our force protection posture is 
adequate to meet anticipated threats. The theater commander continually 
assesses the capability, equipment, awareness, and current force 
protection measures to ensure that they are sufficient to mitigate any 
possible reaction. I am confident he will employ additional measures if 
the situation warrants.

                         Bosnia Cost Estimates

    Question. Continued support of the NATO mission in Bosnia will 
involve a decrease, from 8,500 to 6,900, in the number of U.S. troops 
in country. Independent of the decision to extend this mission, the 
1998 funding provided so far is insufficient to support U.S. forces 
through June because the current funding level assumed U.S. presence 
would decline to 5,000 troops in country.
    The Committee understands that, independent of the decision to 
extend the Bosnia mission, the DoD does not have full funding to 
support the mission through June 1998. Why? What is the extent of this 
shortfall?
    Answer. The amount originally appropriated to support Bosnia 
operations through June now appears to be more than adequate. There has 
been a cost increased of $343 million for the additional troop support 
to cover the election period, which slipped from June 1997 to Sep/Oct, 
and to maintain the current force level of 8,500 troops in Bosnia 
through June 1998. (The FY 1998 President's budget request assumed only 
5,000 troops would be required as the NATO mission headed towards 
termination in June. Based on a reassessment of requirements, which 
included the impact of the municipal election slippage, it was decided 
to maintain a level of 8,500 troops in Bosnia.) Cost reductions have 
more than offset the increase. Specifically, requirements were reduced 
by $182 million for Army contract logistics support (LOGCAP) and 
reduced communications, TDY, lease and Intel systems requirements. 
Secondly, other fact-of-life changes reduced Bosnia requirements an 
additional $190 million. These fact-of-life adjustments included the 
elimination of JSTARS requirements (-$68 million), the deferral of base 
camp closures due to the mission extension (-$60 million), the movement 
of the carrier battle group to the Persian Gulf (-$16 million), and 
reduced Air Force OPTEMPO and mission support requirements (-$46 
million). Therefore, currently we estimate that about $29 million of 
funds originally appropriated can be reapplied to maintain our presence 
in Bosnia beyond June 1998 ($343 million less $182 million and $190 
million).
    Question. What additional funding is required in fiscal year 1998 
to extend the mission through the end of the fiscal year?
    Answer. Extension of Bosnia operations through the end of Fiscal 
Year 1998 requires an additional $516 million based on the probable 
NATO plan that would require about 6,900 U.S. troops in Bosnia. This 
estimate assumes that U.S. presence in Bosnia will be gradually reduced 
to the 6,900 level by October 1, 1998.
    Question. The Committee is aware the U.S. troops strength in 
country will decline from 8,500 to 6,900. This reduction is dependent 
on a pending NATO decision on force requirement. When do you anticipate 
that this decision will be made? If NATO decides that U.S. strength 
should remain at 8,500 what would be the additional funding 
requirements?
    Answer. NATO already has selected a mission option for the follow-
on force to the existing Stabilization Force (SFOR). The U.S. has 
announced that its contribution to that follow-on force will be reduced 
from the current level of 8,500 to 6,900. The Italian and Argentine 
governments have both expressed a strong desire to provide additional 
forces for new Specialized Units to support the International Police 
Task Force (IPTF) in its efforts to democratize and strengthen the 
indigenous public security apparatus. This will allow SFOR to better 
focus its resources and provide offsets to force reductions. 
Additionally, Belgium has also voiced a desire to increase their force 
contributions. A final number on total SFOR follow-up force troop 
strength will not be known until after the upcoming NATO Force 
Generation Conference.
    Question. The Committee has learned that the Air Force projects its 
Bosnia related costs will decline in fiscal year 1998. Why? How much 
will Air Force costs decline?
    Answer. In total, the Air Force Bosnia requirement for fiscal year 
1998 will decrease by $57.7 million. Fact-of-life reductions of $103.2 
million result from nondeployment of JOINT STARS, reduced OPTEMPO and 
transportation requirements, and a reduction of guard/reserve military 
personnel supporting Bosnia operations. This $103.2 million reduction 
is offset by an additional $45.5 million required for the 3 month 
extension of Bosnia operations from June through September. The balance 
of $57.7 million has been applied to the Army cost increases related to 
higher troop levels and the 3-month extension.
    Question. Army logistical and other support costs are projected to 
increase despite reductions in troop strength and more efficient 
contracting practice for logistical support (i.e., LOGCAP). Why will 
logistical and other support costs increase for the Army in Bosnia?
    Answer. The Army's logistic and other support costs are in fact 
decreasing due to efficiencies, better business practices, and 
negotiation of better contracts. The reason they appear to be 
increasing is because the troop level maintained for most of 1998 
(8,500) is almost double the level projected in the President's budget 
estimate (5,000). Additionally, the mission no longer will be 
terminated in June 1998, but will be extended to the end of the fiscal 
year, with the attendant additional costs. (The President's budget 
request for Bosnia was based on the assumption that the United States 
could reduce the troop strength to 5,000 for 1998 with an end of 
mission in June 1998.

                      Bosnia--Reconstitution Costs

    Question. Data developed for the Committee by the Surveys and 
Investigation staff indicates that the criteria for allowable 
reconstitution costs are applied more liberally to the Army than to the 
Air Force. These costs involve equipment maintenance and replenishment 
of supplies for units returning to their home station after having been 
deployed in support of contingencies. The S&I finds that a wide range 
of logistical and operational activities, funded as part of routine 
military operations, are reported as incremental contingency costs. As 
a result, reported incremental costs are not accurate and are inflated. 
What is the definition of ``reconstitution'' costs as they related to 
contingency operations?
    Answer. Reconstitution costs are all incremental costs associated 
with bringing the personnel and equipment back up to the same standard 
they were in prior to the deployment. Reconstitution ensures that 
forces are returned to appropriate deployable readiness postures.
    Question. How is this definition applied to each of the Services? 
What are the allowable reconstitution costs for each that are included 
in the Supplemental request? Please be specified as the types of costs 
that are included.
    Answer. The definition is applied equally to each Service; however, 
each Service is different in its structure, number and type of deployed 
units, and the type mission being performed in Bosnia. The Army's 
projected reconstitution costs for fiscal year 1998 are $67.7 million. 
For the Army, requirements include maintenance operations to replace 
broke and damaged part; performance of deferred services and repairs; 
and in some cases conducting rebuild and overhaul operations on 
vehicles, aircraft, and unit equipment. Also included are requirements 
to replace damaged, destroyed, or lost unit and personnel equipment; 
cleaning, packing, and returning equipment to the supply system or 
unit/war reserve status; and retraining back to Mission Essential Task 
List (METL) standards, especially for units that were not performing 
unit warfighting missions during the contingency operations.
    The Air Force's reconstitution requirements associated with Bosnia 
operations relate to bare base equipment and include, as applicable, 
the movement of equipment to a reconstitution site, cleaning and repair 
(sewing of tentage, replacing parts missing or damaged, etc.), and 
packing into storage containers for future use. The Air Force's 
reconstitution requirement in fiscal year 1998 for Bosnia operations is 
$1.5 million to reconstitute and transport the tent city at Aviano Air 
Base. Depot maintenance and spare parts that the Army includes as 
reconstitution requirements are financed by the Air Force through the 
incremental flying hour OPTEMPO costs.
    Question. Are there equipment maintenance or other logistical 
costs, similar in nature to reconstitution, that the Department will 
not incur because units are deployed in support of contingencies?
    Answer. Yes. There are cost avoidance offsets that are applied 
against the total contingency operations bill. The Department of 
Defense's policy is to report only incremental costs for contingency 
operations. We therefore reduce the total cost of the operation by the 
amount of funding already provided to the deploying units for their 
normal operations. For example, offsetting reductions are made for 
basic allowance for subsistence not paid, base operations support not 
provided, and budgeted training (to include flying hours/tank miles) 
not conducted by deployed units and personnel. These offsets include 
individual, small unit and collective training done at home station, 
routine maintenance, and other training such as command post exercises 
that will not be performed because the unit is deployed.

                           Iraq--Policy Goals

    Question. Airstrikes against Iraq were narrowly avoided last month 
after U.N. Secretary General Kofi Annan persuaded Saddam Hussein to 
fully cooperate in granting access to U.N. inspectors who are examining 
the Iraqis' Weapons of Mass Destruction program (WMD). The First two 
inspecitons since the agreement have occurred without any problems and 
with ``full cooperation'' from the Iraqi side.
    Mr. Secretary, as we sit here today, what is the status of the 
Iraqi WMD program. What needs to be accomplished under this current 
inspection regime to ensure that the threat posed by Iraq's WMD program 
has ended?
    Answer. Most of what we know about Iraq's WMD program is dervied 
from UNSCOM's reports to the Security Council. UNSCOM cannot certify 
Iraq's claim that it unilaterally destroyed its WMD programs as 
required under UN Security Council Resolution 687. These gaps in Iraq's 
declaration in combination with its active non-cooperation with UNSCOM 
leads UNSCOM to the conclusion that Iraq continues to harbor proscribed 
missiles, launchers and chemical and biological agents and munitions. 
The threat of Iraq's WMD program will end if and/or when UNSCOM can 
verify to the Security Council that Iraq has complied with the 
requirements to destroy its WMD and stop pursuing the production and 
R&D of these programs. Granting UNSCOM unfettered access to all 
suspected WMD sites is only part of the equation; Iraq must also 
furnish information that UNSCOM can use to verify Iraq's full final and 
complete declarations on these programs.
    Question. Are you satisfied with the initial level of Iraqi 
cooperation in fulfilling the terms of the new agreement.
    Answer. During the past several weeks, UNSCOM has tested Iraq's 
commitment to the Annan aggreement and I am please to report that thus 
far the Iraqis have cooperated by providing UNSCOM with unprecedented 
access. We remain very skeptical of Saddam's intentions however, and 
intend to watch his actions very closely. His commitment must be 
tested. We believe this will not be a short term effort. UNSCOM is 
preparing right now to conduct presidential site inspections as the 
next logical step in the testing process.
    Question. What is the Administration's position on the request of 
Russian that a Russian be named as a second deputy on the UN weapons 
inspection commission.
    Answer. We oippose forcing UNSOM to accept another deputy--one that 
they have not asked for. The crisis we just went through centered on 
UNSOM's independence and effectiveness. We should not undermine that 
principle. UNSCOM is a tightly run, effective organization whose 
structure is based on technical expertise not on any effort to balance 
regional affiliation. Appointing another deputy that artificially 
broden brodens regional representation with apparent gain in technical 
capability is entirely unjustified. We welcome Russian participation in 
UNSCOM. One of its chief analsyt plays a role in UNSCOM's missile 
efforts. We would welcome additional Russian technical experts as 
inspectors or on the New York staff.
    Question. General Anthony Zinni, Commander of CENTCOM has stated 
that he is ``sure that Saddam Hussein will break this new agreement. Do 
you share the General's view?
    Answer. Saddam Hussein has shown consistently that he honors 
agreements only when it is to his advantage; he likewise will break 
agreements when he who perceives advantage in doing so.
    Question. Mr. Secretary, General Shelton, please outline for the 
Committee the goals and objectives of present U.S. policy with regard 
to Iraq. In your answer please discuss:
     The composition of the force to be maintained in the 
region;
     the length of deployment of these forces;
     the benchmarks to be utilized in determining Iraqi 
compliance with the latest UN agreement;
     the consideration of other options for the long term 
containment of Iraq, such as extension of the no-fly zone, tightening 
economic sanctions, and increased financial and military support for 
Iraqi dissidents.
    Answer. Our goals and objectives in the Gulf are simple: to see 
that Saddam complies with all relevant United Nations Security Council 
Resolutions. Our forces are in-place to respond should he not comply, 
and to insure the security of the region.
     In the region we are maintaining an augmented force 
posture, consisting of two aircraft carrier battle groups along with a 
substantial cruise missile capability, over 100 land-based aircraft, 
and a brigade-sized task force in Kuwait.
     These forces will remain deployed until we are assured 
that Saddam will abide by his word. Once that is established, we are 
considering options to return to a more normal posture.
     The benchmarks to determine Iraq compliance with the 
latest UN Agreement are full, immediate, and unfettered across for 
UNSCOM, as called for in the Annan-Aziz Memorandum of Understanding and 
UNSCR 1154.
     These are among the options which have been discussed in 
the past and would be considered as the situation requires.
    Question. Does the Administration retain the right to conduct 
future air strikes against Iraq for non-compliance with the agreement, 
even in the absence of sanction by the UN Security Council?
    Answer. We will keep our military forces in the Gulf at a high 
state of preparedness while we see if Iraq lives up the commitment that 
it has signed. We remain resolved to secure by whatever means necessary 
Iraq's full compliance with its commitment destroy its WMD. We do not 
believe another Security Council resolution is necessary for us to use 
force should it become necessary.
    Question. General Shelton, how long can the OPTEMPO be maintained 
in the Persian Gulf to ensure the effectiveness of airstrikes should 
they become necessary?
    Answer. Our OPTEMPO can be maintained in the Persian Gulf as long 
as necessary given that threats in other locations remain at current 
levels. The Navy can maintain 2 carriers indefinitely within Global 
Naval Force Presence Policy schedules. However, the result will be 
reduced presence elsewhere. The Air Force can also maintain the current 
level of presence for a protracted period. However, it will have 
adverse effects on exercise support, air crew training, and quality of 
life issues. Low Density/High Demand assets managed careful management 
and will impact our ability to simultaneously support operations in 
other CINCs' Areas of Responsibility.

               Southwest Asia--Use of Gulf Allies' Bases

    Question. With the exception of Kuwait, the U.S. allies in the 
Persian Gulf have expressed an unwillingness to allow the U.S. to use 
bases in these countries for the purpose of launching strikes on Iraq. 
How has the attitude of our Persian Gulf allies effected the resource 
mix, and therefore the budget request in support of Southwest Asia?
    Answer. We consulted with our Persian Gulf allies before and during 
the crisis. We considered these consultations as we developed our 
military options and the forces required to execute these options. 
Ultimately, in no instance did a Persian Gulf ally refuse a request for 
stationing or supporting forces.
    The forces we deployed to the region were requested by CINCCENT 
based on his military judgment on what would be required in the event 
the National Command Authority directed him to take military action.
    Question. Has the position taken by our Persian Gulf Allies given 
rise to the need for two carrier battle groups in the Gulf?
    Answer. No. The augmented force mix for this crisis includes two 
aircraft carrier battle groups and is based on CINCCENT's 
recommendations. CINCCENT took into account the possible missions he 
might be ordered to conduct, the availability of forces, and the unique 
capabilities each element possesses.
    We are considering options to return to a more normal force 
structure when the situation warrants.
    Question. The Committee is aware that the Air Force maintains two 
Air Expeditionary Forces (AEFs) in the Gulf region should air strikes 
prove necessary. Does the attitude of our Persian Gulf allies call into 
question the utility of the AEFs? Can these assets be utilized fully if 
the U.S. cannot launch land based strikes against Iraq?
    Answer. First, let me explain that we normally deploy a single AEF 
to the Persian Gulf to fill the gap when a carrier battle group is not 
in the region. When the Iraqi crisis began in November, 1997, the 
Secretary decided, based on CINCCENT's military judgment, to leave that 
AEF in Bahrain in addition to the carrier. This is the only AEF we have 
deployed. A second carrier battle group was added to the force 
structure in February of this year.
    We were consulting with our Gulf allies during each of these 
deployment decisions. As a consequence, we were confident that we were 
not asking our allies for support beyond what they were able to 
provide. There was never any time at which we would not have been able 
to utilize land-based aircraft as required in our planned military 
options.
    Question. Does the budget request, particularly the buildup of Air 
Force assets, assume that the resistance of our Gulf allies to land 
based strikes would fade if hostilities began?
    Answer. I believe our Gulf allies would fully support military 
action consistent with our consultations with them. This budget request 
does not presuppose any opposition by our Gulf allies.

                   Southwest Asia--Rotation Schedule

    Question. The fiscal year 1998 supplemental budget request 
indicates that the current force levels will be deployed in Southwest 
Asia through the end of fiscal year 1998. Army and Air Force personnel 
will be deployed on a four month rotation cycle which means there will 
be a second rotation in June/July 1998. The second rotation will come 
to an end in October 1998 (fiscal year 1999). DoD informally advises 
that the fiscal year 1999 tail will be at least $250 million to cover 
the reconstruction and redeployment costs of the second troop rotation 
to Southwest Asia. The fiscal year 1998 Supplemental/fiscal year 1999 
Budget amendment indicates that all Southwest Asia costs are yet to be 
determined. Does the presence of U.S. troops in the region imply a 
fiscal year 1999 tail for this operation?
    Answer. The fiscal year 1999 budget amendment contains no cost 
estimate for requirements related to the higher force levels in 
Southwest Asia. However, if the higher force levels are maintained 
through or beyond the end of fiscal year 1998, an additional $252 
million for redeployment/reconstitution will be required in fiscal year 
1999 as well as any additional costs to sustain these forces.
    Question. Please explain to the Committee the reconstitution and 
redeployment costs that you anticipate the Department will incur in 
fiscal year 1999.
    Answer. Assuming all recently deployed forces redeploy in fiscal 
year 1999, it is estimated that minimum costs of about $252 million 
will be incurred in fiscal year 1999 to reconstitute and redeploy those 
forces. The Army and the Air Force costs would be approximately $124.4 
million and $27.4 million, respectively. The Navy's fiscal year 1999 
requirement is $93.0 million. In addition to covering redeployment and 
reconstitution, the estimate includes maintaining a 2.0 Carrier Battle 
Group and 1.0 Amphibious Readiness Group/Marine Expeditionary Unit 
presence through December 1998. In addition, the U.S. Special 
Operations Command will require $6.8 million in fiscal year 1999 for 
redeployment and reconstitution costs.

                     Southwest Asia Cost Estimates

    Question. Congress provided a total of $670 million to support a 
continued U.S. presence in the Persian Gulf. DoD estimates indicate 
that the current surge in U.S. presence will cost an additional $1.3 
billion. Army costs are driven by the increase in personnel from 2,900 
to 10,200, Navy and Marine Corps forces have increased from 1 to 2 
carrier battle groups plus 1 amphibious ready group, and the Air Force 
has increased the number of planes in the region by 57%. What are the 
total costs to expand the U.S. presence in the Persian Gulf?
    Answer. The total costs for force enhancements is $1,211 million. 
This includes costs associated with the additional force structure and 
related increased OPTEMPO requirements necessary to adequately respond, 
it needed, to continued Iraqi intransigence. This $1.2 billion 
requirement is based on sustaining this higher force structure through 
the remainder of fiscal year 1998. In addition, the supplemental 
identifies fact-of-life increases of $150 million required for higher 
force protection costs and increased operating costs to sustain 
previously planned OPTEMPO levels. This $150 million would have been 
required even if no additional forces had been deployed. The total 
requested in the fiscal year 1998 Emergency Supplemental related to 
Southwest Asia is $1,361.4 million.
    Question. The Committee understands there is at least $250 million 
in costs that will be incurred in fiscal year 1999. This is the tail 
for deployment through the end of fiscal year 1998. What are the costs 
that comprise this 1999 tail?
    Answer. As previously described, a total of approximately $250 
million would be required in fiscal year 1999 to redeploy and 
reconstitute the forces supporting the enhanced presence in Southwest 
Asia to include maintaining the Navy presence through December 1998.

                 Southwest Asia Cost Estimates--OPTEMPO

    Question. OPTEMPO is up for the Air Force because of the increased 
number of planes. However, is the increased number of planes flying 
longer sorties than previously in Enhanced Southern Watch?
    Answer. No. Looking at the monthly average of a representative 
sample of weapons systems, E-3s, RC-135s, and U-2s, there are no 
significant differences between their flying times between September 
1997 and March 1998. With regard to other weapon systems such as the F-
16, the average sortie time has remained similarly static.

               Southwest Asia Cost Estimates--Spare Parts

    Question. The Committee is aware that the Air force has had to 
cannibalize CONUS-based aircraft to assemble the spares kits to support 
deployment. Does the Air Force estimate for Southwest Asia make any 
special allowances to ensure an adequate supply of parts is available 
for this deployment?
    Answer. The Air Force deploys with Readiness Spares Packages which 
are built to support a 30 day deployment with no resupply. These kits 
deploy with a unit and serve as a source of spare parts until demand 
levels can be established at the deployed location. To the extent these 
kits have shortages prior to a deployment, the units may cannibalize 
parts from non-deploying aircraft to fill selected shortages rather 
than wait for items from depot. Filling these initial shortages is part 
of the baseline operating program. The Air Force estimate for Southwest 
Asia (SWA) represents the incremental flying hour spare parts 
requirements/costs incurred in support of SWA. These funds pay for the 
repair or replacement of material used in flying deployed missions.

                       SWA Contingency Operations

    Question. Does the Army have adequate basing to support the 
increase in the number of troops in the region?
    Answer. There are existing bases and facilities in Southwest Asia 
that can support the additional 7,300 troops in the region.
    Question. Does the Army estimate include a component for contractor 
provided logistical support (LOGCAP)? If so, how much?
    Answer. The Army does not plan on using contractor logistic support 
(LOGCAP) for the current operation in Southwest Asia and has not 
included any costs for LOGCAP in the Army's estimate.

              Bosnia and Southwest Asia--Force Protection

    Question. Congress passed a fiscal year 1996 Supplemental 
Appropriations Act totaling $122.6 million to improve force protection 
in the wake of the Kobar Towers bombing.
    In light of current tensions in the Persian Gulf, does the 
supplemental request provide for any additional force protection 
measures?
    Answer. Yes, it includes $16.6 million for additional force 
protection measures. The Army request provides approximately $11 
million for force protection. This includes costs for the forces that 
recently deployed plus annual costs for Infantry units assigned to 
force protection missions for the Patriot batteries routinely deployed 
for Operation Southern Watch. The Air Force has identified requirements 
for additional force protection measures costings $5.6 million for 
additional barriers, sand bags, and other fortification items such as 
concertina wire, to protect the additional forces deployed to the 
Persian Gulf.
    Question. The Committee is aware that there are cost increases 
attributable to improved force protection in Bosnia. How much 
additional funding has the Department requested for such force 
protection in the fiscal year 1998 Supplemental? In the 1999 budget 
amendment?
    Answer. For additional force protection in Bosnia, an Army 
requirement of $6.4 million is included in the fiscal year 1998 
Emergency Supplemental and $5.9 million is include in the fiscal year 
1999 budget amendment.

             Overseas Contingency Operations Transfer Fund

    Question. The Supplemental Appropriations request proposes language 
that would allow the transfer of funds from the Overseas Contingency 
Operations Transfer Fund, and Operation and Maintenance account, to 
procurement, and to the Defense Health Program. Why?
    Answer. The Defense Health Program has incurred costs for Overseas 
Contingency Operations during fiscal year 1998 in Bosnia (Operations 
Joint Guard/Deliberate Guard, formerly known as IFOR and Pre-IFOR) and 
Iraq (Operations Northern Watch, formerly known as Provide Comfort, and 
Enhanced Southern Watch).
    Question. What are the procurement requirements in support of 
Bosnia? Southwest Asia?
    Answer. The DHP has no Procurement requirements in support of 
Bosnia or Southwest Asia. The DHP has incurred Operation and 
Maintenance (O&M) costs in support of Overseas Contingency Operations 
to date.
    Question. What are the Defense Health Program (DHP) requirements?
    Answer.

                                                                  $ in M
Bosnia's Joint Guard/Deliberate Guard.........................      16.3
Iraq's Northern Watch.........................................       0.1
Iraq's Enhanced Southern Watch................................       1.3
                    --------------------------------------------------------------
                    ____________________________________________________

    Total fiscal year 1998 O&M requirements \1\...............      17.7

\1\ Requirement is based on anticipated continuation of fiscal year 
operations due to current political situation.
---------------------------------------------------------------------------

                           Drawdown Authority

    Question. The fiscal year 1998 Supplemental request includes $50 
million for drawdown authority. Section 506 of the Foreign Assistance 
Act of 1961 allows the President to authorize the drawdown of DoD 
services and equipment to support other nations. In this case, funding 
would go toward providing airlift to allied countries supporting U.S. 
operations in Southwest Asia. This airlift would transport troops from 
Poland, Hungary, the Czech Republic, Senegal, Romania and Argentine to 
the Persian Gulf. The Air Force advises that the President has not yet 
signed the orders authorizing the use of drawdown authority. Has the 
President yet approved the requested drawdown authority?
    Answer. No.
    Question. Is $50 million a firm estimate of the support the US will 
provide?
    Answer. No, If Iraq complies with UN inspectors, and its WMD stocks 
are destroyed, the US may not need to increase military pressure. The 
foreign forces that have identified a need for US airlift are currently 
being held in country and will not be called into action unless the 
situation in the Gulf deteriorates. Our initial $50 million request for 
drawdown authority would have allowed the US to provide the airlift 
needed in that event. The amount requested was equivalent to that 
authorized in the Haiti emergency. We believe that amount was likely to 
be the maximum initially needed in the contingencies expected at the 
time; actual drawdowns under the authority would be less in more 
favorable contingencies.
    Question. What services do you anticipate that the Department will 
provide for this funding, and to what nations? Please be specific.
    Answer. The services fall into two categories: (1) Strategic 
airlift into and from theater. Some countries that have volunteered 
troop contributions do not have the airlift assets to self-deploy nor 
the financial resources to reimburse us for this service. This applies 
principally to East European partners, such as Czech Republic, Estonia, 
Lithuania and others. We are looking at ways to minimize the US burden 
in this regard, such as by utilizing transport aircraft offered by 
other countries such as Norway and Denmark. (2) Sustainment 
(consumables) in theater. Principal commodities include water, fuel, 
and rations. We hope to minimize these costs by persuading host nations 
(e.g., Kuwait) to provide these services as assistance in kind. All 
nations with air or ground contingents in theater will be in need of at 
least these three basic services.

    [Clerk's note.--End of questions submitted by Mr. Young.]


             DEPARTMENT OF DEFENSE APPROPRIATIONS FOR 1999

                              ----------                              

                                         Wednesday, March 18, 1998.

                    PERSONNEL QUALITY OF LIFE ISSUES

                               WITNESSES

ROBERT E. HALL, SERGEANT MAJOR OF THE ARMY, U.S. ARMY
JOHN HAGAN, MASTER CHIEF PETTY OFFICER OF THE NAVY, U.S. NAVY
LEWIS G. LEE, SERGEANT MAJOR OF THE MARINE CORPS, U.S. MARINE CORPS
ERIC W. BENKEN, CHIEF MASTER SERGEANT OF THE AIR FORCE, U.S. AIR FORCE

                              Introduction

    Mr. Young. The Committee will come to order. This morning's 
hearing will be in open session with the senior enlisted 
advisors from each of the services.
    We are very pleased to welcome Sergeant Major of the Army 
Robert E. Hall of the United States Army; Master Chief Petty 
Officer of the Navy, John Hagan--and, Chief, we understand that 
you are retiring next week after some 5\1/2\ years in this job 
and 30-some years in the service. Congratulations, and best 
wishes for whatever course your future takes. We have always 
been happy to have you here at this Committee.
    Also Sergeant Major Lewis G. Lee of the Marine Corps; and 
Chief Master Sergeant of the Air Force Eric W. Benken.
    Today's witnesses represent the 1.2 million enlisted 
personnel who comprise the vast majority of our military 
forces, in fact, over 84 percent of our active duty military. 
Both the Department of Defense and the Congress place a high 
priority on the quality of its men and women in uniform, and in 
achieving a decent quality of life for its service members and 
their families. Pay and compensation, health care, and 
personnel and operations tempo are a few of the many issues 
that are important to the military member and his or her 
family.
    We are pleased to see the President's budget proposes a 3.1 
percent pay increase. However, the Committee remains concerned 
about retention rates, continued temporary duty deployments, 
problems with medical treatment and access to care, and also 
the state of barracks and family housing.
    We are very concerned about stretching our military forces 
too thin. With the recent buildup of forces in Southwest Asia 
and the President's decision to extend the Bosnia mission 
beyond June of 1998, the Committee is concerned that this tempo 
of operations is impeding normal training and everyday 
operations.
    For example, the Army averages in a year more than 30,000 
soldiers deployed in over 70 countries; the Navy has over 150 
ships and submarines underway with approximately 60,000 sailors 
and Marines forward deployed; and the Air Force has 
approximately 15,000 troops deployed around the world. We are 
concerned that even though the military has done a superb job 
in sustaining high tempo operations over extended periods of 
time, that this pace just cannot be maintained.
    We are especially concerned about the following personnel 
issues and hope to discuss these and others with you today.
    First, the Department's ability to attract quality recruits 
to enter the military services and keeping them in the force;
    Second, the state of overall readiness, given the increase 
in personnel tempo and deployments overseas and the effect this 
has on morale, retention and success of the military mission;
    Third, the difficulty of providing a reasonable quality of 
life to service members and their families, given the amount of 
Defense resources available; and
    Finally, your observations regarding the availability and 
quality of health care, barracks and family housing for our 
young enlisted.
    Gentlemen, we have received and read your prepared 
statements and have placed them in the record, and we would ask 
you to summarize your statements for the Committee, and then we 
will have some interesting questions for you.
    Before we do that, I would like to yield to Mr. Dicks.
    Mr. Dicks. Thank you, Mr. Chairman. I want to welcome our 
witnesses today. We are looking forward to your testimony, and 
we appreciate the great leadership you provide in each of the 
services. Thank you.
    Mr. Young. Thank you, Mr. Dicks. Sergeant Major Hall, we 
are to hear from you first, sir.

                Summary Statement of Sergeant Major Hall

    Sergeant Major Hall. Mr. Chairman, distinguished members of 
the Committee, good morning. I am indeed honored and privileged 
to appear before you today to discuss quality-of-life issues 
and to speak on behalf of our Army, our soldiers, and their 
families.
    First of all, sir, I would just like to thank you for your 
continued interest and support. We very much appreciate 
everything you do to help us enhance the morale of our 
soldiers. They do remain very busy; deployments have not eased 
during the past year.
    Today, we have 100,000 soldiers forward stationed overseas 
and almost 33,000 more deployed away from their home stations 
in 81 countries. These soldiers are keeping the peace in 
Bosnia, deterring Iraqi aggression in Southwest Asia, as well 
as supporting local authorities, following hurricanes, floods, 
ice storms, and numerous other catastrophes. In fact, they have 
accomplished every mission this Nation has demanded of them in 
every part of the world.
    Sir, during the past five months--since I was appointed as 
the 11th Sergeant Major of the Army and indeed throughout my 30 
years in the service--I have talked to soldiers deploying, 
those preparing to deploy, those returning from deployment, or 
those just doing their job every day. I will tell you that 
these soldiers don't expect to become wealthy. They just want 
to ensure an adequate standard of living for themselves and for 
their families.
    They believe that their leadership is committed to 
providing them an adequate quality of life, and we as leaders 
know that the strength of our Army lies in the quality of our 
soldiers. They are first-class Americans, and we need them.
    I am heartened they have not lost the faith. They trust 
their Army, they trust their leaders, and they trust themselves 
to do what is right. But these soldiers do have concerns, and 
these concerns run the full spectrum of quality-of-life issues. 
In fact, if you asked me to list the top four concerns of my 
soldiers today, I would tell you that soldiers worry about pay 
and entitlements, housing, medical care for themselves, but 
especially for their families, and a stable retirement system.
    We know that we must take care of our soldiers. We also 
know that we need to take care of the families, because family 
members have a tremendous influence over a soldier's decision 
to leave or to stay in the Army. It really is true that we 
enlist a soldier, but we reenlist a family. We very much 
appreciate your help, and I ask for your continued assistance 
to provide for our Army and our soldiers.
    I am very proud to represent those young men and women. 
They are great soldiers; they are trained, and motivated; and 
they are dedicated to their country.
    Sir, let me just close by saying that I consider myself 
very lucky to have the honor and the privilege of representing 
my soldiers today, and I welcome your questions.
    [The statement of Sergeant Major Hall follows:]

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                          Remarks of Mr. Young

    Mr. Young. Sergeant Major, thank you very much. I wanted to 
make just a brief comment for all of you that the members of 
this Committee are quite aggressive in visiting our troops in 
the continental United States as well as overseas. I have to 
tell you that it is terribly impressive to visit with these 
young people and to see what they have to say about their 
mission, about their feeling of responsibility for the role 
that they play in that mission.
    Some of us just got back from Bosnia a few days ago, and a 
lot of them would rather be home, but they understand the 
importance of their being there. I have to tell you, this makes 
you really proud of all of these young men and women.
    I hope, if you get a chance, you will relay that to all of 
the members of your service to let them know how much we 
appreciate and admire and respect them.
    Master Chief Petty Officer Hagan, for your final appearance 
before this Committee, at least in this status, we are happy to 
hear from you at this time.

         Summary Statement of Master Chief Petty Officer Hagan

    Master Chief Petty Officer Hagan. Thank you very much, sir. 
Mr. Chairman, Members, I thank you for the privilege of 
appearing before you. I have enjoyed it and appreciated it over 
the 5\1/2\ years in the job, immensely.
    I must add, before I make my brief opening comments, that I 
appreciate in this particular subcommittee that the 
professional staff extends courtesies that are gratefully 
received; and I appreciate very much the staff prebriefing and 
all the help that I have always received in every trip over 
here, especially before this Committee.
    I believe strongly we can analytically prove your Navy is 
currently stronger than it ever has been. It is forward 
deployed, on station, expeditionary in the truest, purest sense 
of the word. Today, I hope that I will receive questions on the 
many issues that my anxieties for the future are centered 
around.


                           PAY AND ALLOWANCES


    I have a strong steady opinion on, for example, the flat 
pay raise proposal versus the traditional kind of a pay raise, 
and I hope that we can receive questions about that. I believe 
we need to implement the new pay chart developed by the Eighth 
QRMC, which eliminates pay inversion and rewards upward 
mobility more than longevity. I believe there are extremely 
important compensation issues facing the armed forces as a 
whole, and the Navy particularly.
    For example, sir, I have written into my submitted 
statement an opinion about the dramatic need to adjust career 
sea pay for inflation. This is a Navy-specific, Navy-unique 
issue, and it is going to be necessary to address it in the 
near term in order to meet retention and readiness issues.
    In the quality-of-life spectrum, we in the Navy must take 
better care of--and we need your help to do it the first-term 
junior Sailor who is required to live on the ship. They are 
unique in all the armed forces, and their quality of life has 
been neglected as we focused on the married issues, and perhaps 
rightly so, in years past, but their time has come and is 
overdue.


                          TEMPO OF OPERATIONS


    The overarching issue for me is OPTEMPO/PERSTEMPO, but I 
must emphasize I come to you with no complaints. The Navy is 
about deploying. It is why we exist. It is what we do, and 
sailors are proud of the sacrifices which accompany deploying. 
But deployment has a cost, and in my personal view that cost is 
rapidly escalating in the United States Navy.
    Sixty percent of the Navy on a given day is underway, 60 
percent of a smaller Navy. It approaches 60 percent, with 30 
percent of that number of ships forward deployed for 6-month 
deployments. Our OPTEMPO/PERSTEMPO parameters of 6-month 
deployments, a 2-to-1 turnaround ratio, and a certain number of 
days pierside in the inner deployment cycle is, in fact, the 
minimum which we must meet in order to be able to operate over 
the near term; and we are operating on the fringes of that 
minimum.
    The budgetary issues that I see my leadership striving to 
meet daily mean that parts dollars and training dollars and 
manpower dollars and so many other vitally important programs 
are competing for the same scarce dollars.


                                SUMMARY


    Today, though, I will conclude by telling you we are strong 
and ready, but there is a certain amount of can-do that is 
keeping us ready, a can-do that is always difficult, 
occasionally burdensome, and sometimes approaches the heroic, 
but it keeps us ready.
    I have some near-term retention anxieties, but I must 
return to the positive and conclude with a sincere statement of 
gratitude for the wisdom and foresight of this Congress in 
allowing us to downsize in a generous, even absolutely 
unexpected, wise way. We in the Navy made not one involuntary 
separation from the career force during that downsizing. While 
we were downsizing, a period of time that Sailors might have 
thoughtfully expected quality-of-life growth to stop and 
perhaps even to take premeditated cuts in those areas, we saw 
gains.
    I have to tell you I recognized that the entire time I have 
been in the job. I have been grateful for it every day. I am 
grateful for it today as I make my final appearance. And I look 
forward to responding to your questions, sir.
    Mr. Young. Master Chief, thank you very much. We appreciate 
your being here today. As I said, we wish you good luck in your 
future endeavors.
    [The statement of Master Chief Petty Officer Hagan 
follows:]

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    Mr. Young. Sergeant Major Lee, we will be happy to hear 
from you at this time, sir.

                Summary Statement of Sergeant Major Lee

    Sergeant Major Lee. Mr. Chairman and Committee members, I 
too want to express my gratitude for what you have provided to 
our servicemen in the past, and I know you will do your very 
best for them in the future.
    Today I have 23,000 Marines--23,400 actually--forward 
deployed. I want you to know those Marines are well-trained, 
well-led and well-equipped, and they are capable of doing 
whatever it is you need them to do.
    When they return, it is a little bit different. They will 
return from being deployed, and if they are married and have 
families, they will be with their families at night. But the 
requirements they will face in maintaining aging equipment will 
take away a lot of the time that you would think that someone 
returning from a deployment would have to spend with their 
families and friends. However, they will do what has to be 
done, and, for the most part, they will do it without 
complaining.


                        RECRUITING AND RETENTION


    We are a young, first-term organization. Of our fighting 
men and women, we have 107,902 that serve on one contract of 4 
years or less. We recruit about 40,000 men and women a year to 
come into our Marine Corps. I am proud to say we are meeting 
our numbers in both quality and quantity. It is a tremendous 
stress on the recruiting force that we have out there. We have 
among our very best Marines recruiting. They are doing what has 
to be done. It is getting tougher, but they are making their 
mission.
    I am proud to say that I don't have a retention problem. I 
credit that because of the way we are organized and the way we 
are structured. Again, I have a large availability of first-
term Marines. Many of them, of course, only want to do one term 
in the Marine Corps. Many of them can only do one term in the 
Marine Corps. Therefore, I have a unique situation, and I 
recognize that.
    Having said that, I am very proud of my small career force 
and the fact that they stay with us, deploy, work hard, do the 
things that have to be done to maintain our Corps as an 
institution and provide for the country. Again, they too do it 
for the most part without complaint.
    Echoing what the Master Chief was saying about the flat pay 
raise, I am particularly interested in the pay raise that all 
Marines receive. I appreciate any effort to help anybody, but I 
do not support any effort to help any one particular category 
of my enlisted force. I remind you again, that my Marines who 
serve the longest sacrifice the most over the longest period of 
time, and they deserve as much or more than those who only 
serve for a short period of time. That is my professional 
opinion.

                          TEMPO OF OPERATIONS

    Deployment and personnel tempo is not a problem for us. As 
the Master Chief said, we exist to be forward deployed; that is 
why we are, that is what we teach our people, and that is what 
we remind them of every time they raise their hands for four or 
five more years of service. We make sure they understand what 
the Marine Corps is, what our resources are, and they will 
continue to do what they had to do in the past, whether they be 
a lance corporal with two years of service, or a sergeant major 
like myself with 25 years of service.
    Again, they don't complain about that. That is what they 
sign on for.

                                SUMMARY

    I am going to close this out real fast, because I wanted to 
get to the questions and answers, by simply saying to you that 
we as an institution will do whatever has to be done, and we 
will maintain our readiness and capability on what this 
committee and Congress as a whole can provide to us. I 
guarantee you that.
    But we have needs above and beyond what is programmed for 
us in the upcoming year and, frankly, in the outyears also. I 
am sure you are already aware of this. I know my Commandant and 
the other people that come in here and testify can give you, 
and have given you, the details of what our needs are.
    But having said that, I want you all to understand that as 
a Corps of Marines and as an institution that does what has to 
be done for our country, we will. We will be ready, relevant 
and capable, regardless of the outcome of what the program is 
for 1999 or the future.
    Thank you, sir.
    Mr. Young. Sergeant Major, thank you very much.
    [The statement of Sergeant Major Lee follows:]

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    Mr. Young. Chief Master Sergeant Benken, we are happy to 
hear from you.

           Summary Statement of Chief Master Sergeant Benken

    Chief Master Sergeant Benken. Good morning, Mr. Chairman 
and distinguished Committee members. It is a pleasure for me to 
be here again to speak on behalf of the thousands of men and 
women, Guard, Reserve and Active Duty that serve our Air Force 
and our great Nation around the world.
    It was 28 years ago today that I joined the Air Force as an 
18-year-old without a clue as to what I wanted to do in life. 
Needless to say, I found a home in the Air Force. I found a 
great way of life. I found a place where one could succeed if 
you just applied yourself and were willing to work hard.
    It is with great pride that I am here today to say to you, 
we are the best Air Force in the world. We are best in terms of 
technology and best in terms of people. It is with your help 
that we have been able to become the best Air Force.
    Because we believe quality-of-life is directly tied to 
readiness, we believe the investment in our people is extremely 
important so that we can retain our highly skilled, technically 
competent personnel. But our readiness is beginning to diminish 
in some areas and our retention of second-term airmen, our 
bread and butter, has been declining over the past several 
years.
    There are many culprits: the endless rotations to the 
desert, the associated OPTEMPO with no end in sight, a robust 
economy and lucrative employment opportunities, the perception 
we have of an erosion of benefits associated with our changed 
retirement system and medical care delivery; and there is 
uncertainty caused by outsourcing and privatization.
    Loss of second-term airmen is costly. They are our 
frontline supervisors and trainers; they are the future Senior 
NCO leadership of our Air Force. I believe we owe it to those 
who serve our nation to keep their families in a secure home 
environment while they are deployed and ensure that they 
maintain a comparable standard of living. We must continue to 
pay attention to quality-of-life if we are going to continue to 
be the best Air Force in the world.
    We sincerely appreciate all of the past work of this 
Committee, and I look forward to addressing any concerns that 
you have.
    [The statement of Chief Master Sergeant Benken follows:]

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    Mr. Young. Gentleman, thank you very much. All of you have 
raised some interesting issues that we intend to inquire about 
more specifically, and for that purpose, I would like to yield 
first to Mr. Skeen for five minutes.

                  ENTITLEMENTS AND COMPENSATION ISSUES

    Mr. Skeen. Thank you, Mr. Chairman, and welcome, gentlemen. 
I think you represent the real fiber and major matrix of the 
entire armed services in the people that you represent; and I 
think we have some real serious problems that you are dealing 
with that we are trying to deal with too.
    First of all, I would like to just ask, is there a sense of 
total disaffection and disappointment in enlisted groups, what 
they were promised and what they actually receive? Is it 
reflected in the reenlistment rates and so forth?
    Also, the young people that you have coming in today, how 
do you rate their achievement as far as scholastics are 
concerned? Do they come to you with a pretty good background, 
or are they rather deficient and have to be made up?
    I know this is kind of a fly ball out in center field 
somewhere, but I would appreciate it if one of you could pick 
it up and fling it back.
    Sergeant Major Hall. Sir, that is okay. I will start this 
one off. In the Army, our midterm, soldiers--our staff 
sergeants who have been in the Army 8 to 10 years--are now 
coming to ask the question, ``Is it really worth it to stay in 
for a 20-year career?'' That is becoming more and more a 
question every place I go. The retirement system is the thing 
that bothers them.
    They certainly have concerns about medical care. They fully 
feel they were promised a lifetime of medical care. They have 
concerns about that; that is becoming more and more an issue. 
We are also working TRICARE. We are not yet there. But 
retirement is the main concern.
    I have to tell you, if you look at the statistics from 1992 
to 1997, there is a general downsloping of the percentage of 
satisfaction in military pay. But if you look at the 
satisfaction level for retirement it is in a free-fall.
    There are three different retirement systems. The ones we 
are trying to get to reenlist right now are in the least 
generous--and I even hesitate to use the term ``generous''--but 
they are in the least generous of the three different systems. 
That is becoming more and more important to them.
    Now, even with that, though, I still have to tell you, sir, 
they are staying, and they tell me they will continue to stay 
despite the deployments because they are proud of the job they 
are doing. They tell me they intend to stay with us as long as 
the family support activities stay at the level they are right 
now. Truthfully, I don't know if we can keep it at that level 
with our current funding. But soldiers tell me that they are 
okay with the deployments. They worry about the retirement, but 
they intend to stay as long as we keep the family support 
activities at the same level it is at right now. And the 
numbers really bear that out. We are reenlisting about 70 
percent of our midcareer force.
    Mr. Skeen. That is another part of the question I would 
like to have answered by each of the services, is the 
percentage of reups. But also there is a feeling of betrayal, I 
think. Some of the people we have talked with say they were 
promised something they are not getting.
    Sergeant Major Hall. I don't doubt that, sir, but they are 
not voting with their feet on that issue.
    Mr. Skeen. They are not voting with their feet, but they 
are certainly talking about it.
    Sergeant Major Hall. Yes, sir, they are certainly talking 
about it.
    If I could take the last part of your question very, very 
briefly; you asked about the young people coming in. We are 
okay with the young folks coming in. It is a different 
generation. Every generation has been different. I believe it 
is leadership at the lowest level that takes these great young 
men and women and makes them into great soldiers. So the better 
leadership we provide at the unit level, the better our 
soldiers will be.
    But they will do fine.
    Mr. Skeen. The system works?
    Sergeant Major Hall. The system works. We mirror society, 
sir. We get the best of our public education system coming into 
the Army today. The system--the leadership--will take care of 
them and move them into the next phase.
    Mr. Skeen. Thank you.
    Master Chief Petty Officer Hagan. Sir, I would expand on 
the Sergeant Major's answer without disagreeing with a word of 
it.
    The retirement system is probably the first of all, I will 
tell you that I would not buy into the words that you used, 
total dissatisfaction or alienation at all. There is a strong 
concern and it is centered around the fact that we are in a 
transition from the most generous retirement system to a less 
generous one, the 40 percent of your high-three average at 20 
years, when I stand in front of a group of sailors on a flight 
deck or hangar bay and explain in detail as succinctly as I can 
why this happened, how today we receive a living wage, the 50 
percent was based on what could only be called a stipend, how 
we preserve the 75 at 30 years, and part of the motivation is 
to have sailors serve longer than 20 years.
    Then when I add to that that we have made tremendous gains 
over the years in quality of life, compensation and 
entitlements, I get a degree of improvement in the attitude 
centered around the retirement system.
    But it does emphasize why it is so important for us to, in 
a priority way, meet some compensation needs. In the Navy it is 
career sea pay. Continuing the annual inflation-based pay 
raises in the realistic way we have done over the past six to 
ten years is absolutely essential. But meeting some needs like 
career sea pay, where the sailors that work the hardest, that 
sacrifice the most, that stay in the Navy to do that again, 
even after they know how hard it can be, that is very important 
to us.
    To take the second part, one other thing on the retirement 
system, I think it is important that we continue to study 
options, particularly cost-neutral options. The thrift savings 
plan, so long as it is not in any way deductive of or replaces 
any part of the current retirement plan, could evolve into an 
option, even a cost-neutral set of options, and could be very 
important to the retention of the force in the future.
    In regards to your question about what really is the 
quality of the young sailor, I have a slightly different 
answer, in that I am concerned about the young sailor today. 
The young recruit at Great Lakes is more difficult to train. 
Society and the culture are producing a different set of 
attitudes and, quite honestly, the physical pressures are 
continuously causing us to evaluate the length of time we can 
keep them in training. It gets back to training dollars.
    We need every day in the basic training pipeline. We need 
more. My counterpart, senior enlisted leaders, my group of 
peers, would like to have 30 percent more time in recruit 
training. We would like to see the continuing offensive on the 
dollars reduced. But that is important, and it is important 
because the young sailor today or the young recruit today 
provides some challenges for us in training.
    Are we satisfied with what we get when leadership impacts 
them? Yes, sir.
    Sergeant Major Lee. I will comment briefly. The 
disaffection among my career force in the Marine Corps, no, it 
is not there, sir. There are concerns about retirement plans, 
and there are concerns about medical support, present and 
future. But there is absolutely no disaffection among my 
Marines.
    The second part is, I personally do not consider the 
recruits we are bringing in today any better or worse than what 
we brought in in the past. We have always pulled from society 
what society provided.
    We put lots of effort into bringing in the best there is 
out there, and I believe we are. As a matter of fact, 
statistics don't lie, and I can prove we are. Then I believe, 
and the Marine Corps as an institution believes, you get the 
Marine in return dependent upon the effort and how you make a 
Marine out of them.
    So they are different, but then again, we were all 
``Generation X'' at one time, so we were all different. So I 
don't put them down. I consider them to be as good as we make 
them be, and we try very hard to make Marines out of them the 
right way.
    Chief Master Sergeant Benken. Sir, I will take the second 
part first, if it is okay.
    Mr. Skeen. Anyway that you would like.
    Chief Master Sergeant Benken. As far as the troops coming 
in today, I agree with the Marine Corps perspective; it is what 
you make of them. We have great troops that come in today, very 
intelligent. We are recruiting still 99.4 percent that have a 
high school education when they come to the Air Force, great 
people, and it is all in what you make of them, to be honest 
with you. Great skills, and they are doing good work for us.
    The second-termers I am concerned about, because we have a 
goal of trying to keep 75 percent of our second-term force. 
Since 1993, we have been on a downward slope. From about 81 
percent, we dropped as low as 69 percent last month. That 
concerns me.
    The skills that we are losing also concern me. The F-16 
avionics skill, the F-16 crew chiefs, some of the bomb loaders 
in some of those areas, some of the core defense areas we have, 
we are losing there.
    I have got about 266,000 people that are going to be making 
a reenlistment decision by the year 2001, and that concerns me. 
Retirement tie-in is an issue. The health care issues as they 
see it being kicked to the curb when you are 65 when you 
retire. Those are changing times. TRICARE is something we have 
to ``step up'' to. We don't have the capacity to take care of 
the millions of people that qualify for the military treatment 
facilities. So we are going to have to step up to that.
    The pay gap that has, because of statutory limitations on 
the pay, they perceive the 13 percent pay gap as an issue. So 
those kinds of things have a cumulative effect. On top of that, 
the OPTEMPO of going to the desert time after time, with no end 
in sight, that continues to be a millstone around their necks.
    So it is an accumulation of things, I think, and in looking 
into the future, the second-termers concern me.
    Mr. Young. Mr. Skeen, thank you very much. I think the 5-
minute rule is going to have to be extended.
    Mr. Skeen. I beg your pardon for running over my time, but 
I think--those elements were particularly important to me, 
because every discussion you have with those people today, they 
feel like they have been betrayed as far as what they were told 
they would receive as far as medical care, housing, some of the 
things like that.
    I think you have done a magnificent job of keeping the 
esprit de corps and the rest of the thing together. I credit 
you folks with that kind of ability.
    Sorry about the time.
    Mr. Young. That is okay. I understand with four witnesses 
responding to the questions, I don't think 5 minutes is 
adequate, and I am going to yield to Mr. Dicks now for 10 
minutes.
    Mr. Dicks. Well, let's see how we do, Mr. Chairman.
    Mr. Young. We will yield him more on the second round if he 
needs it.

                          NAVY CAREER SEA PAY

    Mr. Dicks. Master Chief Petty Officer Hagan, you mentioned 
the sea pay issue. Would you explain that a little bit?
    Master Chief Petty Officer Hagan. Yes, sir. In fact, I was 
just thinking as I thought about appearing before you today, to 
report to your wife, her ship is doing very well. I saw RANIER 
moored at North Island last week and talked to the Command 
Master Chief.
    Mr. Dicks. I will pass that along to her. She is very 
interested.
    Master Chief Petty Officer Hagan. Thank you, sir.
    Career sea pay is absolutely Navy-unique in that it is 
compensation provided for living and serving on a ship and can 
only be paid when you are living and serving on the ship. The 
squadrons that comprise the wing that go to the carrier don't 
get career sea pay until the day they embark, while they are 
living and sleeping on the ship.
    It was instituted in 1981. We built a case, and as all of 
us know, it is very difficult for a new entitlement that is 
service-specific, Navy in this case, to get through the Unified 
Legislative Budget or ULB.
    We built a case in the late 1970s and early 1980s that we 
could not man the all-volunteer force without recognizing the 
unique sea duty environment, living and serving on a ship. We 
have improved it a little bit, but there are physical limits to 
how much you can improve life on a ship, and we are up against 
those limits right now.
    Career sea pay has not been adjusted for inflation. It has 
been adjusted twice as far as the gates and the way we use it, 
but it has never been adjusted for inflation. It started out at 
$50 a month for an E-4. It is a career benefit, and so it is 
only paid to the E-4 and above level, and it goes up to a 
maximum of around $465 for an individual who has served in a 
more senior pay grade a longer time at sea.
    It has never been adjusted. It is necessary to adjust that 
in order for it to provide the retention and equity benefits 
that it was meant to provide.
    The time when we are going to have to face that is 
approaching rapidly, especially with the OPTEMPO and the 
PERSTEMPO being what they are. Some sailors' PERSTEMPO is 
astounding. I have given examples before in enclosures to my 
testimony, but in some cases a sailor may spend 25 or 30 days 
in home port in a full year, with much of that time deployed 
and much of it doing Shore Rotatons or SRA out of home port.
    So career sea pay becomes an issue of, again, paying those 
who work the hardest and sacrifice the most over the longest 
period of time more, and that makes it an equity issue. But it 
is, quite honestly, a Navy manning and retention issue, and the 
need to address it is just ahead of us with immediacy.
    I am putting it into my testimony, with a little bit of 
difficulty through the OMB process, because it is not in the 
President's budget and it isn't in the ULB, for reasons that I 
feel very strongly about.
    Mr. Dicks. You mentioned that the junior sailor lives on 
the ship, even when he is back in the home port, right?
    Master Chief Petty Officer Hagan. Yes, sir.
    Mr. Dicks. What are the problems associated with that?
    Master Chief Petty Officer Hagan. The E-5 and E-6 single 
BAQ was just achieved in the last three years. We got E-6 BAQ 
two years ago, E-5 BAQ a year ago. So part of the career force 
that is single now has some quality of life when they go 
afloat, because they can receive Basic Allowance for Housing, a 
BAH, and live ashore.
    The E-4 and below are statutorily deprived of that. The law 
states in essence that instead of getting a room in the 
barracks to any standard, whether it is a 2-plus-zero or a 1-
plus-1 or single room, instead of getting a room in the 
barracks or BAH to live ashore, you get a rack and a locker, 
and the locker has about 3\1/2\ cubic feet maximum, and that is 
the law.
    I don't have a quarrel with that. I don't come before this 
Committee or any other Committee asking for single BAH for E-4 
and below, but simply for a series of equity issues.
    Just as two quick examples, and there are a number of them, 
every Sailor that lives in the barracks has a washer and dryer 
available, usually on the same floor they live on, to do their 
civilian clothes and perhaps a kitchenette, et cetera.
    The sailors that live on the ship in berthing compartments 
that sometimes have 130 or 140 other individuals living in them 
do not have a free laundry, and we are in the process of trying 
to meet the physical demands of putting free laundry on the 
pier and then centering around that an oasis of healthy 
alternatives to some of the unhealthy liberties that young, 
single Sailors find attractive at that age group--voluntary 
education, off-duty voluntary education options; storage for 
their personal belongings--because they are more affluent than 
young single sailors were in the past, they do have possessions 
and hobbies; uses for their cars, long-term storage and short-
term auto needs. Those kind of things have a real price tag to 
them, and we are not budgeted for them.
    Just to add one other thing, the other branches of the 
armed forces, when the soldier, Marine and airman are back at 
base after their deployment, between deployments, they live in 
the barracks. Between deployments, E-4 and below will live in 
the berthing compartment, and providing for them is a unique 
Navy challenge.

                       GENDER INTEGRATED TRAINING

    Mr. Dicks. A more general question on the matter of 
training and gender-based training. The Kassebaum-Baker report, 
said we ought to have separate training, and now the Secretary 
of Defense says, no, we are not going to do that. What do you 
think the right way to train these new enlisted people is?
    Master Chief Petty Officer Hagan. I will start that real 
quick and yield to the Sergeant Major. I welcome the Kassebaum 
report. It is my opinion that the societal and cultural 
pressures are having an impact on our training, and I welcome 
every line of it. I think the Navy's response, which said that 
we can and will comply quickly with 25 of the 30 
recommendations, that two of them are not applicable, and that 
three, we want to comply with them partially, and one of those 
was a segregated berthing.
    I would rather follow the protocol we follow aboard the 
ships in training. Aboard ship we have segregated berthing and 
we have a protocol to enter that berthing. I think that we were 
evolving toward that rather rapidly without and before the 
Kassebaum-Baker report, and we continue in that direction.
    The Secretary's guidance gives us a little more impetus, 
but I feel strongly that the Kassebaum-Baker report has been 
and will continue to be good for the Navy and Navy training.
    Thank you, sir.
    Sergeant Major Hall. Sir, from my perspective, with regard 
to training and the Kassebaum-Baker report, I have got to tell 
you, I think we have it about right, and I think each of the 
services will also say that. And I think I say we have it about 
right because everybody talks about what a great job these 
soldiers are doing, what great young men and women they are, 
and how superbly they are going about accomplishing their 
mission.
    The one thing we have to keep in mind as we praise these 
young men and women--and they are doing superbly--is that they 
were all trained in a gender-integrated environment. We start 
the soldierization process the first day they put on a uniform 
and work them into teams and units. Now, they don't form teams 
when they get to their first units. So if you really believe 
they are doing a great job, and the Army is accomplishing its 
missions, I just ask you to remember that they indeed were 
trained in a gender-integrated environment.
    Sergeant Major Lee. On behalf of the Marine Corps, 
obviously we were pleased with the Kassebaum-Baker study. My 
only comment is, we want to continue very much to do it the way 
we currently are.
    Chief Master Sergeant Benken. Sir, we embraced a lot of the 
Kassebaum-Baker report as well, but you know, there was a day 
in the United States Air Force when the men went off to the 
firing range and the women went off to a makeup class. We don't 
do that anymore. Ninety-nine percent of our career fields are 
open to women; 24 percent of our recruits are female.
    We have to teach them how to train and fight together. The 
place to do that is basic training. It is not fair to kick the 
can down to the wing commander and have them try to teach them 
how to train and fight together. So I think our 21 years of 
success at gender-integrated training speaks for itself.
    Mr. Dicks. Thank you, Mr. Chairman.
    Mr. Young. I am going to yield next to the members in the 
order in which they arrived in the hearing room, since we are 
extending the time period. I would like to recognize Mr. 
Cunningham now.
    Mr. Cunningham. Thank you, Mr. Chairman.
    Mr. Young. You were the first one in the room this morning.

                         WOMEN IN THE MILITARY

    Mr. Cunningham. Thank you, Mr. Chairman. I am interested, I 
have had an opportunity to talk to all services--and I 
apologize, Sergeant Major, except for the Army women members of 
the service--and I have talked to the other three services, 
both enlisted and officers, and I asked them a question. I 
said, what about the political correctness in training?
    They seem to feel that the units--and I would like to get 
your response--really didn't pay a whole lot of attention, that 
the leadership let the rules be known and known well, but with 
all the operations tempo going on, they are just trying to get, 
like you say, the 1970s equipment up, they are working hard, 
they are away from their families. If they are separated for 
just that kind of training, it took away from the kinds of 
things they were trying to do, and it seemed to draw more 
emphasis and divisors. They said the margin for error they felt 
on political correctness was so small that in some cases troops 
were afraid to work with each other in some environments.
    I know when I had my squadron, one of the things I did, I 
never had separate meetings with E-5 women or E-4 women or 
officers. I always felt if you were an E-5, you met together, 
because that is where you trained together, and that was 
important, because I thought that that separation even divided 
the teamwork more. And I would be interested in your comments 
on that.
    They say, listen, women have been accepted into the 
services. The political correctness, they want to be 
recognized, but yet in many cases, it is driving them apart.
    Sergeant Major Hall. I think, sir, that first of all, it 
has been a very tough year for the Army. We had a situation 
where we had a leadership deficiency. Leadership broke at 
Aberdeen Proving Ground within that one battalion.
    Mr. Cunningham. That is key, the leadership.
    Sergeant Major Hall. That is right. That was a leadership 
failure. I don't know how else to describe it. It was a group 
of drill sergeants who willfully, knowingly, made a conscious 
decision to break the rules, regulations, and tradition of our 
service and the laws of the United States of America.
    I don't understand, quite frankly, how you make the leap 
from a leadership failure and criminal activity by leaders in 
Advanced Individual Training, or AIT, and apply that onto basic 
training. Basic training wasn't broken.
    Mr. Cunningham. You can't.
    Sergeant Major Hall. But the reaction from that throughout 
the Army, the fallout has caused some things to happen.
    First of all, I think drill sergeants thought that their 
leadership had lost faith and trust in them. That was never the 
issue. But it did cause some commanders at lower levels, 
perhaps, to rein back the authority of the noncommissioned 
officers.
    When you talk about, even at my level, noncommissioned 
officers and petty officers going about their duty, the only 
thing we have is our duty, responsibility, and authority. So 
when commanders pull back the authority of the drill sergeants 
or the noncommissioned officers, the tendency is to go soft, 
and we did in pockets. We went soft, and we didn't uphold the 
standard that was established. That is how we got into the 
situation we are in now.
    We have gone back and have told those noncommissioned 
officers, those leaders, You uphold the standards and you do it 
the right way, but you uphold the standards and you treat 
people with dignity and respect as you do it and we are going 
to be behind you all the way.
    Mr. Cunningham. I would say that the given must be that the 
leadership--let me interject before the others and give you a 
couple of ideas.
    We had a case of a young lady that was receiving obscene 
phone calls in our squadron. We used Ma Bell and I tracked the 
guy to an F-14 squadron, who she had turned down for a date. 
And we found out who the individual was. It just so happened 
that he was caught with marijuana at the same time.
    But we brought the gent before our female enlisted, the 
whole squadron in our offices and the quarters, and I had a 
captain's mast on that and we hauled him away in chains down to 
the brig. That showed the women that we are not going to 
support that thing. But we never had separate political 
correctness.
    The second thing that I did is they could walk through my 
office--and you probably disagree with this, but they could 
even walk by my command master chief if there was any known 
sexual harassment or if there was anything racial, if there was 
any child abuse, and there was five different things. And the 
leadership has got to be there.
    But say you have got good leadership, in even these 
squadrons the enlisted down below were saying that they are 
still afraid that the margin of error is driving them a little 
bit apart; that they want to be a part of the team but in some 
cases they are afraid of that because of other things that have 
happened. I think it is mainly leadership is the problem. It 
doesn't get down to the lower level.
    Sergeant Major Hall. Sir, you are absolutely right, there 
is no Army policy that causes that political correctness. There 
was never a ``more than a 3-second look'' rule as an Army 
policy. It happened as a reaction to Aberdeen Proving Grounds 
and other things.
    The only thing I can tell you, sir, is that I will be in 
here next year, and I am going to tell you that the Army is 
going to soldier through these problems that we have got now. 
The soldiers have not lost faith in the Army. They have not 
lost faith in their leadership, and they have not lost faith in 
themselves to be great soldiers. They will come together as a 
team. There is a perception of zero defect mentality and 
political correctness. That will go by the wayside.
    Mr. Cunningham. This is not just common to the military, it 
is in other civilian areas as well.
    Sergeant Major Hall. I think we have a better chance of 
getting by it than we do in the other areas.
    Mr. Cunningham. Thank you, Mr. Chairman.
    Mr. Young. Mr. Dixon.

                       DEMOGRAPHICS OF ENLISTEES

    Mr. Dixon. Thank you, Mr. Chairman. I would like to back up 
and pursue Mr. Skeen's line of questioning. Sergeant Hall, can 
you give me generally the profile of your typical recruit? 
Ethnicity, education, region of the country, any prior work 
experience.
    Sergeant Major Hall. Sir, to give you the level of detail 
that you need, I am going to have to take that for the record. 
They are generally just out of high school, limited work 
experience, and no full-time job before trying to find some 
direction in their life. And the recruiter sells them on the 
Army as a way for experience, work, and ethic--just sells them 
on it. Not just from a college dollar standpoint, but also on 
pride and patriotism, and they come in to serve. But to give 
you the level of detail, sir, if you will let me take that one 
for the record.
    [The information follows:]

    This answers those questions as well as provides the gender 
distribution. All summary statistics are based on regular Army 
accessions from fiscal year 1994 through fiscal year 1997.
    The ethnicity is explained as one of four categories. All 
accessions are categorized as African American, White, Hispanic, or 
Other (which would include Asians, Pacific Islanders, Native Americans, 
etc.). Anyone self-identifying as both Hispanic and another race is 
included in the Hispanic numbers only. During this time period, 
accession ethnicity was as follows:

                                                                 Percent
African American..................................................  22.9
Hispanic..........................................................   8.3
Other.............................................................   4.1
White.............................................................  64.7

    The educational qualifications of Army accessions are evaluated in 
two ways: (1) Does the accession possess a high school diploma, and (2) 
How did the accession perform on the aptitude test? The Army receives 
guidance from Congress on minimums, and the Army uses these minimums in 
the accession process. The current standards are: (1) At least 90 
percent of accessions will possess a high school diploma, (2) at least 
67 percent of accessions will score in the upper 50 percentile of the 
aptitude test, and (3) less than 2 percent of accessions will score in 
the bottom 30 percentile (category IV). During this time period, 
accession education level was as follows:

                                                                 Percent
High School Diploma Graduate (HSDG) only.......................... *87.5
HSDG and at least 15 hours college................................  *4.6
GED or home school education......................................   5.8
Upper 50 percentile of aptitude test..............................  69.0
Category IV on aptitude test......................................   1.7
---------------------------------------------------------------------------
*(These two categories total to 92.1 percent HSDG)
---------------------------------------------------------------------------
    In terms of gender, these accessions were 81.1 percent male, and 
18.9 percent female.
    The region of the country can be determined several ways. In this 
document, the Census Bureau's nine divisions were used. Accessions by 
division were as follows:

                                                                 Percent
New England.......................................................   3.5
Middle Atlantic...................................................  11.5
East North Central................................................  13.0
West North Central................................................   5.8
South Atlantic....................................................  23.1
East South Central................................................   7.0
West South Central................................................  14.4
Mountain..........................................................   7.0
Pacific...........................................................  12.7

    Responses to the Army Recruiting Command-sponsored New Recruit 
Survey (NRS) were used to answer the work experience question. The NRS 
is administered to a random sample of newly contracted applicants; some 
of whom may not access. There are two multiple choice questions 
answered by new recruits that can provide insight to this question: (1) 
This question establishes the new recruit's working/school attendance 
status prior to joining the Army, and (2) this question provides broad 
types of work. Of the new recruits that responded to these questions, 
top answers were as follows:

                                                                 Percent
I was working and going to school.................................  39.3
I was working full-time...........................................  23.8
I was attending school and not working............................  19.5
Service or restaurant worker......................................  21.6
Laborer...........................................................  12.1
Salesworker.......................................................  10.1

    Using the top answers from each topic in this document, the typical 
accession could be described as a White, non-Hispanic Male from the 
South Atlantic Census Bureau Division with a High School Diploma and 
above average aptitude. Prior to joining the Army, he more than likely 
worked in some type of service work and simultaneously attended school.

    Mr. Dixon. Do any of the services have a different profile 
than Sergeant Hall?
    Master Chief Petty Officer Hagan. I would just add 13 that 
the Navy has to 15 percent female and since we do recruit up to 
age 35, we have an element that is older, but it is essentially 
the same as described by the Sergeant Major.
    I would add one other thing that I notice in the Navy. The 
Navy has always had a large minority component and very often 
the minorities have been from other nations. As I travel the 
training world now, I am seeing more, and I will provide for 
the record the exact data, but I see more and more green card 
holders in our Navy from nations from Afghanistan to the 
Caribbean, South America and the Orient. And generally 
speaking, that is a neutral observation. They become good 
sailors. They are very often in the upper mental categories 
that we are trying to recruit. I will provide that and also add 
for the record greater detail.
    [The information follows:]

    The profile* of our typical Navy recruit is as follows:
    81% male
    98% non-prior service
    95% high school diploma graduate
    59% average AFQT score
    55% are caucasian, 20% black, 15% hispanic, 10% Asian-Pacific 
Islander
    16% are from the Northeast, 27% Southeast, 24% Central and 33% 
Western
    Top reasons for joining are: skill training, money for college and 
travel
    *Source: FY-98 Navy Recruiting Trends and Personnel Statistics 
Report

    Sergeant Major Lee. My average recruit is 18 years old, is 
a high school graduate, falls into the top level mental 
category, I to III alpha. I don't comment on minorities so 
much. We have, I would say, 40 percent minority recruits, 60 
percent the average white male. One out of 11 or one out of 12 
will be female. But that is our way we recruit and that is what 
we have to have, sir. Very good.
    Chief Master Sergeant Benken. Sir, we do about 30,000 a 
year accessions, 99 percent are high school graduates. About 24 
percent are female. Further demographics I will have to take 
for the record. Seventy-nine percent of the enlistees score in 
the top half of our qualification test. That is down from an 8-
year average of 83 percent, but it is above the DOD floor of 60 
percent.
    [The information follows:]

    A typical Air Force recruit is an unmarried twenty year-old high 
school graduate who scored in the top half of the Armed Forces 
Qualification Test. They hail from all regions of the United States in 
nearly equal percentages of the youth population and have little or no 
full time work experience. Seventeen percent are black and seven 
percent are of Hispanic Origin.

                         RECRUITING INCENTIVES

    Mr. Dixon. Have any of the services tried to identify what 
the incentive is for someone to enlist?
    Sergeant Major Hall. Sir, we have. The overriding reason 
that young recruits give is money for college fund. That is the 
majority. The other one is sort of a mix between pride and 
patriotism. It is reassuring to know that that is still alive 
and well. And also repayment of college loans.
    When we were short infantrymen last year we made a 
conscious effort--and we were short 5,000 infantry soldiers--we 
made a conscious effort to get those 5,000, and when we offered 
a reenlistment bonus, they came forward very quickly. So 
dollars is still a motivator but there are others.
    Mr. Dixon. So you don't have a lot of enlistees who say 
they want to make a career of the service going in?
    Sergeant Major Hall. Yes, sir, they will tell you that they 
want to make a career of it, but I don't think they know that 
they want to make a career if it. I think they are looking for 
a direction in their life and service is certainly, for the 
young folks that we are recruiting, a great thing. I don't know 
that in February of 1968, Bob Hall knew that he was going to 
stay in for 30 years and be the 11th Sergeant Major of the 
Army; and also, I will tell you that my drill sergeants 
probably didn't think I was going to stay in that long either.
    Mr. Dixon. Do many of the services have a different view? 
The Air Force or the Marines.?
    Sergeant Major Lee. Let me go, sir, because I think I may 
be opposite. We do not recruit based on any kind of enticement, 
sir, we really don't. We offer them a challenge. We tell them 
up front we are going to change their life. We beat them up 
pretty good when they are waiting to even go to boot camp. We 
separate them from the pool process if they don't maintain 
standards that we lay on them when they are in the pool. 
Enticements of monetary or those type of enticements are very, 
very negligible in our recruiting effort.
    Mr. Dixon. Would you say that the profile of your recruit 
is somewhat different than the other services?
    Sergeant Major Lee. Absolutely not, sir, because again over 
96 of mine are hard diploma holding high school graduates.
    Mr. Dixon. Are they more aggressive? Are they more 
patriotic? Is there more machoism involved?
    Sergeant Major Lee. That is what we use to entice them into 
the military. I wouldn't say that they are, but we generate 
that within them. Yes, sir.
    Chief Master Sergeant Benken. Sir, we do a survey. Normally 
when they come in they say they come in to get an education. I 
think that is true for most of them, but a lot of them just say 
that because it sounds a lot better than anything else they 
would say.
    But once they come in the service and they go through basic 
training and they are in there for a while and we do an exit 
survey and we ask them why they are in the military they say it 
is to serve their country. We are able to do a little bit of 
mind change in basic training. Patriotism comes forward.

                MILITARY OCCUPATIONAL SPECIALITIES (MOS)

    Mr. Dixon. What MOSs in the Army, Sergeant Hall, are hard 
to fill?
    Sergeant Major Hall. I don't think there are any that are 
hard to fill. We didn't get the infantrymen that we needed last 
year, but it was because we didn't put the push on it at the 
recruiting level and at the entrance processing stations.
    With the numbers that we have to recruit, we train more 
every year than the other three services combined. We put about 
110,000 through basic training each year. That is Active, 
Guard, and Reserve.
    The numbers that we get are such that at any one time we 
may be short, but over the period of a year we are fairly 
comfortable that we will be able to go get the right numbers, 
and the right quality in the MOSs. For some reason, that just 
dropped through the crack last year.
    Mr. Dixon. What about the other services?
    Master Chief Petty Officer Hagan. The critical ratings in 
the Navy, area challenge I cannot make the statement that the 
Sergeant Major did. We are continually challenged to fill the 
nuclear power quota for the five ratings that support nuclear 
power propulsion, the fire control technician, the advanced 
electronic technician, the advanced avionics technician, the 
gas turbine, the high-tech end of the spectrum that really does 
require a certain ASMAT score and a certain intellectual 
aptitude or upper mental category.
    We have to enlist those for six years because the training 
in some cases takes a full two years to complete, more than two 
years if you count how long it takes them to get completed with 
their watch stations on the ship or submarine. So those 
continually challenge us, and dollar per dollar per recruit 
they cost a great deal more, and I could provide for the record 
the exact dollar to recruit, and the other ratings are what we 
call ``general detailing''.
    Mr. Dixon. So one of the problems is that an enlistee, even 
if they have the aptitude, is not willing to commit six years 
to get the training?
    Master Chief Petty Officer Hagan. That is part of the 
problem, and another part is that the group that we need quite 
honestly has more options in life itself. My answer to the 
first question you asked would have been education broken down 
into College Fund and to get the training that we provide so 
they can go back out to the Navy. But an awful lot of people 
have more options than I did and my peer group did in 1965 when 
I came into the Navy.
    Mr. Dixon. Sergeant Major Lee?
    Sergeant Major Lee. Sir, I don't have a real difficult time 
filling my MOSs. An example of a very hard MOS to recruit to 
would be the 2600 types, the teletype and the intelligence and 
the intelligence communications.
    But our real problem, sir--and it is an internal management 
thing--is buying the school seats. We have to buy the school 
seats so far out. We will have the right Marine who can fill it 
and wants to do it but can't ship at the right time. But that 
is an internal management problem. So no, I don't. And what 
problems I do have are internal management.
    Chief Master Sergeant Benken. Sir, I would say it is combat 
control and pararescue, the physical demands that are 
associated with that. We don't spend a lot of money on 
recruiting--on recruiting dollars and things like that. Our 
issue is the training that we have to do the skills. Our 
weapons systems are much more complex than they used to be.
    When I came in the service in 1970 as an Information 
manager, my top line equipment was the Underwood 5 manual 
typewriter. There is not a lot of learning curve associated 
with an Underwood 5 manual typewriter. Today when we bring a 
young person in, they have to learn LAN administration and the 
complexities of computer operations, satellite technology and 
those kinds of things. So it is important that we recruit 
people with a high level of intelligence, and more importantly, 
it is important after we spend all the money on training them 
that we keep them.

                        CITIZENSHIP REQUIREMENTS

    Mr. Dixon. If I could just pursue one other question here, 
there is no requirement in the service that you are a U.S. 
citizen?
    Master Chief Petty Officer Hagan. There is a requirement in 
the Navy to be a U.S. citizen and it is a problem for us, quite 
honestly, that is increasing in dimension right now because of 
what I told you earlier. There is a requirement to be a U.S. 
citizen in order to be in certain skill fields in the career 
force, and sometimes it doesn't always relate to national 
security as directly as other times. A cryptologist, for 
example, must be a citizen to go to A school; but also a 
journalist; any Sailor serving in the engineering department of 
a nuclear powered ship, and I believe, in fact, the rule is 
still being enforced that any sailor on a nuclear powered ship 
must be a U.S. citizen. So green card holders and foreign 
nationals that qualify to be sailors that don't become citizens 
quickly, and the process is not quick under most circumstances, 
do have limitations placed on them, sir.
    Sergeant Major Hall. It is not a problem in the Army.
    Mr. Dixon. You will take people with green cards? You will 
not?
    Sergeant Major Hall. We will take them with green cards.
    Chief Master Sergeant Benken. Sir, the issue becomes they 
cannot hold a security clearance and can't deploy, things like 
that. We extend them, and once they get through their first 
term we try to get them through the process as fast as they 
can. So we will extend them six months at a time, but really I 
think that process needs to be speeded up somewhat through the 
INS.
    Mr. Dixon. Thank you, Mr. Chairman.
    Mr. Young. Mr. Bonilla.

                             PAY RAISE GAP

    Mr. Bonilla. Thank you, Mr. Chairman. Sergeant Major Hall, 
I was reading your testimony and looking at the disposable 
income that some of the enlistees have after paying their 
bills, and it is a pretty sad state of affairs. And I know this 
Committee tries to do all we can to give you the resources you 
need to keep your people operating efficiently, but I am very 
concerned about the commitment of the Administration on these 
quality of life issues. And I know--I am not going to ask you 
to respond at this particular point, but tell me what would it 
take--we are talking about two, three percent raises over last 
year and maybe this year another three percent. That really 
doesn't amount to much.
    Tell me realistically, if we could wave a magic wand and 
say this would actually be an adequate pay raise--I know they 
are not in there to get rich, and I am delighted to hear about 
the patriotic motives behind a lot of our folks in the armed 
forces, but what would be a realistic pay raise that would 
provide some of these folks some adequate discretionary income 
at the end of the month?
    Sergeant Major Hall. Sir, that is actually a real life 
story. That is not typical, but it did happen with the $17 of 
disposable income. If I had a magic wand I would say to give 
you an answer right now--I would say give us 14 percent, which 
is the pay comparability gap. Because of the way our pay raises 
have been computed over the years, the employment cost index 
minus one-half percent, our soldiers are behind the civilian 
community. My magic wand says 14 percent across-the-board.
    Mr. Bonilla. Would anyone else like to comment on that?
    Master Chief Petty Officer Hagan. Yes, sir, I will be happy 
to hold that wand for just a moment. I would like to see us 
implement the pay chart that the 8th Quadrennial Review of 
Military Compensation, or QRMC developed, which is more 
sensible. There is a small dollar figure plus-up required to do 
that, and it grandfathers everyone so no one loses pay.
    I would like to see us adjust the threshold for CONUS COLA. 
It is an important compensation issue that currently doesn't 
solve any problems because the threshold is set at 8.5 percent. 
I do not have much of an argument with the proposal.
    I like the proposal that I have heard attributed to 
Congressman Watts from Oklahoma, to do five years worth of 
inflation plus pay raises in order to close the gap. But I 
think--and I feel strongly about this--it must be combined with 
an effort to adjust pays within the force, such as career sea 
pay that I have mentioned twice already and other specialty 
pays, so that those who work the hardest and sacrifice the most 
and over the course of a career really pay more dues really get 
compensated more. Those things would be a total solution, in my 
view.
    Mr. Bonilla. Sergeant Major Lee, would you like to comment 
on a figure, since we are talking about a magic wand here?
    Sergeant Major Lee. Mr. Bonilla, I would prefer to take it 
for the record, except to say I absolutely support what my two 
counterparts have said. The 14 percent would be a great start. 
The five year cost plus would be a great start.
    [The information follows:]

    A pay raise would have to do two things to be considered 
adequate; first, it would have to provide some reasonable level 
of disposable income for all Marines with families. Second, it 
would have to be sufficient to encourage the level of retention 
necessary to sustain our career force. Completely closing the 
pay gap would undoubtedly accomplish both of these objectives. 
To be truly effective, the pay gap should be closed quickly 
rather than gradually. While a gradual approach would obviously 
help in the long run, we also have immediate concerns, such as 
the ones you have mentioned, that require immediate attention. 
It would be a tremendous gesture on the part of our Nation to 
officially and unambiguously eliminate the discrepancy between 
military and civilian pay. Of course, that gesture must be 
followed up with annual pay raises that rise with the ECI, not 
\1/2\ percent (or any other arbitrary amount) below it. I 
recognize that a 14 percent pay raise would be expensive, but 
continuing with the current pay gap solidifies the perception 
that military pay is neither fair nor equitable. I favor the 
quick approach to closing the pay gap because of the tremendous 
impact it would have on morale throughout the Services. I can 
assure you, Marines are not in it for the money. But, as with 
life's other difficult vocations--not being burdened with the 
exceedingly frustrating distraction of inadequate pay frees a 
Marine to be totally dedicated to the task at hand.

    Chief Master Sergeant Benken. Sir, I think we need to close 
the gap. I don't know if 14 percent is realistic, but I think 
the Employment Cost Index, or ECI formula that they use is 
wrong and we need to get out a statutory way to do that, close 
that gap for the future. That is what creates this pay gap 
problem that we have now.

                      MORALE OF MILITARY PERSONNEL

    Mr. Bonilla. I appreciate your comments on that, because I 
have been on kind of a tear lately about not paying attention 
to these kinds of needs, whether it is pay or health care or 
overdeployment and putting off important decisions, to raise 
the profile of those problems versus some of the things we are 
doing around the world that pile on some of these problems like 
the overdeployment, which is what I would like to talk about 
next.
    I was reading your testimony, Sergeant Major Hall, that 
many of the staff sergeants who generally have been in the Army 
ten years and are at the decision point of making it a career 
or not tell you that they do not mind the deployments, and I 
appreciate that statement. But are we near the point, because 
when I visited with some of the enlistees, they are telling me 
it is a real problem. I visited with one in Bosnia a few days 
ago that gave me a heart-wrenching story about how his wife is 
finally going to leave him because he has deployed too many 
months over the last several years. Even though this might be 
the current state of affairs and they do not mind the 
deployments, are we close to the point where people are going 
to say maybe my patriotic spirit and my commitment to service 
in the military is going to be raised into question? A person 
can only put up with so much.
    Sergeant Major Hall. I think, sir, that we are okay with 
our current state of affairs as long as we keep the budget 
where it is. I worry quite frankly, that in the fourth quarter 
we are going to run out of money. We are trying to balance 
modernization, readiness, and quality of life. When you run out 
of quality of life dollars and things start dropping, then the 
pressure back home when you come back from deployment does get 
too tough, and they are going to have to make a choice between 
families and the Army. And for some of them, we know which way 
they are going to go on that one.
    I think the Noncommissioned Officer Corps in the United 
States Army can handle what is on the platter right now. It is 
not a plate, it is a platter. We can handle what is on the 
platter right now but if you asked us to do anything else, the 
question we have to ask is, ``what do we take off?'' We cannot 
do more with what we have right now.
    I don't know how else to answer you, sir, than to tell you 
that we believe, and I believe, that the noncommissioned 
officers have demonstrated that we can do what we have to do 
right now, but if you levy anything else on us, something else 
has to come off.
    Mr. Bonilla. I admire the commitment of all of you for 
doing all you can, sometimes with others trying to tie one hand 
behind your back, and you still operate with the greatest 
attitude and confidence and you make us proud. But I am so 
concerned that the average person out there, not to mention the 
folks that are sometimes giving us budget numbers from the 
administration, that there is not a concern and an 
understanding.
    People out there think that our military is in the same 
condition that they were during Operation Desert Storm, and 
somehow most people think that was a TV war. They don't 
understand a lot of realities of what you all faced. And now in 
this day and age with the situation that arose in Iraq and is 
still pending, I don't think a lot of people understand--I 
think they are going to get a big dose of reality if we have to 
engage in a real conflict, not just peacekeeping; that at some 
point American people are going to say: What has happened over 
the last few years? Why have we suffered so much in terms of 
quality of life that may be damaging morale, and are we getting 
the same quality of person to serve our country as we have in 
past years?
    It is going to be an eye opener at some point and people 
are going to think, how did we let this happen? I guess I am 
kind of making a speech here, but it is a concern I have.
    Chief Master Sergeant Benken. From an Air Force perspective 
we have had to come to grips with the fact that we are more of 
an air expeditionary force. With the downsizing of the military 
that began in 1990, we no longer have the forward presence that 
we used to have overseas.
    And it used to be if you deployed over there a lot of the 
support structure was there to kind of help out, but we don't 
have that anymore. So we have become, you know, what we call 
sometimes an Air Force at sea. So we have the forward deployed 
folks who are kind of running at high RPM, and we also have the 
folks back home who are running at high RPM because the support 
structure has gone with that unit to do the things overseas.
    So we are busier than we have ever been and we have a lot 
of taskings around the world. I would say that we are--just 
because we can have great people and, you know, solid 
leadership, that keeps them going a lot of times, but we are 
starting to have some fraying around the edges. And that is why 
we are here, to call attention to that and say, hey, look, in 
the future we need to take care of some of these things or we 
are going to have bigger problems.
    Sergeant Major Lee. Let me briefly comment. You are right 
on target for part of it, but I do want to comment on the 
deployment aspect of my career force. And again I ask you to 
remember that my force is small and my Marines who stay with me 
20, 30 years know that is what we are going to continue to do. 
When they reenlist, they know what we are going to do. When 
they marry into a family, that family is quickly indoctrinated 
into what we are going to do. Their husband or wife is going to 
deploy. That is what we do and they understand that.
    What you said, though, you are absolutely correct. When my 
Marines return from deployment, because of our inability to 
adequately modernize, bring equipment, major equipment up on 
line, refurbish them and rebuild them--not so much buy new 
stuff but rehab what we have got--when they come off of those 
deployments, they should expect a reasonable quality of life 
per the amount of time they could spend with their families or 
spend on liberty or leave, and that isn't there.
    They come off of this six month deployment and they go into 
what we call a trough or a bathtub. And where they used to go a 
little bit and start building back up for the next deployment a 
year later or 18 months later, they go into it much, much 
deeper now because they have to spend more time working on 
aging gear, spare parts that maybe don't even exist, equipment 
lines and logistics lines that are closed down because the gear 
that you own is so old that you have to fabricate, things like 
that. That is what has hurt us. In that regard you are 
absolutely right.
    But the deployment aspect and the deployment tempo is not a 
problem for the Marine Corps, sir. That is not. It is between 
deployments that is hurting the morale and the welfare of our 
people.
    Master Chief Petty Officer Hagan. I would just add for the 
Navy, adding to my opening statement, as long as we are the 
expeditionary force that remains forward deployed, it has been 
the case in my 30 years in the Navy and I expect it will be 
into the future, as long as we are that kind of a force, we are 
going to have spouses, wives leaving their husbands because of 
that, or alleging it is because of that.
    That is one of the unfortunate prices of doing business. 
That kind of anecdotal data, though, is valuable on the whole. 
Right now my biggest worry is that we as a smaller Navy cannot 
do everything we did as a larger Navy. We are sending smaller 
battle groups, more creatively tailored and the like, turning 
them around quicker. As quickly, and I repeat, the battle 
groups are being turned around as quickly as it is possible to 
do unless there was a genuine--the health of this Nation is 
threatened. The 12 months, we have been running like that for 
the entire five years that I have been in this job.
    We now recognize 2 to 1 as the turnaround ratio we don't 
want to compromise. I remember the day when we recognized 3 to 
1. We don't even refer to that 3 to 1 as attainable in the near 
or distant future. So you were right on target with your 
concerns. They are my anxieties about what a continuing OPTEMPO 
like this will do to retention and recruiting.
    Mr. Bonilla. The closing comment I have is, if you sat in 
my seat or in the seats of some of the other members here, it 
is very frustrating when we are again getting proposals for 2 
and 3 percent pay raises, and on other subcommittees we are 
getting proposals for 100 to 200 percent increases on some what 
I call bogus programs such as antismoking initiatives and 
things like that, where there are already plenty of laws on the 
books in many states all over the country. This happens because 
they sound politically correct and they make headlines on the 
news each night.
    If there was a proposal to give a 14 percent pay raise to 
our troops, I don't know if it would make the first segment of 
Dan Rather's news. But if there is a proposal that gives a 100 
or 200 percent increase on an anti-smoking initiative, bogus or 
not, that would certainly make that. That is a problem we deal 
with all the time. That is not--well, it is your problem, but 
it is the situation we face ourselves with every day. I thank 
you for your time.

                   FUNDING FOR CONTINGENCY OPERATIONS

    Mr. Young. I would like to go back to something you said, 
Sergeant Major Hall, about running out of money in the fourth 
quarter. For fiscal year 1998, when we marked up the bill last 
year, we increased substantially billions of dollars over the 
President's budget request. When we finalized the bill in 
conference with the other body, we were nearly $4 billion over 
the President's budget.
    If you are running out of money in the fourth quarter, if 
we hadn't increased the budget you would have been running out 
of money in the third quarter. Is that a fair assessment?
    Sergeant Major Hall. Sir, I am certainly not an expert on 
budget. It sure sounds like common sense to me. I say we will 
run out of money in the fourth quarter, and I think that is 
potentially true. There are some things that you are going to 
do to help us on that: the supplemental and other things. If we 
do not get the supplemental without offsets, I think the danger 
is very real that we are going to run out of money in the 
fourth quarter.
    I think even with the fine balance that we have got today, 
in order to make it, commanders only have the money that they 
need in the base operations arena to fix the things that are 
broken. So it is later on in the training year, as other 
contingencies come up, that it comes naturally out of our 
pockets. As money gets migrated from one account to the other, 
it is the quality of life arena, in my view, that will probably 
suffer the most. And that is the one area except combat, that 
most affects the soldiers.
    Mr. Young. So basically what you are talking about relative 
to the fourth quarter is the spending on the contingencies?
    Sergeant Major Hall. Yes, sir.
    Mr. Young. And the need for the supplemental.
    Sergeant Major Hall. And my plea for you not to do the 
supplemental with offsets.

                   QUALITY OF LIFE FOR NAVY PERSONNEL

    Mr. Young. You will be happy to know that this Committee 
reported our part of the supplemental, the Defense part of the 
supplemental, without offsets last week. We go to the Full 
Committee on Tuesday of next week. We are not sure what will 
happen. But we will hold fast to our position that we just 
can't offset this $2.3 billion out of the Army, Navy, Marine 
Corps and Air Force, and see how much luck we have with that.
    Master Chief, you mentioned--I wrote this down because it 
struck me, and this Committee is very concerned about quality 
of life. And I hope you all believe that because we really are. 
You said in the Navy the quality of life has been neglected. 
Give us some specifics.
    Master Chief Petty Officer Hagan. Well, sir, I specifically 
said that the quality of life of the young single Sailor who 
lives on the ship is who I referred to as having been neglected 
too long. I must go back and, before I amplify that, and tell 
you that not only do I believe that this Committee is 
interested in the quality of life, I have been the beneficiary, 
along with 400,000 other sailors who are serving today. I stand 
before groups of sailors all over the world and talk about the 
quality of life gains, and I articulate them and I try to list 
them and quantify them in ways that sometimes open their eyes.
    We have made great gains. We are going to hold what we have 
got and incrementally add to it. But the incremental addition I 
would like to make that is the highest priority is to pay some 
attention and put some money against the quality of life of the 
young single Sailor that lives in the ship in home port, very 
often lives in an industrial environment.
    Your Committee or one of the Committees' delegations was 
recently out on the CONSTELLATION in North Island and the 
CONSTELLATION was in SRA or Selected Restricted Availability. 
You couldn't have picked a better place to go. During a refit 
period when you are living in an industrial environment, it is 
not just a 130-person compartment now, it is a 130-person 
compartment that is surrounded by industrial activity. And 
quite often it is environmentally shaky to even live there, and 
we move off the ship at great expense and with logistic 
problems.
    Those young sailors that live there constantly, because 
they have no other options, have been neglected. Now is that 
the Navy's fault? Possibly, to some degree. But the dollars 
that we compete to get and the priorities we have to respond 
to, there just simply has never been enough money. Now we are 
trying to make some obligations and keep those for those young 
sailors and put an infrastructure in place.
    For instance, where the CONSTELLATION and two other 
carriers will soon moor at North Island; and we are trying to 
put an infrastructure of what we are calling learning centers, 
recreation centers and fitness centers dedicated to those 
carriers along those piers. It is expensive and it has never 
been done before. If we are not adequately funded and 
recognized for that unique need--and it is unique among the 
other services--if we are not funded with recognition for that 
unique Navy need, we will not be able to do it and we will 
continue to neglect them.

                      HEALTH CARE AND OTHER ISSUES

    Mr. Young. I had planned to let each of the Members have 
another opportunity to talk with you, but now you have heard 
those buzzers. That means we have a series of votes on the 
floor, so it won't be a case of leaving here and voting and 
coming back.
    So what I would like to do is to use the balance of my time 
and ask all of you if there are any closing comments that you 
would like to make on a subject that we maybe didn't inquire 
about or something you thought about since your opening 
statement. Sergeant Hall, we will start with you.
    Sergeant Major Hall. Sir, I am the rookie at this table 
today, so I have to tell you that I am seriously pleased with 
the questioning. I think we have covered everything that I 
wanted to cover, because we have talked about pay and 
entitlements, and we talked housing a little bit. We also 
talked about a stable retirement system.
    I think the one issue that we didn't talk about is medical 
care. I think this is a tremendous challenge. My people say 
that this is a tremendous problem today. TRICARE works, 
depending on where you are at. If you are close to a medical 
treatment facility; it works very well. For soldiers who are 
stationed away from a post, camp or installation, it works less 
well.
    And by the way, if you have to use a doctor on the economy, 
it is a $12 copayment. To that private first class at Fort Hood 
Texas, $12 eats up a significant part of your disposable 
income. It is not a universal health benefit. It depends on 
where you are stationed at any one time. They are working it 
very hard, but there are still too many things to be worked.
    The issues to be resolved now are; getting the people in 
remote locations into TRICARE. That is working. How do you meet 
the standards of access, getting in to see a doctor or a 
specialist. That is working. How do you get reimbursed for 
claims? More and more doctors will accept TRICARE, but they 
don't want to wait to be paid; they want the soldier to pay up 
front and then be reimbursed. That is working.
    I would tell you, sir, that working out those details is 
too many things for soldiers to believe TRICARE to be a 
universal benefit. We need to push that process forward as fast 
as we can. And that is a joint action. It is a partnership 
between the military services and Congress to make that go 
forward.
    Mr. Young. We only have a few minutes left before we have 
to go for this vote, but my line of questioning was going to be 
on the subject of medical care. This Committee has spent a lot 
of time meeting with the Surgeons General and Dr. Martin and 
others in the system. So we are going to submit those questions 
to you in writing and ask that you respond, because this is a 
very important issue to all of us and I know that it is to the 
members of your services.
    Master Chief Petty Officer Hagan, any closing comments?
    Master Chief Petty Officer Hagan. In the interest of 
brevity I will tell you that I echo the Sergeant Major's 
concern about our TRICARE benefit, the medical benefit for the 
families. It is pretty high on many sailors' list.
    My concern is different. I believe the $6 copayment for the 
E4 and below, the $12 copayment for E5 and above, the $12 a day 
outpatient, the no annual deductible and the reasonable 
catastrophic cap is a very good core benefit. But the length of 
time it is taking to put the network into place and my fears 
that we cannot preserve that low cost core benefit are on my 
short list of concerns that didn't get discussed today, sir.
    Mr. Young. Thank you. Sergeant Major Lee.

                       GENDER INTEGRATED TRAINING

    Sergeant Major Lee. Quickly, I want to echo what my two 
counterparts said previously. I didn't want to talk about this 
but I am going to bring it up, since the issue was raised and I 
did not comment. That is the gender issue.
    Briefly, sir, in my simple way of thinking it would be 
easier to make a Marine Corps change than the other services, 
and obviously the Marine Corps doesn't have a concern about the 
way the other services train gender-wise. We want to be left to 
our own accord and we believe that we are doing it that way.
    I want to say something, that there is a catch phrase that 
concerns me because the catch phrase makes a lot of sense but 
it doesn't make sense for the Marine Corps: i.e., we train as 
we fight. I am going to tell you now, in the Marine Corps we do 
train as we fight, but not in boot camp. We make a basic marine 
in boot camp. That is all. And that Marine who leaves boot camp 
frankly is not a warrior and they will not go into any 
organization to start fighting.
    Following boot camp, we make them into a warrior. We train 
them in the skills of combat, either advanced skills, 
rudimentary skills, and then after they have followed on their 
training and gained their pure MOS qualification, then we put 
them into the unit where they will train as they fight. Until 
that time in the Marine Corps, we do not train as we fight in 
boot camp or even the follow-on training. I wanted to make that 
clear.
    Mr. Young. Thank you. Chief Master Sergeant Benken?
    Chief Master Sergeant Benken. Sir. Like anyone else we are 
competing for America's best out there, and in a smaller force 
every individual counts. And all the issues that we talked 
about today are important to our recruiting effort and our 
retention effort, and I would like to say that we need your 
help in making sure that we continue that.
    Mr. Young. I want to thank all of you for being here today 
and for your very forthright responses to our questions. We are 
here to serve those who serve in the military and do the best 
we can to make sure their quality of life is as good as we can 
make it.
    This Committee is adjourned. We will reconvene at 1:30 p.m. 
in a closed session with the Vice Chiefs of the Services, and 
the topic will be the readiness of our forces. The Committee is 
adjourned.
    [Clerk's note.--Questions submitted by Mr. Young and the 
answers thereto follow:]

                        Other Support Activities

    Question. The downsizing of the military affects not only end 
strength and force structure, but also other support functions located 
on military installations that might close due to Base Realignment and 
Closure (BRAC); such as MWR facilities, hospitals, exchanges and 
commissaries.
    Clearly, these support activities are important to a member and his 
family's quality of life and enhances his standard of living while in 
the military.
    Gentlemen, is the Department of Defense presently considering any 
significant changes to commissary or exchange operations in order to 
reduce costs?
    Army Answer. Under a plan to reduce costs on installations that 
maintain a small commissary and exchange or where a larger commissary 
or exchange is only a short distance from an installation that 
maintains a small commissary and exchange, a program known as 
``Hybrids'' is being evaluated. The hybrid program would combine 
commissaries and exchanges into one store. Grocery prices would remain 
at commissary prices, and exchange items would remain under the Morale 
Welfare and Recreation (MWR) umbrella. The intent is not to erode the 
benefit of groceries at cost plus five percent surcharge. Also, there 
is a Joint Exchange Due Diligence Study about to get under way; the 
contract should be let in April. The objective of the study is to 
determine the most efficient and cost effective way to organize and 
operate our services exchanges in order to meet service-unique needs, 
maintain good customer service, ensure competitive pricing, and 
continue support for MWR.
    Navy Answer. Both the exchange services and the Defense Commissary 
Agency (DeCA) constantly seek ways to reduce costs. While I know of no 
significant initiative underway to reduce commissary costs, cost-
savings initiatives in daily operation of the Commissaries are on-going 
under DeCA oversight. However, there is no dramatic restructuring move 
or policy shift which will significantly reduce costs. On the exchange 
side, the Services plan to start a study in April to examine the most 
efficient and effective way to organize the exchanges. While there are 
no preconceived conclusions, this study should determine if savings can 
be achieved by integrating the exchanges.
    Marine Corps Answer. The Marine Corps is currently participating in 
two major Department of Defense (DoD) initiatives dealing with exchange 
operations. The first is the ``due diligence'' review. We support the 
objectives of the ongoing ``due diligence'' study--to identify the most 
efficient and cost-effective way to organize and operate the services 
exchanges in order to maintain good customer service, ensure 
competitive pricing, continue strong financial support for MWR and meet 
service-unique needs.
    The Marine Corps is also a participant in the devolvement of 
Defense Commissary Agency (DeCA) funding and operational control to the 
service secretaries, as part of the Defense Reform Initiative (DRI). 
The Marine Corps supports the concept of DeCA devolvement, devolving 
day to day supervision of DeCA to the secretaries of the military 
departments under the leadership of an effective board of directors 
with membership from all the services. Giving the services better 
control of this vital benefit should, in the long run, provide better 
service for the service member.
    Air Force Answer. We are not aware of any significant OSD proposals 
that would result in reduced costs for the commissary. OSD's planned 
devolvement of the supervision over day-to-day commissary operations 
does not claim any cost savings. The Exchanges are participating in a 
due diligence study of possible consolidation of business processes; 
however, we do not expect them to implement any of the possible changes 
unless the changes will produce cost savings.
    Question. Will you explain how a reduction in the commissary 
subsidy would effect the enlisted personnel in the military Services?
    Army Answer. A reduction in the commissary subsidy would affect not 
only enlisted personnel but all service members and their families. The 
greatest non-pay benefit would be eroded. The surcharge rate would have 
to be raised in order for commissaries to continue operations. To 
stretch the available resources, operating hours would be reduced and 
some stores closed. This means soldiers would have to either drive 
longer distances to take advantage of a commissary or shop at local 
supermarkets. Because the leadership considers this non-pay benefit so 
valuable, reprogramming dollars into the commissary account from 
readiness programs or other quality of life programs to maintain the 
current standard could occur, further stressing readiness and quality 
of life funding.
    Navy Answer. The cost of the commissary is borne either by the 
taxpayer (through the subsidy) or the user (through the surcharge). A 
reduction in the taxpayer subsidy will be borne by our enlisted members 
in one of two ways: either out of their pockets because of a surcharge 
increase; or by having some of their commissaries closed and operating 
hours reduced at others.
    Marine Corps Answer. Commissaries are considered to be the number 
one non-pay compensation benefit of service members. Reduced commissary 
prices promote a 28 percent savings over civilian supermarket prices. 
Department of Defense (DoD) research shows a $2,000 annual savings for 
families with children who shop their commissary. Any reduction in 
commissary subsidies will directly translate into a reduction of 
services and benefits for all military personnel. Enlisted personnel 
would, therefore, have to shop on the local economy and pay more for 
their grocery items. Because enlisted members, especially married 
junior enlisted, must work hard to make their paychecks last from 
payday to payday, reduction of commissary subsidies would prove 
extremely detrimental to their morale and quality of life, and would 
adversely affect retention.
    Air Force Answer. Any reduction in commissary subsidy will have a 
direct impact on all military personnel--especially enlisted personnel. 
In 1997, DeCA received $936 million in appropriated funds supporting 
military families world-wide. This is part of a long standing 
commitment--a promise--on the part of Congress and DoD to cover certain 
commissary operating costs as an integral part of the military 
compensation package. Failing to stand-by our commitment will impact 
retention and morale.
    Air Force families count on savings from shopping in the commissary 
to extend their already stretched family income. These families save 
$2.40 for $1 of the appropriated fund subsidy. For the typical enlisted 
family, the commissary represents a savings of up to 29 percent on 
their grocery bills. The loss of the commissary benefit equals a 7 
percent pay cut to these troops. Also, commissaries are a major 
component of our military community. In the overseas environment, they 
serve as a critical quality of life link to home--a link that must not 
be sacrificed because they are stationed overseas.
    Finally, commissaries directly impact the quality of life of each 
member and have significant retention implications. In fact, according 
to the 1997 CSAF Quality of Life Survey, they ranked in the top three 
non-pay programs influencing career intent for officers and enlisted 
alike. Commissaries rated second only to health care in their influence 
on officer career intent. Enlisted members rated commissaries a close 
third behind health care and education. They have a direct impact on 
decisions to join the Air Force, stay with the Air Force, and Air Force 
readiness.

                            Personnel Issues

    Question. The average age of the enlisted service member varies by 
service, but averages between 17 and 24 years old, and is a younger 
workforce than their civilian age counterparts. During the last 20 
years, the enlisted force has changed from a ``single male'' 
establishment, to one with an emphasis on family. In this 17-24 year 
age group, 29 percent of the enlisted members are married. Gentlemen, 
what do you believe are the factors which are causing earlier 
marriages, earlier childbearing, and larger families with military 
personnel versus their counterparts in the civilian world? Why do you 
think service members differ from American society in this regard?
    Army Answer. The median age of active-duty Army enlisted members is 
26. The earlier marriage likely stems from several factors. One such 
factor is that cohabitation (men and women living together without 
benefit of marriage) is prohibited under Article 134 of the Uniform 
Code of Military Justice (UCMJ). A percentage of civilian young people 
choose to live with a member of the opposite sex versus marriage. In 
addition, the military provides steady paid work, so its members are 
more likely to marry than their civilian counterparts. Finally, there 
may be some incentive for military members to marry based on housing 
policies and additional allowances paid to married soldiers. Regarding 
family size, the average number of children, for soldiers who have 
children, is 1.9 children per soldier. This is not higher than the 
civilian average. Soldiers may start their families at younger ages, 
perhaps due to stable employment, incentives to marry, and the cultural 
norms of the military, but their average family size appears to be no 
greater than for their civilian counterparts.
    Navy Answer. We have no data that indicates that military members 
are marrying earlier, bearing children earlier or are having larger 
families. Not having the data described would make the comparison to 
American society at large speculative and possibly even erroneous.
    Marine Corps Answer. The decision to marry is influenced by many 
factors. Young service members often cite a desire to get out of the 
barracks as one reason. Other factors cited include a belief that 
marriage incentives such as the Variable Housing Allowance (VHA) will 
improve financial status and a fear that if they don't get married 
their sweetheart won't wait for them while they go off on a deployment.
    Additional factors which may cause earlier marriages, earlier 
childbearing and larger families include a significant increase in 
deployments and reunions, optempo climate, increased isolation and 
loneliness from loved ones and the general community.
    This young age group in the civilian world is far less mobile and 
is not isolated from the general society and their loved ones. The 
majority of young couples today are both employed and much more 
``career oriented.'' Their decision to have children later in life is 
closely associated with their desire to have their careers well 
established.
    Air Force Answer. The Air Force provides many positive factors that 
are conducive to a stable family life. Good medical care, a secure job 
and strong emphasis on Quality of Life by our senior leadership. A 
combination of these factors may contribute to a young airman's 
propensity to marry or have children.
    Question. What are the most significant concerns that young 
enlisted are generally worried about? What is the most commonly cited 
personnel problem?
    Army Answer. Results from the most recent Army-wide survey. ``Fall 
1997 Sample Survey of Military Personnel,'' provide some insight on the 
levels of satisfaction regarding quality of life and job among Active 
component soldiers. The semi-annual survey provides Army leadership 
with information to develop plans, assess policies, and evaluate 
program operations.
    The survey question was, ``Based on your Army experience, how 
satisfied or dissatisfied are you with the following?'' The response 
scale was: Very Satisfied, Satisfied, Dissatisfied, and Very 
Dissatisfied. The percent satisfied reported below includes ``very 
satisfied'' and ``satisfied.'' The percent dissatisfied is the 
``reverse'' of the percent satisfied, e.g., 72.7 percent are 
dissatisfied with the ``Amount of pay (basic).''
    Among all enlisted personnel, the lowest levels of satisfaction 
are:

                                                                 Percent
                                                         very satisfied/
        Aspect of Army life                                    satisfied
Amount of pay (basic).............................................  27.3
Retirement benefits...............................................  28.3
Opportunity to select a job, training or station of my choice.....  32.2
Special pay (such as bonuses).....................................  33.1
Amount of Variable Housing Allowance/COLA.........................  33.2
Availability of government housing................................  36.4
Amount of personnel available to do work..........................  39.2
Amount of equipment/supplies......................................  39.9
Amount of time separated from family..............................  40.2

    Among junior enlisted personnel (Private through Specialist), the 
lowest levels of satisfaction are:

                                                                 Percent
                                                         very satisfied/
        Aspect of Army life                                    satisfied
Amount of pay (basic).............................................  29.1
Amount of time separated from family..............................  32.5
Special pay (such as bonuses).....................................  33.7
Opportunity to select a job, training or station of my choice.....  33.9
Availability of government housing................................  35.5
Amount of Variable Housing Allowance/COLA.........................  35.8
Amount of equipment/supplies......................................  37.3
Quality of equipment/supplies.....................................  39.5
Retirement benefits...............................................  41.2
Amount of personnel available to do work..........................  42.8

    Among all enlisted personnel, the highest levels of satisfaction 
are:

                                                                 Percent
                                                         very satisfied/
        Aspect of Army life                                    satisfied
Commissary........................................................  78.2
Quality of recreational services..................................  75.4
Availability of recreational services.............................  74.0
Post exchange.....................................................  72.7
Geographic location of jobs.......................................  70.4
Job security......................................................  67.6
Quality of military dental care...................................  66.9

    Among all enlisted personnel, (Private through Specialist) the 
highest levels of satisfaction are:

                                                                 Percent
                                                         very satisfied/
        Aspect of Army life                                    satisfied
Commissary........................................................  79.5
Post exchange.....................................................  77.9
Job security......................................................  74.3
Quality of recreational services..................................  73.1
Availability of recreational services.............................  71.2
Quality of military dental care...................................  68.3
Geographic location of jobs.......................................  66.8
Level of educational benefits.....................................  66.2

    Navy Answer. The most significant concerns of the junior enlisted 
Sailors center around the lack of stability in the military. They are 
concerned about the downsizing and the continuous talk about the fiscal 
realities of today. Both of these directly affect the advancement 
opportunities and quality of life of Sailors.
    Marine Corps Answer. The Marine Corps is an exceptionally young 
force. Nearly half of our enlisted Marines are in the bottom three 
grades (E1-E3) and of those, only 20 percent are married. Their 
concerns are housing, finances, transportation and overall quality of 
life--the same things that all young people starting out are concerned 
about. However, service members have the additional concern of being 
away from home frequently for long deployments, as well as numerous 
shorter exercises while at their home station.
    Air Force Answer. There are many issues that concern not just our 
young enlisted members but all Air Force members. We've identified and 
focused our attention on seven quality of life priorities that address 
the major concerns of all our members. They are: (1) pay/compensation/
benefits, (2) PERSTEMPO, (3) quality health care, (4) adequate housing, 
(5) retirement benefits, (6) community programs, (7) educational 
opportunities. We do not have any survey or statistical data available 
to identify the most commonly cited personnel problem.
    Question. What kind of personnel problems are you hearing that 
platoon and company commanders, and sergeants are confronted most in 
their positions as troop leaders?
    Army Answer. Depending on the size and composition of the command, 
problems may vary. Most frequent problems include dealing with the lack 
of adequate housing, spousal employment opportunities, and 
indebtedness. Other problems frequently cited include: dislike for 
current duty, complaints about frequent deployments, lack of time to 
pursue civilian education, and lack of free time. Some dependent 
related problems also exist, particularly with single or separated 
parents. Soldiers in deployed areas with problems back home may not 
function as well in stressful situations as their contemporaries who do 
not have such problems.
    Navy Answer. The problems heard most often about junior Sailors are 
lack of respect for military seniors and inability to manage their 
personal lives. Many have trouble with respect because they enter the 
military distrusting many of their institutions and leaders. Thus 
respect is often not given simply for the rank or position a person 
holds. Those that have trouble managing their personal lives usually 
exhibit a lack of self-discipline. Navy leadership is committed to 
providing leadership that commands respect and dedicated to developing 
self-discipline in its Sailors at recruit training and continuing 
throughout the career regardless of its length.
    Marine Corps Answer. The close relationship of the small unit 
leaders with his young Marines allows him to hear all manner of 
problems and concerns. On the professional side, Marines are concerned 
with promotions, deployment schedules, and their status within the 
platoon. On the personal side, the most often cited problems deal with 
relationship issues, financial concerns, spouse employment, and child 
care.
    Air Force Answer. Tempo is identified by commanders and first 
sergeants as the most pressing readiness issue. Tempo, along with 
compensation and benefits, are cited by members as the most pressing 
retention issues. In addition, members have expressed concern about 
Outsourcing and Privatization, (``will I still have a job''), care for 
families of deployed members, and health care/TRICARE.
    Question. How do the young enlisted feel about their standard of 
living in the military?
    Army Answer. There is no one answer that will suffice for all 
soldiers' standard of living, since geographical locations play a large 
role as well as the mission of the command. Soldiers on their first 
enlistment are generally single, and live in the barracks, usually with 
a room-mate. Many soldiers cite lack of privacy as a detriment to 
service life, others cite dislike for their roommates, restrictions on 
decorating living areas, playing music and social acclimation in 
general. Young married soldiers often have difficulty in obtaining 
suitable, affordable housing. Living in a high cost area, coupled with 
commuting costs, furniture costs, and other housing related problems 
also contribute to frustration. Spousal employment is also a factor, as 
well as child care facilities, post facilities and activities. Pay and 
compensation are problems for some young soldiers, especially the young 
married soldiers just starting out.
    Navy Answer. Both junior and senior enlisted Sailors do not expect 
to become wealthy on the salaries they receive. Most feel, however, 
they are not adequately compensated to the same extent a civilian would 
be for the work and sacrifices required to support our forward 
presence. Most live fist-to-mouth. Most spouses of married members must 
work in order to enjoy the standard of living they believe they 
deserve.
    Marine Corps Answer. There are differing levels of satisfaction 
among young enlisted Marines about their standard of living. This is 
evidenced by the Marine Corps Quality of Life Study, conducted by the 
Navy Personnel Research and Development Center (NPRDC) in 1993, which 
surveyed over 10,000 Marines on various aspects of their life. A total 
of eleven life areas, or ``domains'' were measured; the ``Income and 
Standard of Living'' domain was one of these elements. The study 
analysis, published in January 1995, reported a number of results that 
address the question:
    a. Of the top eight reasons given for ``the best thing about being 
a Marine,'' pay and benefits ranked sixth, with 4.5 percent selecting 
this option. Approximately 40 percent of the members thought they would 
be better off (financially) as civilians.
    b. A key measure of satisfaction with pay level is spousal 
employment and members holding second jobs. Sixty percent of the 
respondents had spouses who were working. Ten percent of responding 
members had a second job, and 18 percent were seeking a second job.
    c. The Marine Corps will re-administer the Quality of Life study in 
1998.
    Air Force Answer. We recently conducted a quality of life survey in 
the Air Force which included questions about the adequacy of pay and 
specific allowances--issues we believe contribute significantly to 
standard of living impressions. Similar to officers and other enlisted 
members, our younger airmen, gave us unfavorable feedback on these 
compensation issues. Only 18% of first-term and 12% of second-term 
airmen assessed their pay to be as good or better when compared to 
their counterparts in the private sector. This indication of pay 
inadequacy was reinforced by responses that pay is ``fair and 
equitable'' by only 28% of first-term and 23% of second-term members. 
Reviews of housing allowances faired only slightly better as 
satisfaction was limited to 33% and 29% of first- and second-term 
airmen (respectively). Approximately 60% of active duty Air Force 
members receive housing allowances because of our limited base housing 
capacity. Temporary duty allowances were also negatively viewed, with 
under 60% of both first- and second-term members expressing 
dissatisfaction with these reimbursements.
    Interviews with unit commanders and surveys of first sergeants tell 
us fair and competitive compensation is the number one quality of life 
issue related to retaining quality people. For several years, the Air 
Force has maintained a focus on compensation because of our 
understanding of its direct impact on standard of living perceptions.
    Question. Do the young enlisted perceive their pay, education 
opportunities, work environment, etc., is as good or better than 
civilians in their age group?
    Army Answer. Generally, the average soldier perceives himself of 
being ahead of civilians in the same age group (18-21). In terms of 
pay, the average young soldier is compensated pretty much in line with 
civilians of a similar age in minimum wage jobs. Soldiers generally 
feel they are given more responsibility at a younger age. According to 
surveys, soldiers feel they are doing a valuable service, and they 
generally cite a satisfactory experience in the Army. Young soldiers 
see more opportunities for travel and adventure compared to their 
civilian counterparts. Those soldiers located in areas with educational 
opportunities also are satisfied with the chance to pursue civilian 
education.
    Navy Answer. In our 1997 Navy-wide Personnel Survey, we asked 
Sailors how they felt about many of these issues. In general, it seems 
that junior Sailors are happy with their work environment, jobs, and 
opportunities in the Navy but do not believe the pay is adequate, or is 
an incentive to stay in the Navy.

                              [In percent]
------------------------------------------------------------------------
                                                         E1-E3    E4-E6
                                                         agree    agree
------------------------------------------------------------------------
Satisfied with current job............................     52.1     63.0
Like Navy work........................................     57.3     76.1
Satisfied with physical work conditions...............     57.7     64.3
Glad I chose the Navy over other alternatives.........     39.5     58.6
Adequately paid.......................................     20.7     22.6
Amount paid is a reason to stay in the Navy...........     20.3     27.7
------------------------------------------------------------------------

    Marine Corps Answer. The Marine Corps Quality of Life study, 
conducted by the Navy Personnel Research and Development Center (NPRDC) 
in 1993, surveyed over 10,000 Marines on various aspects of their life. 
A total of eleven life areas, or ``domains'' were measured; the 
``Income and Standard of Living'' domain and the ``Work'' domain, were 
two of these elements. The study analysis, published in January 1995, 
reported a number of results that address the question:
    a. Of the top eight reasons given for ``the best thing about being 
a Marine,'' pay and benefits ranked sixth, with 4.5 percent selecting 
this option. Approximately 40 percent of the members thought they would 
be better off (financially) as civilians.
    b. A key measure of satisfaction with pay level is spousal 
employment and members holding second jobs. Sixty percent of the 
respondents had spouses who were working. Ten percent of responding 
members had a second job, and 18 percent were seeking a second job.
    c. The greatest dissatisfaction expressed by respondents was with 
pay benefits, followed by opportunities for personal growth and 
development on the job. Eighty-four percent reported they were working 
in their own specialty (MOS).
    d. Forty-four percent stated they would be ``much more likely'' or 
``more likely'' to have their ideal jobs now than if they were 
civilians. The largest discrepancy between what these members' present 
jobs offer and their ideal jobs was in the amount of autonomy they feel 
they had.
    e. Regarding perceived adequacy of training and job related 
problems, 53 percent believed they were adequately trained to do their 
jobs. Twenty-one percent stated they did not believe they were 
adequately trained, 26 percent were neutral. Junior enlisted were found 
to experience more job related problems more frequently than senior 
enlisted or officers.
    Air Force Answer. In the 1997 Quality of Life (QoL) survey, only 
16% of our enlisted members believe their pay was as good or better 
than the private sector. However, a 1994 RAND study showed that junior 
enlisted pay growth exceeds that of the junior members of the civilian 
labor market. This is, in part, driven by a rapid salary growth (pay 
system front-loads both raises and promotions) for junior enlisted 
members. Across OSD, the average enlisted member receives 10 pay raises 
in first 4 years--almost 80% increase.
    As for education, the 1997 QoL survey revealed that three of the 
top five reasons enlisted people stay in the Air Force are educational 
programs--Tuition Assistance (#1), Air Force off-duty education (#4) 
and Community College of the Air Force (#5).
    Finally, in the same survey, 73% of enlisted members report the Air 
Force is a good place to work, 66% reported the Air Force provided good 
QoL at their duty station and 71% stated their family was supportive of 
their career.

                Financial Conditions of Military Members

    Question. A recent Department of Defense survey asked enlisted 
members to rate their financial condition on a five-point scale:
    1. ``In over my head;''
    2. ``Tough to make ends meet, but keeping my head above water;''
    3. ``Occasionally have some difficulty making ends meet;''
    4. ``Able to make ends meet without much difficulty;'' and
    5. ``Very comfortable or secure.''
    The survey reported that nearly half expressed only occasional or 
little concern over their financial conditions. As you talk to enlisted 
members, does the subject concerning their overall financial well-being 
get discussed?
    If so, is it your impression that most enlisted personnel are able 
to make ends meet with their present household income?
    What, in your opinion, are the most significant causes of personal 
financial problems? Do you perceive it is due to immaturity on the part 
of the service member and/or his spouse regarding finances in general; 
living beyond one's means; getting married at a young age; or the easy 
access to credit and credit cards?
    Is there any evidence that problems with personal finances impact 
on the operational readiness of individuals? Explain.
    Army Answer. Yes, I often talk to enlisted members about their 
overall financial well-being. Adequate compensation is always a hot 
topic. I have found that most enlisted personnel are generally able to 
make ends meet with their present household income. However, recent 
surveys find that 18 percent of Army service members reported having 
difficulty paying their bills nearly every month. The members that were 
most likely to have difficulty included enlisted (E1-E4), mid-enlisted 
(E5-E6), single parents, and those with special needs family members. 
However, some units have had great success by assigning a 
noncommissioned officer to act as a financial advisor for their 
soldiers.
    In addition to the reasons you mentioned for the financial 
conditions of our junior troops, field counselors note the following 
reasons for personal financial troubles:
    1. Unemployment prior to entering the military;
    2. Large medical bills prior to entering the military (child birth 
without insurance);
    3. Support of parents or sibling(s);
    4. Assuming debt of new spouse; and
    5. Lack of education.
    Financial difficulties experienced by the military member can 
affect military readiness. Members can be considered non-deployable or 
can be brought home early from a deployment or overseas assignment, and 
in extreme cases can be separated early from the military for financial 
reasons. Financial indebtedness also can impact a soldier's ability to 
acquire a security clearance, affect his job focus, consume the 
Commanders and the soldier's time and cause unneeded social and 
emotional stress on the member.
    We are fine tuning our Financial Education Program to meet the 
needs of today's soldiers. Preparation for the known, as well as the 
unknown, financial burdens can ease the effect. Army Community Service 
(ACS) Consumer Affairs and Financial Assistance Program (CAFAP) offers 
a variety of programs and services to address the financial needs of 
service members and their families including, proactive education, and 
financial management training and counseling.
    CAFAP helps commanders establish an educational and counseling 
program in personal financial affairs, teaches soldiers self-
sufficiency, reduces indebtedness, and reduces high demands for 
emergency financial assistance through classes on money management, 
credit, financial planning, insurance and consumer issues.
    CAFAP also provides basic education (prevention) including money 
management classes for soldiers and families on banking, checkbook 
management, debt liquidation, credit, car buying, local consumer laws, 
consumer rights and obligations, savings and investing, financial 
planning for deployment, budget development, income tax assistance, and 
record-keeping.
    The Army is also doing the following:
    1. Developing the 1st Termers Financial Management Education 
Program designed for ACS CAFAP/units and Training and Doctrine Command 
(TRADOC) school houses;
    2. Making Financial Planning for Relocation mandatory for E4 and 
below;
    3. Revamping it's Financial Management Prevention Education 
Program;
    4. Through TRADOC, planning to expand training in the school house 
and devising a method of providing training to Delayed Entry Personnel; 
and
    5. Working with the Office of the Secretary of Defense to develop a 
Personal Financial Management Distance Learning Program and a 
Certification Program for Financial Counselors.
    Navy Answer. Yes, overall financial well-being gets discussed as it 
pertains to their ability to provide for themselves and their families 
in the manner they could if they were civilians. The fact that their 
raises are capped at .5% below Employment Cost Index (EPI) tells them 
they are losing purchasing power.
    Personnel who live in a very financially disciplined manner, who 
have adequately planned their families and expenditures to match their 
income and those who reject easy credit can make ends meet. If any of 
the above is missing, financial problems can arise quickly.
    The most significant cause of personal financial problems is the 
lack of personal financial education. You can't watch television, 
listen to the radio, or even answer the phone without being inundated 
with easy credit and opportunities to increase your debt. Just beyond 
the gate of any military base in the country, one can see billboards 
advertising ``Easy credit to E-1 and up.'' Yet some of our junior 
enlisted--those being given this credit--have trouble developing a 
basic budget and balancing a check book. Each command has trained 
Command Financial Specialists to teach, counsel and guide Sailors, but 
by the time personal financial management problems come to the 
command's attention, the damage is already done. This is a recipe for 
financial disaster, when combined with new-found independence, a 
regular paycheck, and no/few bills. Studies have shown that the 
majority of Navy bankruptcy filers are E-5 and E-6 level petty 
officers. We believe that some of these mid level enlisted supervisors 
may be declaring bankruptcy because they cannot handle the debt they 
accumulated when they used easy credit to provide a standard of living 
for their families that was inconsistent with their income level.
    There is clear evidence that personal financial problems do have an 
impact on operational readiness and are a significant drain on our 
resources. We know that on average, 60% of the security clearances that 
are canceled are for personal financial reasons. We also spend over $36 
million a year on direct salary costs to process letters of 
indebtedness on our Sailors that are received by commands from lenders. 
And of course, leading petty officers, leading chiefs, and division 
officers all must take time from their normal duties to address the 
financial indebtedness issues of subordinates.
    Marine Corps Answer. As we have conducted focus groups with Marines 
and family members, financial well-being is often discussed. Of course, 
everybody would like to have more money. But money is not the reason 
young Americans join the Corps. Still, as with life's other difficult 
vocations--not being burdened with the frustration of inadequate pay 
and allowances frees a Marine to apply his dedication to the task at 
hand.
    The majority of enlisted Marines are able to make ends meet. 
Marines generally are a responsible lot, and they recognize a hallmark 
of responsibility is to live within one's financial means. Of course, 
annual pay raises, longevity raises, and promotion raises are all 
highly anticipated, and many Marines have working spouses. But by 
taking advantage of all elements of military compensation--including 
commissary and exchange privileges--Marines at any grade can reasonably 
make ends meet.
    There are numerous causal factors to personal financial problems. 
Certainly the lack of basic personal financial management skills, 
immaturity, easy access to credit, and young marriages may all be 
contributing factors.
    Personal financial responsibility is stressed throughout the Corps, 
particularly toward our junior enlisted Marines. Through the Marine 
Corps Institute, we offer correspondence courses on personal finance, 
and our Family Service Centers are always available for financial 
counseling.
    For every Marine with personal financial problems, there are many 
others of the same grade and family circumstances who are making ends 
meet. Their counsel can go a long way toward helping their fellow 
Marine better understand and minimize his financial problems.
    While personal financial problems are a concern, we have no 
evidence that the operational readiness of individuals is impacted. Of 
course, preoccupation with financial difficulties (or any other matter) 
distracts a Marine from the mission at hand. Leaders, therefore, take 
whatever steps are necessary (such as referral to the Navy Relief 
Society or a Family Service Center) to help the individual deal with 
the difficulties.
    Air Force Answer. Yes. Tempo, along with compensation and benefits, 
are cited by members as the most pressing retention issues. To address 
these concerns, Air Force Family Support Centers (FSCs) offer various 
classes in personal finances. Known as the Personal Financial 
Management Program (PFMP), it offers information, education, and 
personal financial counseling to help individuals and families maintain 
financial stability and reach their financial goals. Upon arrival at 
their first duty station, all new Air Force members must attend a FPMP 
training class covering such topics as checkbook maintenance, 
budgeting, and credit management. In fiscal year 1997 FSCs held PFMP 
classes that contacted 176,000 members. They also provided individual 
counseling sessions for 51,500 members.
    Yes, it is our impression that most enlisted personnel are able to 
make ends meet with their present household income, the 1997 Air Force 
Needs Assessment Survey found that only 13% of active duty enlisted 
personnel and 15% of enlisted spouses stated they had difficulty paying 
bills nearly every month.
    All of these factors contribute to personal financial problems. The 
Air Force provides training to address all of these factors and build 
the personal financial management skills and awareness needed in 
today's credit-based consumer society. For our new enlistees, the Air 
Force provides 2-4 hours of personal financial training at basic 
training, 2-4 more hours at technical school, and 2-3 hours at the 
first duty station. The training focuses on personal and family 
budgeting, checkbook management, credit management, savings, state or 
country liability laws, car buying, deployment financial readiness, 
crisis financial management, and local fraudulent business practices. 
For personnel of all ranks, each base Personal Financial Management 
Program (PFMP) Manger offers one-on-one counseling and recurring 
classes on the full range of personal financial topics.
    A January 1997 Army/Air Force Exchange Service (AAFES) study of 10 
to 20 percent of PFMP case files at 10 Air Force bases found 13 percent 
of monthly expenditures go to car payments, 11 percent to credit cards, 
16 percent to rent/mortgage, 6 percent to other installment loans, 5 
percent to utilities, 2 percent of AAFES Delayed Payment Program, with 
the remaining 47 percent going to food, insurance, gas, clothes, phone, 
entertainment, etc.
    A July 1996 through November 1997 survey of Keesler AFB technical 
school students found 2726 trainees in debt; equating to 29 percent of 
the total 9,308 trainees. The average debt was $8,142 per person. 
Separately, Lackland AFB technical schools surveyed 5902 trainees in 
1997 and found that 2,604 (44 percent) had debts averaging $5,337 per 
individual. Credit cards and auto loans were the two primary types of 
debt reported at both schools.
    The 1997 DoD Enlisted Career Intentions Survey (ECI) found that 
about 70 percent of E-4s and E-5s said discretionary income was 
available at least sometimes.
    There is no evidence that problems with personal finances impact on 
the operational readiness of individuals.
    Although personal finances sometimes require time off from work, 
this trend is improving. In the 1995/1996 Family Support Needs 
Assessment Survey, 18% of Air Force people reported needed time off (in 
the past month) due to financial problems--finances ranked third after 
family member health and transportation. In the 1997 survey, only 15% 
reported needing time off--finances ranked sixth.

                     Recruiting Enlisted Personnel

    Question. The services recruit over 190,000 Active duty personnel 
each year. Recruiting quality enlisted members is becoming more 
challenging, because the services are having to deal with a decline in 
youth interest in the military at a time when the military is 
experiencing additional personnel reductions, budget constraints, and 
an increase in the number of deployments. What is your recruiting goal 
for non-prior and prior service accessions for 1998? Are your 
recruiters achieving their mission and/or monthly goals?
    Army Answer. The 1998 annual recruiting goal is 67,950 non-prior 
service accessions and 4,000 prior service accessions. Through March, 
the Army has accessed 27,492 soldiers, or 99.7 percent of the 
recruiting mission to date (27,555). In the aggregate, the Recruiting 
Command has not achieved its monthly contract mission (number of 
applicants who enter the Delayed Entry Pool (DEP)) since September 
1996, but has achieved its monthly accession missions (number of 
recruits who come on Active duty). The effect of meeting accession 
goals, while not meeting contract goals is that the size of the DEP 
gets smaller. As the DEP gets smaller, the recruiters must work harder 
to get contracts ``in close,'' and overall recruiter productivity goes 
down.
    Navy Answer. For 1997, 48,009 were non-prior service and 1,116 
prior service for a total of 49,125. For 1998, our goal is 54,872 non-
prior service and 1700 prior service for a total of 56,572. For fiscal 
year 1998, the Navy is not making its monthly goals. Through March, 
Navy has missed accession goal by 2,548.
    Marine Corps Answer. The non-prior service and prior service (total 
force) accession goal for 1997 was 40,369. The Marine Corps accessed 
40,716, 100.9% of its goal for the year. The Marine Corps has exceeded 
the Department of Defense quality goals of 90% Tier I's and 60% I-3A's. 
During Fiscal Year 1997 the Marine Corps accessed 96.2% Tier I's and 
66.4 I-3A's. The non-prior service and prior service accession goal for 
Fiscal Year 98 through February was 14,905. The Marine Corps has 
accessed 14,988, 100.6% of its assigned goal. In fact, we have exceeded 
assigned goals for the past 33 consecutive months. To date in fiscal 
year 1998, we have contracted 96.0% Tier I's and 66.3% I-3A's. This is 
ahead of where we were at this time last year. Marine Corps recruiting 
is on track to meet or exceed all quality and quantity goals for fiscal 
year 1998.
    Air Force Answer. Our fiscal year 1997 non-prior service recruiting 
goal was 30,200 and the prior service goal was 110. Both goals were 
achieved.
    Question. Give some examples of the Military Occupational 
Specialties (MOS) you are having problems enlisting personnel into. Are 
these MOSs defined as low skill, mid-level skill, or high-skill job 
areas?
    Army Answer. Currently, the Army is overcoming challenges in 
recruiting for the combat arms and combat arms mechanic MOSs. Based on 
initial-entry aptitude requirements, these MOSs are considered low 
skill when compared to other MOSs. Command emphasis and an increase in 
monetary incentives have directly contributed to an improvement in 
recruiting and operating strengths in these MOSs. The table, below, 
displays year-to-date recruiting and strength data for the seven most 
critical combat arms and combat arms mechanic MOSs:

                              [In percent]
------------------------------------------------------------------------
                                            YTD recruiting
 Military skills Operations  -------------------------------------------
          strengths             Fiscal     Fiscal     Fiscal     Fiscal
                               year 98    year 97    year 98    year 97
------------------------------------------------------------------------
Infantryman.................        100         96         94         60
Field artillery crewmember..        107        101         92         54
Armor crewmember............        110        104         99         70
Tank turret mechanic........         88         77        106         38
Bradley turret mechanic.....         77         69        102         31
Tank systems mechanic.......         96         91        100         93
Bradley systems mechanic....         94         86        110         60
------------------------------------------------------------------------

    Navy Answer. Navy is having difficulty recruiting Nuclear Field 
candidates, Fire Control technicians, and General Detail Sailors 
(GENDET). Nuclear Field and Fire Control Technicians are high skill job 
areas while GENDET is a low skill job area.
    Marine Corps Answer: Enlisted recruits are given enlistment 
guarantees in the form of enlistment programs, which are groupings of 
various skills or military occupational specialties (MOS). The ``high 
tech'' occupational fields of Data/Communications Maintenance, 
Communications Electronics, Signals intelligence, and Aviation 
Operations occupational programs present a challenge to our recruiters 
due to their higher line score requirements. The Marine Corps is 
addressing this challenge by offering a $2,000 and $3,000 enlistment 
bonus as incentives to those individuals enlisting for these hard-to-
fill programs. Additionally, the Commanding General, Marine Corps 
Recruiting Command has placed additional leadership focus on filling 
these high tech programs and tasked the Region Commanding Generals and 
District Commanding Officers with filling 100% of the ``high tech'' 
program requirements.
    Air Force Answer: Some examples include Combat Control (1C2X1), 
Pararescue (1T2X1), Crypto--Linguists (1N3XX--Germanic, Romance, Far 
East, Mid-East, and Slavic), and Explosive Ordinance Disposal (3E8X1). 
All of these career fields are considered high skill areas. Although 
recruiting these individuals is challenging, we continue to meet 
targets for all of these career fields except Combat Control. In fiscal 
year 1995 and fiscal year 1996, we achieved 78 percent of our Combat 
Control recruiting target and improved to 99 percent in fiscal year 
1997. We've implemented a number of initiatives to enhance Combat 
Control and Pararescue recruiting to include targeted advertising, 
specialized recruiting teams, and additional point of sales material.
    Question. What is the average cost for each of the services to 
recruit and train a new service member?
    Army Answer. The following data is based on fiscal year 1997 Active 
Army accessions.

Recruiting Cost:
    Recruiting Cost Per Accession............................\1\ $10,163
    Military Entrance Processing Command......................   \2\ 720
        Total Recruiting Cost.................................    10,883
Training Cost:
    Reception Station (3 days)................................   \4\ 600
    Basic Training (8 weeks).................................. \4\ 8,900
    Advanced Individual Training \3\..........................\4\ 17,500
        Total Training Cost...................................\4\ 27,000
        Total Cost............................................    37,883

\1\ This cost includes Army College Fund, Enlisted Bonus, Loan Repayment 
Program, Military Pay Army, civilian pay, advertising, communication, 
computer (ADP), recruiter support, and facilities. Because this is an 
average cost per accession, it can vary significantly from year to year 
based on total number of accessions.
\2\ This cost includes Military Pay Army, civilian pay, communication, 
ADP, supplies, facilities, physical exams and Armed Services vocational 
Aptitude Battery test.
\3\ This is based on 10 weeks average.
\4\ This cost includes student's salary, base support, medical, 
ammunition, and facilities.

    Navy Answer. The average cost to recruit a Navy sailor is 
approximately $6,800 for fiscal year 1998.
    Marine Corps Answer. The average cost to recruit an enlisted 
Marine:

Fiscal year 1998..............................................    $5,018
Fiscal year 1999..............................................     5,108

    This cost is determined by the Office of the Assistant Secretary of 
Defense for Accession Policy.
    The average cost to train an enlisted Marine for his/her first 
permanent duty station is as follows:

------------------------------------------------------------------------
                                          Fiscal year 98  Fiscal year 99
------------------------------------------------------------------------
O&MMC...................................          $1,799          $1,847
MPMC....................................          17,910          17,910
PANMC (AMMO)............................             (*)           1,246
                                         -------------------------------
      Total.............................          19,709         21,003
------------------------------------------------------------------------
* Ammunition data prior to Fiscal year 1999 does not allow for a
  breakdown of costs down to the individual school. Fiscal year 1999
  costs are only for enlisted entry level MOS producing courses.

    These costs do not include costs budgeted by other armed services 
to train Marines at other service locations.
    Air Force Answer. The average cost to recruit a new enlisted member 
into the Air Force is $4,400. On average, it then costs $27,502 to 
train that new recruit. This includes $12,654 for Basic Military 
Training and $14,848 for advanced training. Costs include fixed and 
variable military pay, civilian pay and O&M in fiscal year 1998 
dollars.
    Question. Most enlistees enter the Delayed Entry Program (DEP) 
before reporting to duty. The services use the DEP to control the flow 
of recruits into training; the average time in the DEP is approximately 
four months. Does your service have to reach into the DEP sooner than 
anticipated because you are not making your recruiting mission? If so, 
explain how this impacts your overall recruiting mission.
    Army Answer. The Army has not had to reach into our DEP this fiscal 
year to make its accession requirements. We did reach into our DEP last 
fiscal year so we can talk to the impacts. First, a decreased DEP 
creates a ``just in time delivery'' recruiting environment in which 
recruiters are potentially recruiting large numbers of individuals in 
the same month they need to access to training. This can cause 
recruiters and all levels of the command to focus on recruiting markets 
that are available to access now and potentially lose track of 
investing time in other recruiting markets, such as High Schools. 
Secondly, reaching into the DEP reduces the ``carry over'' into the 
next fiscal year, which adds to the overall recruitment mission for the 
coming year--not only would the command need to make its annual 
requirement, but it must also rebuild the DEP to acceptable levels. 
Both of these circumstances affect other aspects of recruiting in terms 
of command focus, resource requirements, advertising strategies, and 
use of the incentive program, to mention a few. It can take a year or 
two to recover from a decreased DEP. This fiscal year is a recovery 
year for Army recruiting. One of the major objectives this year has 
been to establish a stable recruiting environment for our recruiting 
force. The Army is on track this year to accomplish these goals.
    Navy Answer. The Navy reached into its DEP for fiscal year 1997 
mission attainment and continues to do so for fiscal year 1998. The 
Navy now goes into each month without a sufficient number of identified 
accessions forcing recruiters to find individuals who can access in 
that month. The current average time in DEP is 3 months but with many 
accessions shipping to RTC within the month. This is not an efficient 
way to recruit nor do the recruits have an opportunity to participate 
in DEP functions and the associated training.
    Marine Corps Answer. The extent to which we must reach out farther 
than desired in the DEP to make shipping numbers varies with the time 
of the year. There is a definite yearly recruiting cycle that drives 
the degree to which we must move recruits up in the shipping queue. In 
the summer shipping months, we are shipping recruits who just graduated 
from high school and who have been in the DEP since the previous 
summer. These applicants typically want to ship as soon after high 
school graduation as possible, making the demand for June, July and 
August shipping slots high. As a result, we do not have to reach out in 
the pool to move up recruits. As we enter into the winter and spring 
months, we often move up recruits to avoid large direct-contracting/
shipping requirements.
    We are not reaching into the DEP sooner than anticipated--we track 
pool development closely and are able to anticipate well in advance 
what actions are required to meet shipping requirements in any given 
month. It is fair to say that in the winter and spring months, we will 
reach farther into the DEP than we would like to, but not farther than 
we anticipate. The effects, however, of moving recruits up in the 
shipping queue during these months are generally good. First, moving 
recruits up reduces their chance of attrition from the DEP. Second, it 
helps reduce recruit depot attrition since we can then avoid shipping a 
recruit who essentially has no time in the DEP (more time in DEP 
equates to better chances of succeeding in recruit training). Third, 
moving them up helps the individual recruiter quality of life since it 
takes them out of the direct market. And finally, it helps improve 
overall quality of recruits since recruiters are given more time to 
find a quality applicant to ship later and are less inclined to work 
with marginally qualified applicants in a rush to meet direct shipping 
requirements.
    Air Force Answer. No, it has not been necessary to reach into the 
DEP. Our goal is to enter the fiscal year with 43% of the enlisted 
accession goal already in the DEP. We entered fiscal year 1997 with 
43.3 percent and fiscal year 1998 with 44.1 percent in the DEP.
    Question. Have you had to lower your original recruiting goals for 
1998? If so, by how much?
    Army Answer. The Active component recruiting mission for 1998 is 
71,950. In October 1997, the 1998 mission was 77,500 (5,500 more). The 
Army's recruiting goal is ``floated'' throughout the year to ensure a 
``fixed'' Army end strength is achieved by the end of the fiscal year. 
Retention and attrition efficiencies have helped the Army to lower its 
recruiting mission. Current projections show that a recruiting mission 
of 71,950 will enable the Army to achieve its end strength goal.
    Navy Answer. The Navy has not lowered its recruiting goals for 
fiscal year 1998, however, the Navy recognizes that it will not make 
its recruiting goals.
    Marine Corps Answer. The Marine Corps has not had to lower its 
recruiting mission this year. The Marine Corps has accomplished its 
recruiting mission and goals for 33 consecutive months. We have, in 
fact, increased our regular accession mission by 400 for fiscal year 
1998 from the original plan due to changes in the manpower plan.
    Air Force Answer. No. The prior and non-prior service enlisted 
accession goal for fiscal year 1998 is 30,300.
    Question. What percent of recruits change their minds and ask to be 
released from their enlistment contracts?
    Army Answer. As you know, losses occur while enlistees are in the 
Delayed Entry Program (DEP) for a variety of reasons. Last fiscal year, 
9.4 percent of the individuals we contracted to join the service 
changed their minds or dropped out for reasons such as ``buyers 
remorse'' or a civilian job or educational opportunity. There are other 
valid reasons for an enlistee not to meet his or her commitment for 
enlistment. Many delayed entry enlistees may fail to graduate from high 
school, may incur medical conditions or test positive for drugs or 
alcohol at the time of physical examination, or may incur a legal 
problem or other factor that disqualifies them from military service. 
These are acceptable losses from a practical point of view. We do seek 
to minimize losses of any type by maintaining the qualifications of our 
DEP members and by reconfirming the commitment of those who become 
concerned with their decision to enlist. We do, however, honor the 
decision of those applicants who firmly decide not to fulfill their 
contractual commitment. We feel this is consistent with our all 
volunteer force.
    Navy Answer. From fiscal year 1996 to fiscal year 1997, 8 percent 
of Delayed Enlistment Program personnel (DEPpers) declined enlistment. 
The gross number of contracts was 116,963, with 19,629 attrition from 
the DEP (16.8 percent) (to include medical and drug reasons) of which 
9,592 DEPpers declined enlistment (8 percent).
    Marine Corps Answer. Approximately 10 percent of contracted 
recruits in the Delayed Entry Program (DEP) change their minds and are 
categorized as Refusal to Ship (RTS). RTS composes approximately 35 
percent of total DEP attrition. The remainder of DEP attrition is due 
primarily to failure to graduate; pursuit of higher education; pursuit 
of officer program; overweight; failure of the initial strength test; 
drug violation; medical disqualification; and police involvement.
    Air Force Answer. In fiscal year 1997, 15.9 percent of recruits in 
the delayed entry program (DEP) dropped from the program before 
entering active duty. The average DEP drop rate from fiscal year 1990 
to fiscal year 1997 was 15.3 percent.
    Question. Have your recruiters seen any evidence that the quality 
of recruits is declining among the enlisted accessions? Are we 
enlisting recruits with average or above-average aptitude levels and 
reading skills?
    Army Answer. The Army continues to meet the quality standards set 
by the Army and the Department of Defense. We have seen an increase in 
competition for the youth that we define as our ``Prime Market''--that 
is, the group that contains High School Diploma Graduates, scores in 
the top 50 percent of the Armed Services Vocational Aptitude Battery 
(ASVAB) test, and that also meets all physical and moral 
qualifications. Of all recruits, 67 percent must score in the top 50 
percent of the ASVAB. These recruits are above the national reading and 
math norms as measured on the ASVAB. Finding these prime market 
prospects is increasingly difficult. Our recruiters have to wade 
through thousands of applicants who do not meet the requirements for 
entry into military service to find the prospects who do meet the 
qualifications. The quality of our recruits has remained high through 
our recruiters' hard work and through the programs that support the 
recruiting effort.
    Navy Answer. The Navy is recruiting five percent of non-High School 
Diploma Graduates and 65 percent Test Score Category I-IIIA. This is 
similar to fiscal year 1996 and fiscal year 1997 quality attainments. 
The Navy is enlisting recruits with average or above average aptitude 
levels and reading skills.
    Marine Corps Answer. The Marine Corps Recruiting Command continues 
to consistently exceed the quality standards of 60 percent Mental 
Category I-IIIA and 90 percent Tier I recruits set by the Department of 
Defense. During fiscal year 1997, the Marine Corps contracted over 66% 
Mental Category I-IIIAs (scoring above the 50 percentile on the Armed 
Forces Vocational Aptitude Battery) and 96% Tier Is (high school 
graduates/equivalents). Although the Marine Corps does not specifically 
isolate and report reading skills scores, our high school graduate 
percentages and ASVAB test scores indicate that we are recruiting a 
high quality applicant.
    Air Force Answer. The Armed Forces Qualification Test (AFQT) scores 
and the percent of recruits with High School diplomas are the Air 
Force's primary measures of accession quality. The AFQT measures an 
applicant's aptitude to include arithmetic reasoning, mathematics 
knowledge, word knowledge, and paragraph comprehension. The overall 
quality of Air Force accessions remains high. In fiscal year 1997, over 
99% of enlisted Air Force accessions had a high school diploma and 79% 
scored above average on the AFQT (Categories I-IIIA). This is well 
above the DoD floor of 90% High School graduates and 60% AFQT Cat I-
IIIA. In fiscal year 1998, we have noted a slight drop in the percent 
of enlistees scoring above average on the AFQT (78%), but are 
maintaining a 99% High School diploma enlistment rate.
    Question. The military has a number of career fields with require 
greater responsibility and a more diverse workload. Since the majority 
of accessions are young high school graduates, the military is often 
their first full-time job. Do you have any concerns that high school 
graduates will be able to perform the more complex or difficult tasks 
with our increasing weapons technology?
    Army Answer. No. Today's recruits continue to meet our expectations 
for quality and our recruiting standards will continue to be strictly 
enforced. In addition, the more complex weapon systems are designed 
with the participation of our soldiers to ensure they can be operated 
and maintained appropriately.
    Navy Answer. Navy recruits, to include high school graduates, 
continue to perform very well especially in highly technical skills and 
have expressed that skill training and responsibility is one of the 
most important reasons to join the Navy.
    Marine Corps Answer. All research conducted over the past 20 years 
indicates that applicants with a traditional high school diploma have 
the highest likelihood of completing their first term of enlistment. 
Graduating from a traditional high school demonstrates a certain degree 
of responsibility and shows that an individual is capable of success in 
a structured environment. As such, this is the best indicator of a 
recruit's ability to succeed in a military environment.
    To identify specific attributes, we administer the Armed Services 
Aptitude Battery (ASVAB) to all applicants. The results of this test 
are used to determine an applicant's suitability for specific technical 
and non-technical fields and to place recruits in job specialties where 
they are qualified and will likely succeed. This combined with the 
self-discipline and sense of responsibility instilled in recruit 
training adequately prepares young recruits for the difficult 
requirements of a technologically advanced military.
    Air Force. Answer. No. In fiscal year 1997, 99% of all enlistees 
were high school graduates and 79% scored in the top half of the Armed 
Forces Qualification Test. Just as in civilian industry, our enlisted 
personnel must be trained and experienced before being put to work. 
Each Air Force Specialty Code (AFSC) has five skill levels: apprentice, 
journeyman, craftsman, superintendent, chief enlisted manager; also 
referred to as one, three, five, seven, and nine skill levels.
    Each graduate of basic military training completes training 
tailored to a specific AFSC before being assigned to their first duty 
station. Some training leads to award of the ``3-level'' upon 
completion; others will need to continue on-the-job training at their 
first duty station to earn award of their ``3-level.'' Once a member 
completes a training level, they enter upgrade training for the 
subsequent level, provided they have attained the associated rank for 
that skill. The proper training foundation; supervised and certified 
up-grade training on the job or at technical schools; and grade-skill 
linkages ensure individuals are given the appropriate tools to perform 
the increasingly more complex and difficult tasks set before them.
    Question. Has the moral character or physical standards of new 
recruits declined in recent years?
    Army Answer. Rise in youth crime, reduced fitness of the youth 
population and other medically or morally disqualifying conditions 
(e.g. asthma, ritilin usage, tattoo policies, etc.) certainly make the 
individual recruiter's job more difficult, but we have not lowered our 
recruiting standards to accommodate these trends. The Army has, in 
fact, increased the standards for enlistment. Our threshold for certain 
waivers has increased as medical policies have been reevaluated or the 
law has changed. Our waiver trends for both moral and physical 
standards are low and have remained unchanged. Additionally, to assist 
enlistees in preparing for the physical requirements of basic training, 
we include physical fitness programs as a mandatory component of our 
Delayed Entry Program (DEP) training events.
    We do need your help in obtaining legislation that requires the 
release of criminal history information from all local jurisdictions. 
Release should include juvenile as well as adult criminal records.
    Navy Answer. The Navy has not experienced a decline in moral 
character or physical standards since all who enlist must meet set 
standards. The Navy most recently raised standards by requiring the 
drug and alcohol test at time of enlistment as well as upon arrival at 
Recruit Training Center.
    Marine Corps Answer. The moral character of our recruits has not 
declined in recent years. Our moral standards and associated waiver 
procedures continue to be the basis for training our recruiters and 
keeping them focused on the right types of applicants.
    Consistent with youth trends in general, the marijuana usage rate 
among applicants has risen in recent years and correspondingly more 
waivers are being granted for experimental marijuana use than in 
previous years. Applicants with experimental drug use are carefully 
screened and granted waivers only if they are otherwise exceptionally 
well qualified.
    The waiver process is investigative in nature and is designed to 
collect comprehensive information (both good and bad) from a variety of 
sources before a waiver determination is made. We look at the ``whole 
person'' when evaluating a waiver. Those who receive moral/drug waivers 
are considered to have favorable qualities that outweigh their past 
indiscretions and as such are considered to be of sufficiently sound 
moral character to successfully make the transformation into a United 
States Marine.
    The physical conditioning of our recruits starts immediately upon 
enlistment into the Delayed Entry Program. Anywhere from 5-10% of 
applicants cannot pass an Initial Strength Test (IST), requiring our 
recruiters to work with them during their time in the DEP to prepare 
them physically for recruit training. Prior to shipping to recruit 
training, all recruits are required by Marine Corps Order to pass the 
IST. The percentage of recruits failing the IST at the recruit depots 
is small. Those failing are put into a physical conditioning platoon 
where they typically make quick strides and enter training in less than 
three weeks. Clearly our recruiters are faced with a more sedentary 
recruiting market. This challenge is overcome through proper screening 
and progressive preparation of the recruit while in the Delayed Entry 
Program.
    Air Force Answer. No. The moral character and physical standards of 
new recruits appears to be increasing. The number of Air Force recruits 
requiring moral waivers have been declining since fiscal year 1993. The 
Air Force experienced a 17 percent drop in moral waivers from fiscal 
year 1993 (23.5 percent) to fiscal year 1997 (6.5 percent). We've also 
experienced a 12 percent decline since fiscal year 1995 in the number 
of recruits that attrit from basic military training for medical or 
physical reasons.

                            Recruiter Force

    Question. Describe to the Committee the size of your recruiting 
force, the number of recruiting stations you have across the country 
and overseas, and the percent of your stations you operate that are co-
located with another recruiting service.
    Army answer. The U.S. Army Recruiting Command is authorized 5,400 
but is staffed at 5,961 on production Regular Army recruiters and 1,358 
on production Army Reserve recruiters working from 1,568 recruiting 
stations worldwide. Outside of the Continental United States (OCONUS) 
recruiting locations include Alaska, Hawaii, South Korea, Japan, 
Panama, Puerto Rico, American Samoa, Guam, the Virgin Islands, and 
Germany. Of the 1,568 recruiting stations, 400 are Army only recruiting 
stations. The remaining 75 percent are co-located with at least one 
other recruiting service. The Army additionally has recruiters 
positioned at selected Army installations and other locations to meet 
other recruiting requirements, such as our medical specialty missions, 
our Special Forces officer and enlisted missions, our Army Reserve 
Chaplain missions, and our Regular Army and Army Reserve technical 
warrant officer missions.
    Navy Answer. The number of on board production recruiters as of mid 
March is 3,668. The projected number by the end of the fiscal year is 
4,000. There are 1,1195 recruiting stations and 91 percent are co-
located with another recruiting service.
    Marine Corps Answer. The recruiting force consists of 2,650 
production recruiters, with 744 support personnel. Our 2,650 recruiters 
work out of 1,458 Recruiting Sub-Stations (RSS) located across the 
country. 11 percent of the RSSs are Marine Corps only offices, 16 
percent are located with one other service, 22 percent are located with 
two other services, and 51 percent are located with three other 
services.
    Air Force Answer. With the recent addition of 80 new recruiter 
authorizations and the transfer of recruiters from overhead positions 
to production positions, we've increased the number of enlisted program 
recruiters from 1,093 to 1,209. Our production recruiters are at 1,093 
locations nation-wide. Eighty-three percent or 895 of these locations 
are shared with recruiters from other services.
    Question. What is the percentage of the Department of Defense (DoD) 
Active duty and Reserve mission your recruiters must recruit?
    Army Answer. This fiscal year, the Army must recruit 71,950 Active 
duty enlisted soldiers, 47,940 Army Reserve soldiers, and 56,638 Army 
National Guard soldiers for a total of 176,528. The DoD enlisted 
recruiting requirement for this year exceeds 337,000. The Army must 
recruit over 52 percent of the total DoD enlisted recruiting goal to 
meet our requirements. The Active Army recruiting goal is almost 38 
percent of the total Active duty DoD enlisted requirement, and the 
Reserve component goal is almost 72 percent of DoD's total requirement.
    Navy Answer. The fiscal year 1998 active duty Navy requirement is 
28.7 percent of the DoD active duty requirement. The fiscal year 1998 
reserve Navy requirement is 10 percent of the DoD requirement.
    Marine Corps Answer. Regular mission is 84.46 percent of total 
force mission; reserve mission is 15.54 percent of the total force 
mission. The Marine Corps' regular mission is 17.6 percent of total DOD 
active duty accessions during fiscal year 1998.
    Air Force Answer. The active Air Force portion of the overall 
fiscal year 1997 active DoD prior and non-prior service recruiting goal 
is 15.3 percent (DoD goal: 197,081, Air Force: 30,310). In fiscal year 
1998 the Air Force's share of the overall goal is 15.7 percent (DoD 
goal: 192,465, Air Force goal: 30,300).
    The Air National Guard (ANG) does not have a DoD mandated accession 
goal. Their fiscal year recruiting goals are based on projected 
programmed end strength, current vacancies, and projected losses for 
the upcoming fiscal year. For fiscal year 1998 the ANG goal is:

Officers:
    Prior Service.................................................   800
    Non Prior Service.............................................    50
        Total.....................................................   850
Enlisted:
    Prior Service.................................................  5500
    Non Prior Service.............................................  2850
        Total.....................................................  8350
                                                                  ______
          Total Projected ANG Gains for fiscal year 1998.......... 9,200
                        =================================================================
                        ________________________________________________

    The Air Force Reserve (AFR) does not have a DoD mandated accession 
goal. In fiscal year 1997, the AFR accessed 8,314 personnel (7254 were 
enlisted and 1060 officers). Of the total number accessed over 7200 
were prior service. For fiscal year 1998, the AFR recruiting goal is 
11,069.
    Question. Describe the time demands on a recruiter in order to have 
a successful recruiting mission. How many days/hours a week do they 
work? Are they under a great deal of stress?
    Army Answer. Our recruiters report that, on average, they spend at 
least 60 hours each week on the job. In general, they work six days a 
week. The job our recruiters are asked to do is a tough one. They are 
accountable for recruiting individuals who are fully qualified for 
military service, for maintaining their qualifications, and for 
mentally and physically preparing these enlistees for their basic 
training experience. At the same time, these noncommissioned officers 
must also remain tactically and technically proficient in their own 
right. All of this takes time.
    Recruiting is a stressful job. Most of the stress of recruiting 
relates to the job itself and the environment in which our recruiters 
operate. Our recruiters are selected from the Army's best 
noncommissioned officers (NCOs). Even under the best circumstances, 
they are told ``no'' more than they are told ``yes.'' This alone is 
stressful to NCOs accustomed to success. To address this we have a 
first class training program to prepare our recruiters for the work 
they are asked to perform, and we have a sustainment training program 
to help them maintain their proficiency. Our recruiters do not have the 
luxury of standing down to train. It is something we have to make part 
of our day-to-day work. This has been a point of special emphasis this 
past year. Success is a large part of a person's attitude toward their 
work. Training and leading our recruiters to success has a direct 
impact on morale.
    In the past several years, the Army has also made substantial 
investments in establishing a robust quality of life network and other 
programs to tackle the issues of recruiter and family support. These 
have been essential in ensuring we take care of the needs of our 
soldiers and families who are separated from the established military 
programs at our installations.
    Navy Answer. Recruiters do put in a lot of time. The 1996 DoD 
Quality of Life Recruiter Survey reported that 56 percent of recruiters 
(all services) worked 60 hours a week or more. 69 percent of recruiters 
reported voluntarily not taking leave due to job demands. Although the 
current environment of low unemployment and low propensity towards 
military service has made it difficult for recruiters, the Navy is 
actively working to enhance quality of life for Navy recruiters and 
their families.
    Marine Corps Answer. The typical recruiter's day starts at 0730 and 
ends around 1900-2000 in the evening. The evening period (1800-2000), 
while clearly beyond ``normal'' working hours, is critical to the 
recruiter's success. It is during this period when potential applicants 
are home from school or work and when parents are home to discuss 
enlistment options with their children. The typical recruiter also 
works a half day on Saturday . . . often this time is used to work on 
the physical conditioning of recruits in the Delayed Entry Program. 
Operations on Sunday are very limited, but are occasionally necessary 
when recruiters have to take applicants or shippers to the MEPS for 
Monday morning processing or participate in planned Family Day 
activities as part of our transformation program.
    The latest DoD Recruiter Survey supports the observation that our 
recruiters work very hard. According to the survey, Marine Corps 
recruiters were the largest group, by percentage (77 percent), to 
report having worked more than 61 hours per week. As a result, 
recruiter quality of life (QOL) remains a concern. The Marine Corps is 
making progress in many areas to better the recruiters QOL and make 
recruiting duty a more sought after assignment. Major initiatives 
include enhanced awards and recognition programs, cost of living (COLA) 
offsets, enhanced medical, dental and child care, and preferential 
housing and spouse employment programs.
    Air Force Answer. Recruiters face a challenging environment. 
Propensity to enlist in the Air Force has stabilized, but remains low. 
The robust economy with low unemployment creates intense competition 
for high quality youth. The typical recruiter works up to 6 days a 
week. Most recruiters work well into the evening and on weekends to 
accommodate prospective applicants. A recent DoD survey of recruiters 
reported that more than \1/3\ of Air Force recruiters work 60 or more 
hours a week. This is a 32 percent increase since 1989.
    The Air Force has taken a number of actions to address the 
challenging recruiting environment. We've more than doubled our 
advertising budget since the early 90s ($7.7 million FY93 to $17.1 
million FY98). Through the addition of 80 new authorizations and the 
transfer of recruiters from overhead positions, we've increased the 
number of enlisted program recruiters from 1,093 to 1,209.
    In addition, we've pursued a number of initiatives to improve the 
quality of life for recruiters and their families. Cellular phones and 
lap top computers have recently been acquired to improve recruiter 
connectivity and effectiveness in the field. We recently introduced a 
screening tool for hiring recruiters, call the Emotional Quotient-
inventory questionnaire. Preliminary indications show that this tool 
will be useful in predicting a future recruiter's potential. The ``home 
basing'' program provides priority billeting, medical and dental 
appointments and other red carpet treatment when geographically 
separated recruiters and their families visit Air Force bases. The 
Leased Family Housing Program provides recruiters assigned to a high 
cost area with safe and affordable housing.
    Question. Enlistment bonuses and educational incentives are 
examples of tools used by recruiters to attract personnel to hard-to-
fill skills. Is your Service providing the maximum levels for 
enlistment bonuses and the College Fund program? If so, what is the 
average enlistment bonus provided, and the amount provided for the 
Services' College Fund? What other incentives are you using to achieve 
your ``fill rates''? Has your recruiting mission improved?
    Army Answer. Yes. Both of these amounts are the maximum amounts 
currently allowed under law. We offer the maximum enlistment bonus of 
$12,000 in five of our most critical military occupational specialties. 
We offer the maximum amount of $40,000 for the Army College Fund in 19 
of our priority skills. Both of these incentives require an enlistment 
term of at least four years.
    The average enlistment bonus for fiscal year 1997 was roughly 
$5,400 (budget/bonus takers). However, this amount is misleading as we 
include residual payments to previous year takers in the fiscal year 
1997 budget. In fiscal year 1997, the majority of College Fund takers 
enlisted for four or more years. Payments for the College Fund are 
based on actuary rates, determined by a Department of Defense Board. 
The average payment into the Educational Benefits Trust Fund was 
roughly $3,630 in fiscal year 1997. Through February 1998, that amount 
has increased slightly to $3,930.
    We also offer to pay up to $65,000 of a soldier's qualifying 
student loans through the Loan Repayment Program. Other incentives 
include guaranteed skill training, station of choice, Airborne and 
Ranger training, a guarantee for placement in a future college through 
the Army's Concurrent Admission Program, and accelerated promotion for 
education and scouting accomplishments.
    We have achieved both our quantity and quality marks through March 
1998. We feel that many of the actions we took to boost production in 
fiscal year 1997 have set the conditions for success in fiscal year 
1998.
    Navy Answer. Navy has a range of enlistment bonuses from $1,000 to 
$12,000 for Nuclear Field ratings. Most of our other high technical 
ratings receive a bonus between $7,500 and $9,500 during the winter and 
spring months. The amounts for the bonuses decrease during the summer 
when it is traditionally easier to recruit. The Navy College Fund is 
$40,000 for Nuclear Field ratings and $30,000 for other qualified 
individuals going into other Navy ratings. There are no other 
incentives to achieve ``full rate'' for fiscal year 1998. Second 
quarter has improved over first quarter as far as meeting the 
recruiting mission.
    Marine Corps Answer. The Enlistment Bonus (EB) and the Marine Corps 
College Fund (MCCF) are critical programs used to recruit qualified 
applicants into Marine Corps skill groups. The fiscal year 1998 MCCF 
program is budgeted at $4.1 million. That equates to 1,842 contracts or 
5.4 percent of accessions. The funding also equates to less than 0.70 
college fund programs per recruiter. The fiscal year 1999 MCCF program 
is budgeted at $4.4 million. But with increased funding cost, it 
affords only 1,826 contracts or 5.2 percent of accessions, still less 
than 0.70 college fund programs per recruiter. Due to these constrained 
resources, the MCCF is a tightly controlled program and its 
effectiveness is limited by funding levels. If funds became available, 
an additional $5.9 million would almost double the number of high 
quality recruits, providing for 2,448 enlistments and promoting a 
greater quality spread among all occupational fields.
    Our EB program is funded at $1,000, $2,000 and $3,000 bonus levels. 
The fiscal year 1998 and fiscal year 1999 funding for EB is only $5.1 
million. General enlistment bonuses of $1,000 allow recruiters to 
tailor an enlistment package for an applicant if they are a ``hard 
sell.'' These are few in number, and are not always used, but must 
remain an option for recruiters. February through May (Spring) bonuses 
of $2,000 are essential to making mission during the most difficult 
recruiting trimester. The Spring bonus allows recruiters to sell 
applicants on a ship date to help meet shipping goals, which in-turn 
assists the Marine Corps unit cohesion program and maintains an even 
flow of recruits to follow-on schools for training. Specific 
occupational field bonuses of $2,000 and $3,000 are offered in high 
tech, hard to fill occupational fields like Signals Intelligence, 
Aviation Operations, and Electronics Repair. If funds became available, 
an additional $3.0 million would provide 1,000 enlistment bonuses of 
$3,000 each and would help nullify shortfalls in classification of high 
tech skills and possibly negate the need for SRBs in the future.
    Other enlistment incentives include the Quality Enlistment Program. 
Under this program, recruits meeting certain education or aptitude 
requirements can qualify for guaranteed ``high tech'' occupational 
assignments and/or guaranteed assignment to preferred geographical 
location. Additionally, early promotion to the rank of Private First 
Class (E-2) can be awarded to applicants with exceptional backgrounds, 
such as college education and Junior ROTC experience.
    Marine Corps Recruiting Command's mission attainment has steadily 
improved over the last 33 months through the hard work, determination, 
and personal sacrifice of our recruiters to meet accession 
requirements. MCCF and Enlistment Bonuses have contributed to improved 
attainment of high tech occupational field quotas. Marine Corps bonus 
programs and the MCCF are lean by comparison to the other services; it 
is essential that relative `parity' be maintained among the services in 
these programs to ensure that the playing field remains reasonably 
level and comparative advantages are not created in bonuses or college 
funds. To date, Marine Corps recruiters have successfully met all 
accession quality and quantity requirements for the past 33 consecutive 
months.
    Air Force Answer. The Air Force currently offers a bonus for 
individuals enlisting into Combat Controllers, Pararescue, Explosive 
Ordinance Disposal, and Crypto-Linguist (Germanic, Romance, Far East, 
Mid-East, and Slavic) career fields. The average bonus received is 
$4,000. Although we continue to meet our Crypto-Linguist, Explosive 
Ordinance and Pararescue (PJ) recruitment targets, the Combat 
Controller (CCT) career field still represents a challenge for our 
recruiters. In fiscal year 1995 and fiscal year 1996, we achieved 78 
percent of our CCT goal and improved to 99 percent in fiscal year 1997. 
We've implemented a number of programs to enhance both CCT and PJ 
recruiting including specialized recruiting brochures, posters and 
videos. We have established specific locations and procedures for 
administering the physical aptitude and stamina test required for 
classification in the PJ/CCT career field. Specialized recruiting teams 
were created and PJ/CCT information has been included on the Air Force 
Recruiting Service's World Wide Web page. Finally, we provide 
specialized PJ/CCT recruiting training for our new recruiters.
    We currently do not offer the College Fund Program to new recruits 
but offer the Montgomery GI Bill. Everyone enlisting in the Air Force 
is enrolled in the program unless they make a conscious decision to 
dis-enroll shortly after they enter active duty. Members can use MGIB 
benefits after 36 months of continuous active duty. They are eligible 
to receive up to $439.00 a month for a 36 month period while enrolled 
in a post-secondary program. With a 96 percent participation rate, it's 
proven to be an effective recruiting tool. Another important recruiting 
incentive is the Community College of the Air Force. This program is 
unique to the Air Force and enables airmen to earn an associate degree 
during their first enlistment.

                            Retention Issues

    Question. Career uncertainties, longer periods away from home, pay 
and benefit concerns, quality of life issues, and slower promotions are 
key factors affecting decisions of individuals to reenlist in the 
military. Approximately 51 percent of enlisted personnel have less than 
6 years of service, 45 percent have 6 to 19 years of service, and 4 
percent have more than 20 years. More than half of the enlisted force, 
53 percent, is in pay grades E1 through E4. What is your service doing 
to address and maintain a viable retention program?
    Army Answer. The Army retention program is a commander's program. 
Commanders and Army Career Counselors are required by policy to 
interview soldiers on a regular basis to insure they are properly 
advised as to eligibility criteria, retraining opportunities, benefits 
programs, and other factors impacting on an Army career. Additionally, 
unit reenlistment training is mandated for all soldiers at least once 
annually. Soldiers also desire to be challenged and to pursue civilian 
education opportunities. Commanders throughout the Army tie education 
incentives into local reenlistment programs. The Army offers choice of 
duty station, either in the continental United States or overseas, and 
retraining options, consistent with available vacancies in the 
soldier's specialty. The Army has also shifted an additional $10,00,000 
into the Selective Reenlistment Bonus budget at the start of this 
fiscal year to influence reenlistments in shortage and critical 
specialties and closely monitors promotions to assure soldiers are 
afforded reasonable opportunities to progress. The bottom line is that 
the Army is doing everything possible to keep our force of skilled, 
well trained, and well-led soldiers who are capable of adapting to the 
complex, dangerous, and ever-changing situations that our soldiers face 
today. But this may not be enough. Our young noncommissioned officers 
and leaders are now beginning to ask if it is worth it to stay in the 
military for a 20-year career. The two major concerns that lead to this 
is the ever-growing pay gap between military and civilian sectors and 
the post-1986 retirement system.
    Navy Answer. Navy has undertaken many initiatives to improve 
retention. We know that the most effective retention tools include 
increasing retention bonuses, improving advancement opportunity, 
maintaining PERSTEMPO/OPTEMPO within established goals, particularly 
between deployments, examining compensation effectiveness, and 
continuing our focus on quality of life improvements. We have already 
instituted a number of initiatives which include turning off our early 
out and first term conversion programs; continuing the use of the 
Temporary Early Retirement Authorization (TERA) to reduce overages 
which are stagnating Navy-wide advancement opportunity; and instituting 
a 3-prong effort to strengthen the effectiveness of our Selective 
Reenlistment Bonus program. SRB improvements include: (1) gradually 
increasing the percentage of reenlistees receiving SRB, commensurate 
with pre-drawdown retention requirements; (2) increasing the Navy's 
maximum award levels to the authorized maximum of $45,000; and (3) 
seeking your support to lift the 10 percent cap on the number of 
Sailors to whom we can pay the maximum bonus.
    Marine Corps Answer. We maintain a viable retention program through 
the use of our Enlisted Career Force Controls (ECFC) program. This 
program is designed to actively shape the inventory of Marines by grade 
and MOS. A fundamental element of the ECFC is our First Term Alignment 
Plan (FTAP), whereby we set the number of first term reenlistments 
needed to meet our career force needs. We have met our FTAP goals for 
each of the last four years, and anticipate easily achieving the goal 
this year.
    The Selective Reenlistment Bonus Program (SRBP) assists in 
retaining the required number of first term reenlistments to meet the 
FTAP goal. Without the aid of the SRBP we would not be able to retain 
the requisite number of first term Marines to fulfill our career force 
requirements. Overall, the SRBP and the FTAP work hand in hand to meet 
our retention requirements.
    Air Force Answer. The Air Force is addressing retention issues by 
reducing tempo, improving care for families of deployed personnel, 
emphasizing Quality of Life programs and getting the facts out to our 
members. We're listening to our members--tempo, along with compensation 
and benefits, are cited by members as the most pressing retention 
issues.
    To reduce tempo, we have reduced time in JCS exercises by 15 
percent, initiated post-deployment stand downs and reduced aircraft 
rotations in Air Combat Command from 90 to 45 days. We also plan to 
reduce Operational Readiness Inspections (ORIs) by 10 percent in fiscal 
year 1998 and by 30 percent in fiscal year 1999 through inspection 
credit during real-world deployments. Quality Air Force Assessments 
were also terminated in fiscal year 1998.
    Recently, Air Force leadership revalidated our seven Quality of 
Life priorities to help our troops--pursue fair and competitive 
compensation and benefits; balance the impact of high tempo; provide 
access to quality health care; provide access to safe, adequate and 
affordable housing; preserve a stable retirement system and benefits; 
enhance community support; and expand educational opportunities.
    The Chief of Staff instituted a NOTAM (Notice to Airmen) program to 
get the word to the field on key issues. ``People First'' articles in 
each base paper also continue to spread the word on personnel programs.
    There is no magic cure for retention. The combination of many 
programs are what will influence our people to stay.
    Question. What incentives are needed to retain high quality 
personnel in each service?
    Army Answer. Retaining quality soldiers requires a competitive 
benefits and entitlement package, coupled with job satisfaction and a 
reasonable quality of life. Incentives vary with the individual soldier 
and often with the soldier's occupational specialty. Adequate Selective 
Reenlistment Bonus budgets are essential to induce soldiers in arduous 
or highly technical specialties to remain in the Army. Spousal 
satisfaction is a major factor among married soldiers. Adequate 
housing, medical care and post facilities, coupled with a competitive 
pay and benefits and retirement package, are the foundations upon which 
the retention program is based. The only incentives other than monetary 
are those geared toward soldiers' desires, such as a continental United 
States and overseas stations of choice, training of choice, and local 
education incentives. All these programs are subject to constraints of 
mission, occupational speciality, and budget.
    Navy Answer. The strong civilian economy and historic low 
unemployment have created a highly competitive civilian job market. 
These conditions, coupled with an increasing gap in pay and overall 
compensation, help push Sailors toward civilian jobs. We support 
soundly based Navy-wide compensation initiatives, as well as lifting 
the cap on the number of high tech Sailors to whom we can offer top 
Selective Reenlistment Bonuses. Additionally, as navy transitions to a 
steady state force, force shaping tools will still be necessary. 
Extending authorization for the temporary early retirement (TERA) 
program would be highly beneficial, enabling navy to reduce specific 
rating overages and improve Navy-wide advancement opportunity. Low 
advancement opportunity continues to be the number one dissatisfier on 
Navy exit surveys.
    Marine Corps Answer. Currently our career force continuation rates 
meet or exceed our planned fiscal year 1998 estimates. However, with 
the current economic growth and low unemployment rates it is becoming 
exceedingly difficult to compete with the civilian sector.
    One incentive we utilize to the greatest extent possible is the 
Selective Reenlistment Bonus Program (SRBP). Generally, we have 
difficulty retaining our highly technical Military Occupational 
Specialties (MOSs). Offering cash incentives (SRBP) to these MOSs 
assists us in retaining enough Marines to maintain our full combat 
capability.
    Non-monetary incentives are also an important factor in retaining 
quality Marines. Challenging work, real responsibility, and a sense of 
appreciation for their sacrifices are all factors in the retention 
equation.
    Air Force Answer. The Air Force currently utilizes two monetary 
incentives to retain high quality personnel, the Selective Reenlistment 
Bonus (SRB) and Special Duty Assignment Pay (SDAP) programs.
    The SRB program provides monetary incentives encouraging 
reenlistment in certain skills to sustain the career force objectives. 
This program also encourages first-term airmen to retrain into our 
shortage skills.
    The SDAP program provides monetary incentives for those assigned to 
extremely difficult and demanding duties with an unusual degree of 
responsibility (e.g., Combat Controllers, Pararescue, Recruiters, and 
Military Training Instructors).
    These two vital programs encourage high quality personnel to remain 
or volunteer to serve in those specialities.
    The Air Force is participating in an OSD-led Aviation Compensation 
Review and supports a career pay for enlisted aircrew members. The 
fundamental idea behind the Career Enlisted Flight Incentive Pay 
(CEFIP) is to increase compensation for career enlisted aircrew members 
to attract and retain career aviation enlisted personnel.
    Question. What percentage of first and second termers eligible for 
reenlistment does your service try to retain?
    Army Answer. Retention in the Army is not based on a preset 
percentage, but is determined by mandated endstrength, attrition rates, 
and the Recruiting Command's new accessions. The historical (pre-
drawdown) initial term retention rate of 42 percent of soldiers 
reaching their separation date is the generally accepted gauge of 
success. For mid-career soldiers (those who have reenlisted at least 
once, with less than ten years active service), the historic rate used 
is 70 percent. The actual percentage of each category that must be 
retained may actually fluctuate based on factors mentioned above. Since 
fiscal year 1994, the Army has had to retain approximately 48 percent 
of initial termers and 74 percent of mid-careerists to maintain end 
strength.
    Navy Answer. Navy does not have specific reenlistment goals. We 
have long term, steady state goals for 1st, 2nd and 3rd term retention 
of 38 percent, 54 percent and 62 percent. They are not goals for fiscal 
year 1998 or fiscal year 1999 and may not even be achievable by the 
year 2000, depending on uncontrollable factors such as civilian pay and 
unemployment rates.
    Marine Corps Answer. Our first term reenlistments are based on our 
career force continuation rates and career force (E5-E8) structure. The 
Marine Corps ideal force structure is based on a 32 percent enlisted 
career force structure (four or more years of service) and a top 6 
grade structure of 52.2 percent. As such, we need to retain roughly 
4.600 first term Marines annually. Approximately 21-24 thousand first 
term Marines are eligible for reenlistment; therefore, our annual first 
term reenlistment goal is between 19 and 22 percent.
    Since our first term reenlistments are based on career force 
continuation rates we have no second term reenlistment goal. Career 
force Marines may be granted reenlistment authority as long as they 
continue to meet our high reenlistment standards and service limit 
criteria.
    Air Force Answer. Our overall reenlistment goal for first term 
airmen who are reenlistment eligible is 55 percent and 75 percent for 
second term airmen.
    Question. Are the percentages for reenlistment declining? If so, 
explain how it has changed.
    Army Answer. Prior to fiscal year 1992 (fiscal years 1984-1991), 
the Army's initial term average retention rate was 42 percent. The mid-
career average retention rate was 70 percent.
    In fiscal year 1992, the rates fell to 30 percent and 62.5 percent, 
respectively, which was expected since various drawdown programs 
purposely reduced retention. Rates rose in fiscal year 1993, again as 
expected, since soldiers who did not voluntarily participate in early 
out programs were inclined to reenlist. The fiscal year 1993 rates rose 
to 46.1 percent and 75.6 percent, respectively. Initial term rates have 
remained steady since then, steadily increasing to the current 54 
percent.
    Mid-career rates have remained at or above the pre-drawdown 70 
percent level since fiscal year 1993, but there are some concerns. 
After a high rate of 75.6 in fiscal year 1993, the rate declined to 
73.8 percent in fiscal year 1994 and 72.8 percent in fiscal year 1995.
    In fiscal year 1996, the rate fell to the pre-drawdown level of 70 
percent. Bonus reductions and slow promotions, caused by Military 
Personnel Account shortfalls were major factors in the rate decline. 
Bonuses were increased in fiscal year 1997 and fiscal year 1998 and 
promotions have also been on track since fiscal year 1997. We also 
permitted soldiers in grades E4 to remain on active duty an additional 
two years (10 years rather than 8 years). All these factors resulted in 
higher mid-career retention in fiscal year 1997 (75 percent) and fiscal 
year 1998 through the first quarter (79 percent). The Army believes 
rates will level off. Volatile endstrength and outside factors are 
always a concern, but the recent higher rates have been encouraging. 
However, the caution light is still flashing and we must continue to 
watch and assess. The current pay package, coupled with the retirement 
system of post-1986, is beginning to cause noncommissioned officers to 
question if it is really worth it to stay in for a 20-year or more 
career.
    Navy Answer. Reenlistment rates for first, second and third termers 
all dropped from fiscal year 1995 thru fiscal year 1997. First quarter 
fiscal year 1998 reenlistment figures are on an upward trend for first 
and second termers, while third term reenlistment rates were impacted 
by the front loading of almost one thousand fiscal year 1998 TERA 
retirements:

                              [In percent]
------------------------------------------------------------------------
                                     1st term     2nd term     3rd term
------------------------------------------------------------------------
Fiscal year 1995.................         57.7         60.3         92.3
Fiscal year 1996.................         54.0         58.7         84.9
Fiscal year 1997.................         50.4         57.3         82.9
Fiscal year 1998 thru December...         59.2         60.6         81.2
------------------------------------------------------------------------

    Marine Corps Answer. Our first term reenlistments are based on our 
career force continuation rates and career force (E5-E8) structure. 
Consequently, the Marine Corps only reenlistment goal is for first term 
Marines. With a relatively stable career force structure (52.2 percent 
in the top 6 enlisted ranks) our first term reenlistment goal remains 
relatively constant between 19 and 22 percent of our first term EAS 
population. Over the past four years we have achieved our first term 
reenlistment goal and our current statistics indicate that we will 
attain our fiscal year 1998 goal.
    Air Force Answer. Yes. The first-term reenlistment rate is down 5 
percent over the past 5 years (fiscal year 1993: 61 percent to fiscal 
year 1997: 56 percent), but still above the goal of 55 percent. The 
first-term reenlistment rate for the first two quarters of fiscal year 
1998 is steady at 56 percent.
    The second-term reenlistment rate has declined 11 percent over the 
past 5 years (fiscal year 1993: 82 percent to fiscal year 1997: 71 
percent), dropping below the goal of 75 percent in fiscal year 1997. 
The second-term reenlistment rate for the first two quarters of fiscal 
year 1998 is 70 percent.
    The career airmen reenlistment rate has declined 2 percent over the 
last five years (fiscal year 1993: 97 percent to fiscal year 1997: 95 
percent) and has held steady at the goal of 95 percent into the first 
half of fiscal year 1998.
    We're closely monitoring second-term reenlistment--the caution 
light is on, but we're not hitting the panic button. The Air Force has 
more than doubled the number of skills eligible for Selective 
Reenlistment Bonuses (fiscal year 1995--41 skills using $24 million, 
fiscal year 1998--88 skills using $33 million) to help encourage 
members to reenlist. We are also aggressively working various Quality 
of Life programs. The combination of all these programs are designed to 
help alleviate the reenlistment problem.
    Question. At what percentage do you need to maintain your second 
term reenlistment rates in order to avoid gaps in your mid-level 
experienced people?
    Army Answer. The actual retention rate needed to sustain the mid-
level force fluctuates somewhat. Based on recent experience, however, a 
retention rate of 74 to 75 percent appears to be the rate at which 
desired manning levels can be achieved. Currently, the Army is 
attaining desired retention rates, but bonus and incentive programs 
must be maintained at or above current levels to sustain those rates. 
Additionally, to maintain the right force structure, we must have 
soldiers in the right Military Occupational Specialties and skill 
levels reenlist.
    Navy Answer. Navy does not manage to specific reenlistment rates. 
Second term retention is about four percentage points less than 
desirable in the steady state, however, Navy is still carrying a 
surplus of Sailors with nine years or more of service. We will continue 
our force shaping initiatives, including judicious use of the Selective 
Reenlistment Bonus, to target specific skill shortages.
    Marine Corps Answer. The Marine Corps maintains a second term 
reenlistment rate of approximately 60 percent. If there are any 
fluctuations in second term reenlistments, the Enlisted Career Force 
Control manager adjusts the first term reenlistments as necessary. As 
such, the Marine Corps' first term reenlistments are based on our 
career force continuation rates and career force (E5-E8) structure. 
Currently our career force continuation rates are relatively high and 
our career force top 6 structure remains constant at 52.2 percent. 
Consequently, the Marine Corps focuses its reenlistment efforts on the 
first term force.
    First term reenlistments are governed by the First Term alignment 
Plan (FTAP). The annual FTAP determines the number of first term 
Marines (by MOS) required to reenlist to support our career force 
needs. Over the past two fiscal years the FTAP reenlistment requirement 
has remained steady at approximately 4,600 Marines.
    The Selective Reenlistment Bonus Program (SRBP) assists in 
retaining the required number of first term reenlistments to meet the 
FTAP goal. Without the aid of the SRBP we would not be able to reenlist 
the requisite number of first term Marines to fulfill our career force 
requirements (FTAP). Overall, the SRBP and the FTAP work hand in hand 
to meet our retention requirements.
    Air Force Answer. From an aggregate perspective, our goal is to 
retain 75 percent of our reenlistment eligible second term members.
    Question. What impacts do high turnover rates have on unit cohesion 
and readiness?
    Army Answer. High turnover rates impact on the ability to keep 
combat ready teams and crews together for an extended period of time. 
However, Army planning takes the historical turnover rate into account.
    Currently, the Army is forced to pay special attention to the 
recent increased rates of unit deployment tempo (DEPTEMPO) which have 
resulted from an increased number of contingency operations, such as 
Bosnia and Kuwait. Careful management of both the units selected for 
training and operational deployments, and the programs that assign 
soldiers to/from those deploying units, has minimized the adverse 
impact of DEPTEMPO and turnover rates on either unit readiness or 
quality of life.
    Navy Answer. Clearly, a high turnover rate can be disadvantageous, 
however, its impact is dependent upon the size of the unit. Individual 
units work very closely with the Navy's distribution system, as well as 
their Fleet type commanders, to minimize the impact of personnel 
turnover on unit readiness.
    Marine Corps Answer. The Marine Corps is, by nature, a young force. 
Over 69 percent of our enlisted Marines are serving in their first 
term, resulting in a high turnover rate which is detrimental to unit 
cohesion. To counter this, we have implemented a ``Unit Cohesion 
Program'' to foster unit integrity, improve training and enhance 
readiness. The Unit Cohesion Program seeks to optimize the initial 
enlistments of our young, first term force by stabilizing the Marines 
in a unit for the duration of their initial enlistment. We have found 
that the productive life-cycle of an infantry Marine (after boot camp 
and follow-on MOS training) is about 42 months. To foster cohesion 
during this life-cycle, we are forming squads of Marines in boot camp 
and keeping them together through MOS training and subsequent 
assignment to an infantry battalion where they are likely to 
participate in two, six-month deployments.
    The majority of Marines enlist for a four year contract and most of 
these Marines do not seek reenlistment. Therefore, it is unlikely that 
most young people would be willing to commit to a longer initial 
contract of five or six years.
    Air Force Answer. High turnover rates increase turbulence and the 
training burden in an operational unit. While this has a minor impact 
on unit cohesion and readiness, it has a large impact on the overall 
workload in a unit. Our people must pick up the slack for their fellow 
workers who are in-processing, out-processing, in-transit, or in 
training. In a time of already high TEMPO this additional workload is 
difficult to manage.

                             Deployment Pay

    Question. Last year, the Authorization Conference included language 
in their bill (Section 605) that created a new ``deployment pay'' for 
service members. This new pay is intended to protect a member's loss of 
compensation when they are on temporary duty (TDY), when they 
participate in training exercises, or while under field conditions at 
their permanent duty station. Are you aware of this new ``deployment 
pay'', and if so, would you give us your opinion on whether or not this 
additional compensation is needed or necessary?
    Army Answer. The Army is aware of the language found in Section 605 
and its mandate that the total amount of a service member's elements of 
compensation shall not be less when a member is temporarily assigned 
away from their permanent duty station or in duty under field 
conditions at their permanent station. Although this language did not 
create a new pay, it does require the services to ensure a member's pay 
is not lowered due to the temporary assignment. This mandate was 
difficult for the services to comply with due to conflicting language 
found in Section 602. The Department of Defense, therefore, redefined 
field duty, and the Army is preparing implementing guidance. 
Coincidentally, the Department of Defense's language for both Basic 
Allowance for Subsistence Reform and Basic Allowance for Housing 
Reform, ensured that soldiers would no longer be treated inequitably 
due to deployment. These inequities would have ceased at the end state 
of BAS Reform. Thus Section 605 placed an unforeseen cost and 
administrative burden on the Services, and the Army believes this 
Section of law was not needed.
    Navy Answer. Section 605 mandates that the total daily equivalent 
amount of a member's elements of compensation shall not drop when a 
member is deployed TDY away from their permanent duty station (PDS) or 
in duty under field conditions at their PDS. A member's compensation is 
defined as being made up of Basic Pay, Basic Allowance for Subsistence 
(BAS) and Basic Allowance for Housing (BAH). Congressional intent with 
regard to Section 605 was to provide service members with continuous 
entitlement to both BAS and BAH.
    This compensation initiative was necessary to prevent some enlisted 
Sailors (BAS--E-9 and below, BAH--E-4 and below) from taking a ``pay 
cut'' while deployed. In the past, these Sailors lost their BAS and 
BAH. This practice specifically affected enlisted Sailors in support of 
deployed Air Wings, Helo Dets, Seabees, SEALS, and the Fleet Marine 
Force.
    Marine Corps Answer. Section 605 of the 1998 National Defense 
Authorization Act provides language that ensures the total pay and 
allowances of a service member will not be reduced when the service 
member is assigned to field duty at home station or to temporary duty 
away from home station. The Marine Corps strongly supports section 605 
and believes it is a necessary, positive step in providing parity among 
the Services in deployment benefits, and in maintaining the quality of 
life of our deployed Marines and their families. This legislation will 
prevent Marines from losing their Basic Allowance for Subsistence (BAS) 
when deployed. To support this legislation the Marine Corps just 
published an administrative message (ALMAR 120/98) protecting Marine's 
BAS when deployed, thereby protecting total compensation (i.e., Marines 
will be charged for meals available at a discounted rate when 
deployed).
    Air Force Answer. Section 605 does not authorize deployment pay. 
Rather, it mandates that the total daily equivalent amount of a 
member's elements of compensation shall not drop when a member is 
deployed TDY away from their permanent duty station (PDS) or in duty 
under field conditions at their PDS. A member's compensation is defined 
as being made up of Basic Pay, Basic Allowance for Subsistence (BAS) 
and Basic Allowance for Housing (BAH). Section 605 also protects 
``other pay and allowances under this title'' to which a member may be 
entitled. The net effect of Section 605 was to ensure members maintain 
their BAS when they deploy. No other additional compensation is 
provided as a result of Section 605.
    Question. The Committee understands this is to reimburse a service 
member for loss of his Basic Allowance for Subsistence (BAS) during 
training conducted under field conditions. Is the reduction in BAS 
payments during these training periods causing a financial hardship on 
the service member? Explain.
    Army Answer. The soldier who loses his BAS has greater than the 
cost of food deducted from his pay. This allowance in many cases is 22 
percent of the soldier's salary. Yes, our enlisted soldiers believe 
that loss of the allowance creates a hardship. Although the purpose and 
intent is to provide an allowance for the cost of meals for our 
soldiers, it becomes much more than that--it provides food for the 
entire family. Although members have been losing their BAS under these 
circumstances, guidance is forthcoming that will ensure that all 
members retain their BAS and be charged the discounted rate for meals 
provided. This will ensure that members receiving full BAS will keep 
the pay portion of their BAS. This total comes to about nine dollars a 
month.
    Navy Answer. The purpose of Section 605 was to avoid reductions in 
service members' pay when they are TDY away from their Permanent Duty 
Station (PDS) or in duty under field conditions at their PDS. However, 
Section 602 prohibited payment of BAS when members are in a sea or 
field duty status, but allowed the Secretary of Defense to redefine 
these statutes. The Secretary of Defense recently redefined the 
definition of sea and field duty for the purpose of BAS. The new 
definition allows members to maintain their current BAS payment.
    However, if a member is entitled to full BAS at their PDS and 
perform temporary duty in a sea or field duty status, they are required 
to pay for meals consumed. Charges are based on the basic Government 
meal rate and will allow members to retain a portion of their current 
BAS payment, thus satisfying the dual compensation statutes. Military 
members consider the BAS payment an integral part of their pay, and 
reduction or elimination of the allowance affects their ability to meet 
monthly financial commitments.
    Marine Corps Answer. Section 605 has resulted in the decision to 
allow all Marines to retain BAS while deployed, although they will then 
be charged the discounted rate for meals available. What this means for 
individual Marines is that they retain their $7.43 per day BAS payment, 
but then get charged $6.00 per day for meals that are provided when 
deployed. So the Marine nets $1.43 per day, or about $43 per month. 
This is important because BAS is an integral part of the family budget. 
Previously, when BAS was forfeited entirely during deployment, the 
family budget suffered even though the Marine was being provided meals. 
This new approach will go a long way toward dispelling the notion that 
Marines ``lose pay'' when they deploy.
    Air Force Answer. The stated purpose of Section 605 was to avoid 
reductions in service members pay when they deploy TDY away from their 
permanent duty station (PDS) or in duty under field conditions at their 
PDS. However, Section 602 prohibited payment of BAS when members are in 
field duty or sea duty, but allowed the Secretary of Defense to 
redefine these duties. Secretary of Defense recently redefined field 
duty and sea duty for the purpose of Basic Allowance for Subsistence 
(BAS). The new definition allows members to maintain their current BAS 
payment. However, if a member is entitled to full BAS at home station 
and performs temporary duty in a field duty or sea duty status, they 
are required to pay for meals consumed. Military members consider the 
BAS payment an integral part of their pay, and reduction or elimination 
of the allowance effects their ability to meet monthly financial 
commitments. Maintaining their BAS during deployments helps mitigate 
any negative financial impacts associated with the deployments. 
Allowing members to keep their BAS provides stability in financial 
planning and eliminates any perception that pay is reduced when a 
member deploys.
    Question. The Committee understands that the Department is studying 
how this pay will be implemented and when it will go into effect. When 
will those issues be decided by OSD? Please provide for the record the 
details of who is to receive such pay and the estimated cost of the 
program.
    Army Answer. Section 605 did not create a new allowance nor require 
a report. However, Section 619 revised Section 305 of Title 37 and 
created a special pay for duty at Designated Hardship Duty Locations, 
and directed the Secretary of Defense to prescribe implementing 
regulations. The Department is currently studying the implementation 
procedures for Hardship Duty Location Pay. All services are represented 
in the study and temporary duty and permanent duty quality of life 
issues are being analyzed. The Department believes the study will be 
complete and have guidance distributed by January 1999.
    Navy Answer. Section 605 did not authorize a ``deployment pay'' and 
as such no study is being conducted. As previously stated, this 
compensation initiative was necessary to prevent some enlisted Sailors 
(BAS--E-9 and below, BAH--E-4 and below) from taking a ``pay cut'' 
while deployed. In the past, these Sailors lost their BAS and BAH. This 
practice specifically affected enlisted Sailors in support of deployed 
Air Wings, Helo Detachments, Seabees, SEALS, and the Fleet Marine 
Force.
    Preliminary estimates show that approximately 34,000 Sailors will 
benefit from this new initiative when deployed at an approximate cost 
of $9.97 million due to increased payments of BAS and BAH.
    Marine Corps Answer. Section 605 of the National Defense 
Authorization Act 1998 requires that service members' total 
compensation not be reduced during their deployment. Section 605 did 
not create a new deployment allowance. In the past when Marines 
deployed, they lost their Basic Allowance for Subsistence (BAS). On 
March 11, 1998 OSD issued guidance to the services requiring them to 
discontinue the practice of checking service members' BAS when they 
deploy away from their primary duty station. As such, effective 
immediately, Marines will no longer lose their BAS when deployed 
thereby protecting total compensation (Marines will be charged for 
meals available at a discount rated when deployed). The cost to the 
Marine Corps will be approximately $6 million for the remainder of 
fiscal year 1998 and $8 million for fiscal year 1999. We feel that 
section 605 is a necessary, positive step in providing parity among the 
Services in deployment benefits, and in maintaining the quality of life 
of our deployed Marines and their families.
    Air Force Answer. Section 605 did not authorize a deployment pay, 
but it did introduce the requirement that a member's pay does not drop 
as a result of a TDY deployment. This initiative was part of the fiscal 
year 1998 National Defense Authorization Act and is in effect today. 
The stated intent of Section 605 was to ensure members retained their 
Basic Allowances for Housing (BAH) and Basic Allowance for Subsistence 
(BAS) when they deployed.
    This is a positive move for deployed people. In the past, 
individuals deployed in field conditions lost their entire BAS 
entitlement and meals were provided at no cost. As a result of Section 
605, the member retains their full BAS entitlement. Since current law 
prohibits receiving a subsistence entitlement and free meals, a portion 
of the BAS is withheld to pay for meals provided in the field. The 
remainder of the BAS is retained by the individual--a positive step for 
our deployed personnel. There should be no additional costs to the Air 
Force associated with implementation of Section 605.
    Question. Do you have an estimate now of how much it will cost the 
Services to implement this special pay?
    Army Answer. We do not have an estimate of the cost to implement 
this program at this time.
    Navy Answer. No special pay was authorized under Section 605. 
However, as stated above, preliminary estimates show that 34,000 
Sailors will benefit from this new initiative when deployed at an 
approximate cost of $9.97 million due to increased payments of BAS and 
BAH.
    Marine Corps Answer. Section 605 of the 1998 National Defense 
Authorization Act did not create a new deployment pay. Instead, it 
provides language that ensures that total pay and allowances of a 
service member will not be reduced when the service member is deployed. 
In accordance with OSD guidance of 11 March 1998, the Marine Corps 
published an administrative message (ALMAR 120) protecting Marines' BAS 
while they deploy. As a result, Marines total compensation will now be 
protected while on deployment. It is estimated section 605 of the 1998 
NDAA will cost the Marine Corps approximately $6 million for fiscal 
year 1998 and $8 million in fiscal year 1999.
    Air Force Answer. No special pay was authorized under Section 605. 
When deployed, most Air Force members are in a TDY status and are 
receiving Basic Allowance for Subsistence (BAS). We expect no increases 
to the BAS account resulting from this change.

                            Personnel Tempo

    Question. The increase of unscheduled deployments in the past few 
years for domestic disasters, contingency operations, or Military 
Operations Other Than War (MOOTW), clearly stresses military personnel 
and their families. Gentleman, what is the average time your soldiers/
sailors are on temporary duty, or away from home during the year for 
training, exercises or deployments?
    Army Answer. For normal training exercises, the deployment tempo 
(DEPTEMPO) of the average Army Active Component (AC) unit is 4.5 days 
per month. As would be expected, specific units and Military 
Occupational Specialities (MOSs) experience dramatically greater 
deployment rates. Infantry, Armor, and Special Forces units report the 
highest DEPTEMPO rates, all exceeding six days per month or 70 days per 
year. United States Army, Europe, infantry units have approached 90-day 
annual DEPTEMPO rates. Some units accrue DEPTEMPO rates in excess of 
200 days per year. An example of this type situation would be units 
deploying to Bosnia, Kuwait, or the Sinai for 180-day deployments, 
which necessitates conducting pre- and post-operational mission 
training deployments, often at home stations. This reflects unit 
deployments. When looked at in terms of the individual soldier, the 
average time deployed for those soldiers on temporary duty or temporary 
change of station orders was 125 days in fiscal year 1997.
    Navy Answer. The average Navy unit spends approximately 41 percent 
of the time away from home. This number is within the Navy's goal of 
spending less than 50 percent away over a five-year period.
    Marine Corps Answer. By nature, Marines are deployers, and are 
readily able to respond when the nation calls. To monitor this, the 
Marine Corps measures and tracks unit deployment tempo (DEPTEMPO) in 
relation to the scheduled cycle. DEPTEMPO is defined by the Marine 
Corps as the time accumulated by a unit in periods 10 days or greater 
away from their home station during a given period.
    Marine Force Commanders monitor the DEPTEMPO of their forces, 
taking appropriate action to adjust or change schedules when necessary. 
Schedules are reviewed over the course of a three-year period; the 
current year and two ahead. This enables a balance in the projected 
schedule with DEPTEMPO evenly distributed throughout the operating 
forces. Marine Corps' schedules are geared to ensure the continuing 
provision of forward deployed forces to support CINC requirements, 
maintaining a rotational training and deployment cycle.
    Marine Corps (and Navy) deployments encompass 6-month periods with 
a minimum turnaround ratio of 2 to 1 between them, although a 3 to 1 
ratio is the preferred goal. Individual Marine time away from home is 
dependent upon Military Occupational Specialty (MOS), location and size 
of MOS populations.
    Air Force Answer. The Air Force desired maximum tempo rate is 120 
days TDY per individual, per 12 months. In fiscal year 1997 Air Force 
people averaged 31 days TDY away from home while aircrew members 
averaged 50 days TDY away from home. The average number of Air Force 
members deployed at any given time in fiscal year 1997 was 14,600.
    Question. Explain how your service manages personnel tempo 
(PERSTEMPO) so it does not have an impact on individual unit readiness 
and training of your people? What systems are in place to track 
PERSTEMPO information?
    Army Answer. The Army's PERSTEMPO measurement is a combination of 
skill tempo (SKILLTEMPO--individual training) and deployment tempo 
(DEPTEMP--unit deployments). SKILLTEMPO, reported in the Standard 
Installation/Division Personnel System (SIDPERS), is the percent of 
time spent on ``out of station operational deployments'' by individual, 
Military Occupational Specialty, and skill level. DEPTEMPO, reported on 
the Unit Status Report, records the average number of days within a 
one-month period that unit personnel have spent ``away from their 
bunks'' on training, exercises, or operational deployments.
    SKILLTEMPO is primarily used to shape the force, i.e. insure that 
the Army possesses the correct number of soldiers by rank and MOS to 
fully man its units while also supporting both force educational 
requirements and the institutional Army, such as the Training and 
Doctrine Command and the Recruiting Command. SKILLTEMPO includes those 
individual soldier deployments requiring SIDPERS entries. It is best at 
capturing the amount of time a particular rank or MOS is deployed for 
special duty, TDY, individual schooling, and other individual soldier 
type deployments.
    DEPTEMPO is used to preclude any unit from being subjected to too 
high a deployment rate. DEPTEMPO includes all deployments (unit, small 
element, and individual soldier), except those for professional 
development, which are captured by SKILLTEMPO.
    In fiscal year 1997, the Chief of Staff of the Army (CSA) 
established a DEPTEMPO goal (unit deployments) of no more than 120 days 
per year. All units projecting 120 days deployment or more over any 12-
month period are individually monitored by Headquarters, Department of 
the Army. Army units projecting annual deployment rates exceeding 180 
days require CSA approval to execute deployments.
    The Army continues to spread deployment requirements across the 
force, but with the recognition that some units and soldier 
specialties, by virtue of their mission and skills, will be required to 
deploy more frequently. Army policy, as of February 23, 1998, provides 
a period of stabilization for soldiers returning from an operational 
deployment away from their permanent duty station. Soldiers deployed as 
individuals or within units for a period of at least 30 days as part of 
an operational mission will, to the greatest extent feasible, be 
provided a stabilization period upon return equal to one month of 
stabilization for each month of deployment. In the case where a soldier 
is reassigned from outside the continental United States to within the 
continental United States (CONUS), the soldier retains the unused 
portion of stabilization authorized prior to the soldier's return from 
overseas and will carry it over to the gaining CONUS commander. 
Implementation and management of this policy is the responsibility of 
commanders in the field.
    Navy Answer. The Navy's PERSTEMPO program has been in effect since 
1985. This unit-level system consists of three guidelines:
           A maximum deployment of six months, portal to 
        portal.
           A minimum Turn Around Ratio (TAR) of 2.0:1 between 
        deployments.
           A minimum of 50 percent time in homeport for a unit 
        over a five-year period (three past/two projected).
    CNO personally approves PERSTEMPO exception requests, which are 
submitted only after Fleet CINCs have first exhausted all available 
options.
    Units in excess of 55 percent out of homeport over 5 years are 
placed on a CNO watchlist for close monitoring.
    Marine Corps Answer. The Marine Corps' rotational unit deployment 
schedule has been successful in keeping Personnel Tempo (PERSTEMPO) at 
manageable levels by using scheduling to ensure minimal impact on 
personnel. The PERSTEMPO of all Marines is therefore spread equally 
throughout our deploying forces. Although the Marine Corps does not 
specifically track PERSTEMPO, it tracks unit Deployment Tempo 
(DEPTEMPO), every Marine's accumulated deployed time (ADT) and overseas 
control date (OCD) are tracked within our assignment process. These 
measures enable manpower planners to establish a queuing process for 
future dependents-restricted overseas assignment tours.
    By controlling unit DEPTEMPO through effective scheduling, the 
tempo of individual Marines will also be controlled. The Marine Corps 
depends upon our local unit commanders to assign Marines to deploying 
detachments in an equitable manner in order to ensure that individuals 
are not over-deployed. The Marine Corps tracks and displays its 
DEPTEMPO data as part of the Joint Monthly Readiness Review (JMRR) 
process, which is also displayed in the Quarter Readiness Report to 
Congress (QRRC).
    Air Force Answer. The Air Force recently developed the Tempo 
Tracking System to collect tempo data on all personnel. We established 
a desired maximum tempo rate of 120 days per individual, per 12 months. 
The Tempo Tracking System is available to the Chief of Staff, Air Force 
and all commanders down to the unit/squadron level. It allows 
leadership to sort tempo data by Air Force Major Command, or unit in 
addition to specific Air Force Specialty Codes (AFSC) (officer and 
enlisted), Mission Design Serious (major weapon system) or individual 
member.
    To manage high tempo rates, the Air Force has implemented global 
sourcing of our low density/high demand assets which spreads the 
deployment burden throughout the Air Force; continued use of Reserve 
component volunteers; reduced time in JCS exercises by 15 percent; 
initiated post-deployment stand downs; reduced standard aircraft 
rotations in Air Combat Command from 90 to 45 days; reduced Operational 
Readiness Inspections by 10 percent in fiscal year 1998 and plan to 
reduce another 30 percent by fiscal year 1999; eliminated Quality Air 
Force Assessments and awarded units inspection credit for real world 
deployments.
    Question. Are there certain units or mission skills that are being 
continually stressed with either normal deployments, training, 
exercises, or for contingency operations? If so, describe which skills 
or units are being ``stretched thin.''
    Army Answer. The Department of Defense Global Military Force Policy 
(GMFP) office was established in 1996. The objective of GMFP is to 
define the maximum peacetime deployment tempo level that can be 
sustained indefinitely by low density, high demand (LDHD) assets 
without adverse impact on readiness. The Army currently has seven 
capabilities on the GMFP list: Patriot, Special Forces, Rangers, Civil 
Affairs, Psychological Operations, Special Operations Aviation, and 
Special Operations Signal.
    The Army internally monitors low density units and Military 
Operational Specialities (MOSs) for high demand. As of December 1997, 
the following units and MOSs had the highest skill tempo rate of those 
deployed. It is important to note, however, that MOSs move in and out 
of this group depending on the type of deployments being conducted. The 
units include: Military Police; Postal; Engineer (Heavy Construction); 
Medical; Water Purification; and Movement Control. The MOSs include: 
77W (Water Treatment Specialist); 37F (Psychological Operations 
Specialist); 67S (OH-58, Helicopter Repairer); 93B (Aeroscout 
Observer); 96H (Imagery Ground Station Operator); 51K (Plumber); 13R 
(Field Artillery Firefighter Radar Operator); 27K (Patriot Missile 
Repairer); 35C (Surveillance Radar Repairer); 52F (Turbine Engine 
Driven Generator Repairer); 97E (Interrogator); 45B (Small Arms/
Artillery Repairer); 51R (Interior Electrician); 67V (Observer/Scout 
Helicopter Repairer); and 62F (Crane Operator). MOS 88M (Transportation 
Specialist) and MOS 55D (Tech Escort) are on the bubble. They are 
making it right now, but any additional requirements will add them to 
the list.
    Navy Answer. Yes. Although we are generally remaining within 
personnel tempo (PERSTEMPO) requirements, our forces are being 
stretched because of limited assets to carry out an increasing number 
of missions. We no longer have the flexibility to add new contingencies 
or delay maintenance schedules without gapped presence or straining 
PERSTEMPO and OPTEMPO goals. While this is true for all forces, 
including ships and submarines, certain aircraft types and squadrons 
are currently being stretched the most. With the retirement of the Air 
Force's EF-111, the EA-6B Prowler is becoming the sole provider of the 
Joint-Suppression of Enemy Air Defenses (SEAD) mission. To accomplish 
this, the EA-6B fleet is operating at surge tempo. In 1997, eight of 
twelve active duty squadrons were involved in six-month deployments. 
Personnel have been away from their homeport of Whidbey Island, 
Washington, half of each year. Tactical Electronic Warfare Squadron 138 
has been deployed to Korea and the Persian Gulf over the past three 
Christmases. Similarly, demand for Maritime Patrol (P-3), Airborne 
Early Warning (E-2C), and Special Project Unit (RP-3, EP-3) aircraft is 
outpacing resources as they struggle to meet commitments to theater war 
plans, counter-drug operations, and intelligence-collecting missions.
    Because of manning shortfalls, certain key enlisted ratings 
(specialities) are being stretched. In order to keep deploying carrier 
battle groups and amphibious ready groups adequately manned, we often 
have to ``crossdeck'' people from one ship or aircraft squadron to 
another before deployment. The specific ratings being crossdecked 
change often but recently it has mostly been in critical technical 
ratings, such as operations specialists and fire control technicians 
CINCLANTFLT conducted a study on the impact of reduced manning on 
readiness and unit daily operations. Manning of 51 ships and aircraft 
squadrons in two battle groups/ARGs (one deployed, one in work ups, and 
one ship in overhaul) was analyzed. Representatives from CINCLANTFLT 
and the TYCOMs developed a survey to assess the impact of reduced 
manning at the ``deckplate'' level. Fifteen of the 51 units were 
surveyed. The study found that Fleet sea-manning fell from 98 percent 
in October 1994 (fiscal year 1995) to 90 percent where it remains. The 
average manning of the deployed units studied was 89 percent while the 
average for those in non-deployed units was 85 percent. The deficit 
centers in the junior pay grades. Sea duty E3-4 billets make up 55 
percent of the force, but are only 85 percent manned. The study 
concluded that working hours for our Sailors have increased both at sea 
and in port regardless of where the unit was in the deployment cycle. 
Critical manning of selected ratings (e.g., FC, DS, ET, IS, AO, STG, 
ABE, SH, MS and GENDETs) contributes to an increased workload for 
sailors and results in a re-touring of personnel in mess and 
housekeeping duties. The Intelligence Specialists (IS) is an example of 
a skill in great demand for exercises and contingency operations and in 
which Fleet sea manning is low (88 percent of billets in LANTFLT sea). 
In the case of aviation units, additional training to meet deployment 
certification requirements necessitates increased time away from home 
as squadron detachments are sent to locations such as Fallon, NV and 
Key West, FL.
    More maintenance is being conducted by sailors due to reduced 
maintenance dollars and fewer dedicated periods for IMA/Depot level 
maintenance. Interdeployment commitments have not been reduced in 
proportion to the decrease in force structure. The Navy continues to 
take steps to improve interdeployment efficiency and quality of home 
life. While efforts have been taken to improve home life between 
deployments, the overall manning shortfall in all Fleet units, deployed 
and non-deployed, is what proportionately affects the workload of 
sailors.
    Marine Corps Answer. The Marine Corps does not have any units or 
MOSs that are continually stressed from deployments, training, 
exercises or contingency operations. With that said, there are times 
that uplanned contingencies may exacerbate the stresses felt by our 
lower density, high-tempo skills. For example, our linguists, some 
communications skills and the EA-6B aircraft community would fall into 
this category. These specialized Marines are highly technical and/or 
require lengthy training pipelines, both of which make it difficult to 
sustain healthy inventory levels.
    Generally, the communication, intelligence, and some aviation MOSs 
are ``stretched thinner'' when compared to the remainder of their 
fellow Marines. The communications MOS high tempo can be explained by 
the leaps in computer technology and the Marine Corps' effort to 
exploit these new capabilities.
    Air Force Answer. Air Force manages TEMPO by systems and by skills. 
Of the 43 major combat systems evaluated, 34 were identified for 
management attention during January 1-December 31, 1997. The top five 
most-used Air Force systems were: U-2, EF-111, MH-60, Airborne Command 
and Control Center (ABCCC), and C-17. Of the 730 skills evaluated, 25 
were identified for management attention during January 1-December 31, 
1997. The top five most-used Air Force skills were: Communications 
Cable Systems, Pararescue, Ground Tactical Aircraft Control, Combat 
control, and Airborne Tactical Aircraft Landing Systems.
    Question. Personnel tempo also affects those personnel who remain 
behind at the home station when units deploy. Describe some of those 
impacts. For instance, are they working more hours per week?
    Army Answer. There is a readiness bill associated with all 
contingency operations. When we deploy an Army unit to a potentially 
hostile environment where its performance could dramatically affect 
national policy and prestige, that unit is provided all of the 
training, personnel, and equipment resources needed to maximize its 
chances of success. It is brought to the highest standard of readiness 
which time and resources allow. The bill payers are the non-deploying 
units. This readiness bill is the price we pay for accomplishing our 
Nation's policy of shaping the international security environment in 
ways favorable to U.S. interests. Individual soldier augmentation of 
contingency operations with key leaders and soldiers possessing unique 
Military Occupational Specialists (MOSs) also impacts upon non-
deploying unit readiness.
    Given the smaller force structure of today's Army, the effects of 
contingency operations upon non-deploying units can be especially 
severe. In effect, contingency operations result in personnel shortages 
within non-deploying units and, in some instances, increased work loads 
due to those units assuming the home station responsibilities of the 
deployed units. However, the Army's chain of command and 
noncommissioned officer support channel pro-actively manages the 
effects of contingency operations upon both deploying and non-deploying 
units. The objective is to maintain a trained and ready force while 
minimizing the impact of operational deployments upon units, soldiers, 
and Army families.
    Navy Answer. In addition to the personnel crossdecks, people are 
working harder to get ships and aircraft squadrons ready for 
deployment. While deployed unit readiness is good, we are keeping the 
deployed ships and aircraft ready at the expense of non-deployed 
forces. Budget and personnel shortfalls mean that people are doing more 
with less, and it is increasingly getting harder to ``ramp up'' unit 
readiness prior to deployment. The biggest problem is in aviation. 
Several related challenges--personnel and spare parts shortfalls, 
increased cannibalization rates, decreased mission capable rates (MC/
FMC)--are making people work harder and leading to job dissatisfaction 
and lowered retention.
    Marine Corps Answer. During these challenging and busy times, the 
Marine Corps continues to answer each time the nation calls. Yet high 
operational tempo has a price--higher usage of aging equipment results 
in increased maintenance, and increased man-hours spent repairing 
equipment which equates to less time and money available for training, 
and possible degradation of readiness.
    Marines performing maintenance duties frequently work twelve to 
sixteen hours per day, six to seven days per week on overlapping and 
rotating shifts, in order to sustain the ninety-two percent ground 
equipment and seventy-seven percent aviation equipment readiness we are 
currently attaining. Aviation maintenance Marines work around the clock 
to provide safe and mission capable aircraft to support their buddies 
on the ground. Our motor pools, artillery gun parks and amphibious 
vehicle ramps are busy places. They find Marines working long hours to 
maintain the high readiness on equipment that is older than most of the 
mechanics working on it. The ``maintenance tempo'' is high; but again, 
through the hard work and dedication of our Marines, we remain ready 
despite high operational tempo.
    Air Force Answer. Since 1986, the Air Force has downsized by nearly 
40 percent, while experiencing a four-fold increase in our operational 
commitments. Meanwhile, at home, our airmen are working extended duty 
days and expanded duty weeks with more intense hours to keep our CONUS 
bases running despite the void left by those who are deployed. 
According to the fiscal year 1997 Quality of Life Survey, the average 
work hours per week increased from 47 in fiscal year 1996 to 50 in 
fiscal year 1997. This is significant when you realize that current 
manpower standards are built on a 43 hour work week.
    Question. Explain the personnel policies that are in place for your 
service which minimizes redeploying an individual or a unit soon after 
returning to their home station.
    Army Answer. On February 23, 1998, the Army implemented a 
Deployment Stabilization Policy. The new policy seeks to avoid 
repetitive deployments, enabling our soldiers to enjoy a period of time 
to become reacquainted with their families and to readjust to their 
living and working environment.
    Soldiers placed on Temporary Tour of Duty/Temporary Change of 
Station (TDY/TCS) for at least 30 consecutive days, participating in 
specified operations will, to the greatest extent feasible, be provided 
a period of stabilization equal to one month of stabilization for each 
month of TDY/TCS. During the period of stabilization, soldiers cannot 
be involuntarily placed on TDY/TCS away from their home station for any 
of the specified operations. Stabilization of some critical low 
density, high demand Military Occupational Specialties will not be 
possible; therefore, the first general officer in the chain of command 
may terminate the period of stabilization.
    Stablization will not keep eligible soldiers from being reassigned 
in a Permanent Change of Station. However, unused periods of 
stabilization authorized prior to the soldier's return from overseas 
will be carried over to the gaining commander.
    We must ensure continued readiness of the force, and the care of 
our soldiers and their families. This stabilization policy helps limit 
the adverse effects of continual and repetitive deployments.
    Navy Answer. In October 1985, the Secretary of the Navy, the Chief 
of Naval Operations (CNO) and the Fleet Commanders in Chief (FLTCINC's) 
initiated a concerted effort to eliminate excessive operating tempo 
(OPTEMPO) for ships and aircraft squadrons as well as achieve long 
standing personnel tempo of operations (PERSTEMPO) limits. A PERSTEMPO 
program was institutionalized, at that time, for all U.S. Navy units. 
The program's goal is to balance support of national objectives, with 
reasonable operating conditions for our naval personnel, while 
maintaining the professionalism associated with going to sea with a 
reasonable home life. The PERSTEMPO program is built around three 
specific goals:
          Maximum deployment length of six months.
          Minimum 2.0:1 Turn Around Ratio between deployments.
          Minimum of 50 percent time in homeport for a unit over a five 
        year period.
    FLTCINC's are required to submit a quarterly report to CNO 
encompassing the five year PERSTEMPO cycle. If a unit is projected to 
violate Turn Around Ratio or exceed deployment length maximum, an 
exception message with detailed justification will be forwarded to CNO; 
the message will also include a recommended course of action for any 
units in this category.
    Marine Corps Answer. The Marine Corps' rotational approach to 
deployments and its scheduling process has been successful in managing 
and meeting our commitments. This scheduling effort minimizes having to 
re-deploy Marines soon after they have returned home and ensures a 
minimum goal of a turn-around ratio between unit deployments of 2:1.
    For individual Marines, our unit commanders are relied upon to 
assign Marines to deploying detachments in an equitable manner. To 
assist in the management of this aspect, Marines amass Accumulated 
Deployed Time (ADT). T/AD is earned for each period of 10 days or 
greater away from home station. Upon amassing 365 days ADT, Marines 
receive a new overseas control date, and are eligible for reassignment 
to a non-deploying billet.
    Air Force Answer. We aggressively manage tempo to ensure time away 
from home is minimal and deployments are fairly distributed. The Air 
Force desire is to limit the total number of days Temporary Duty (TDY) 
for each individual, within a 12 month period, to less than 120. The 
Tempo Tracking System enables commanders at all levels to effectively 
manage their resources.
    To manage high tempo rates, the AF has implemented global sourcing 
of our low density/high demand assets which spreads the deployment 
burden throughout the Air Force; continued use of Reserve Component 
volunteers; reduced time in JCS exercises by 15 percent; initiated 
post-deployment stand downs; reduced standard aircraft rotations in Air 
Combat Command from 90 to 45 days; reduced Operational Readiness 
Inspections by 10 percent in fiscal year 1998 and plan to reduce 
another 30 percent by fiscal year 1999, eliminated Quality Air Force 
Assessments and awarded units inspection credit for real world 
deployments.
    Question. We are relying heavily on the Reserve components to 
support the ongoing operations in Bosnia and Southwest Asia. Can you 
describe how their level of participation in operations in recent years 
has risen?
    Army Answer. Recent deployments for the Reserve component have 
included soldiers from both the Army National Guard and United States 
Army Reserve. Specific instances include participation in various joint 
exercises and in ongoing operations, such as Joint Guard and Operation 
Southern Watch. As part of our ``Total Force'' concept, the Guard and 
Reserve are indispensable to U.S. military operations. The Reserve 
component's participation in operations has risen as the Active force 
structure has reduced and the employment of the military has increased. 
Examples of the Guard and Reserve providing valuable support include 
the counter-drug effort, Partnership for Peace, and the overseas 
deployment training program. Over 2,000 mobilized reservists supported 
operations in Haiti, during 1994-1995. Since December 1995, nearly 
16,000 Guard and Reserve soldiers have mobilized in support of 
operations in Bosnia. Only recently, 65 Army National Guard volunteers 
returned from Macedonia, where the soldiers provided engineer, military 
police, and aviation support for six months to Task Force Able Sentry. 
Currently, there are 205 Reserve component soldiers mobilized to 
support operations in Southwest Asia.
    Navy Answer. The Naval Reserve remains an active participant in 
Operation Joint Guard. To date, 523 Selected Reservists (Navy) have 
been mobilized under the current Presidential Selected Reserve Callup 
(PSRC) Authority. The Navy is limited to 150 Selected Reserves on PSRC 
in support of Joint Guard at one time and has sustained that level 
throughout the operation.
    To date, Navy has not mobilized (involuntary) Reservist for 
Southwest Asia. The PSRC authority is in place should we require its 
utilization. ``AT'' and ``ADT'' are to be used for training only 
(annual training, active duty for training), not support of contingency 
operations. The Navy does use Active Duty for Special Work in support 
of contingencies (Operation Joint Guard).
    Marine Corps Answer. The Marine Corps Reserve is an essential part 
of the Marine Corps Total Force. Over the past several years the Marine 
Corps has increased its use of reserve forces in operational missions 
and contingency operations. The Marine Corps relies on Reserve 
component members to augment and reinforce our active forces due to 
increased OPTEMPO. For example, Reserve Marines participated in 
Operations such as Restore Hope (116 Reserve Marines), Sea Signal (535 
Reserve Marines), and Uphold Democracy (49 Reserve Marines). Today, the 
Marine Corps is providing Reserve augmentation to Operation Join Guard 
(105 Reserve Marines) and the Iraq Crisis (41 Reserve Marines). Reserve 
forces are integral to the accomplishment of the Combatant Commands' 
mission requirements.
    Air Force Answer. Since the end of the Cold War, our reliance on 
the Reserve Component has increased dramatically.
    Air Force Reserve--From 1953 to 1990 the Air Force Reserve 
participated in a total of 11 contingencies. Over the last seven years, 
participation has risen 76 percent as the Air Force Reserve engaged in 
34 contingency operations spanning the globe. Reservists are 
participating an average of 80-120 days of military duty per year, 
(depending on their mission area) in addition to their civilian jobs.
    Air National Guard--The Air National Guard has used Volunteerism 
since Operation Desert Shield/Storm for all operations in Southwest 
Asia. The number of Guardsmen and Guardswomen deployed has risen 
exponentially since 1991. On any given day, the Air National Guard has 
at least 1,000 people deployed.
    In Bosnia, up until June 1996, we used volunteers for Operation 
Joint Guard, the peacekeeping mission in the former Republic of 
Yugoslavia. In our Air Traffic Control (ATC) function, we quickly 
exhausted our volunteer resources making it impossible to sustain a 
prolonged ATC presence that was required. That, combined with the fact 
that the Air National Guard owns a majority of the Air Force ATC 
resources, left us no other choice than to execute a structured, 
rotational Presidential Selected Reserve Call-up (PSRC), that continues 
to this day.
    Question. What is your perception of the impact these continuing 
deployments have had on Reserve personnel, their families, and their 
jobs?
    Army Answer. The Army Reserve conducted several soldier retention 
studies that focused on the question of deployment impact. Generally 
the level of impact and effects on retention are influenced by a 
combination of issues, e.g., soldiers' families, employment situation, 
and employer support along with each deployment. Findings from the 
study, surveys and focus groups over the last two-year period reflect 
that deployment alone has not been a sole reason for leaving the US 
Army Reserve. However, they are concerned about repeated deployments 
for operations other than war and the length of deployments, both of 
which affect their intent to remain in the Reserve.
    Generally, Army National Guard families do very well during 
mobilization and deployments. A number of factors contribute to this 
situation: trained volunteers; involved State Family Program Staff; 
soldier screening through personal interviews; and an active 
communication network. Guard families have continued to come far since 
Desert Shield and Storm, responding well to the demands of Guard 
deployments. This situation is attributed to the broad-based Guard 
Family Program instituted prior to Desert Shield and Storm. The 
National Guard Family Program invests a great deal of time and money to 
maintain the Guard family in a ready state in preparation for 
deployment. Additionally, ``Soldier-Screening'' is conducted 
immediately upon mobilization to identify soldiers and families of 
greater risk, who may not fare well during deployment. Investigation of 
the individual situations and, if appropriate, reassignment is 
practiced on a case by case basis. Units are brought back to authorized 
strength by ``cross leveling,'' using suitable volunteers from 
neighboring states and units to ``backfill'' those who cannot deploy 
due to temporary family factors. Hence, most potential problems are 
identified and mitigated before actual deployment. Through a combined 
strength of over 20,000 paid and volunteer staff, the communications 
network provides adequate coverage to ensure the quick flow of 
information, up and down, as well as laterally through the Family 
Program communication chain. This extensive family support network and 
infrastructure allows us to meet deployment family needs and hereby 
support the mission.
    During recent deployments, many Quality of Life issues have been 
identified and resolved. Unresolved issues are identified and are 
incorporated into the Army Family Action Plan and Guard Family Action 
Plan when not tasked to the proponent area of interest for resolution. 
Quality of Life issues are at the forefront of Army Guard concerns and 
will continue to be so.
    There does seem to be a point at which we will not be able to go 
back to the well.
    Navy Answer. The overall impact is a positive one. Although the 
recall authority is involuntary, the Navy has been successful in 
attaining Reservists who volunteer for these demanding assignments, who 
upon completion of their duties, often request to extend under Active 
Duty for Special Work (ADSW). The Reserve community embraces the 
opportunity to seamlessly integrate with the active Navy.
    Marine Corps Answer. There have not been any negative effects that 
have been observed on Reserve personnel, their families, and their 
jobs. Presidential Selected Reserve Callups total less than one percent 
of Marine Corps Reserve end strength and have been sourced with 
volunteers.
    Air Force Answer. Air Force Reserve--The Air Force Reserve 
conducted a command-wide survey in December and January to determine 
what impact high OPTEMPO is having on reservists, their families and 
their jobs. Overall, the survey indicated that employer and family 
support has remained relatively stable between 1994 and 1997. However, 
aircrews are experiencing a disproportionately higher level of stress 
resulting in greater job conflict, increased family problems, and 
decreased willingness to volunteer for reserve duty.
    Specifically, 10 percent of all respondents (including 17 percent 
of aircrew) are considering leaving the Air Force Reserve because of 
problems their participation is causing in their civilian employment. 
Twenty percent of respondents (including 44 percent of aircrews) 
indicated the Reserve is demanding too much additional time away from 
their civilian job. Thirty-five percent of respondents indicated the 
amount of time absent to perform Reserve duties is causing some family 
problems (only 2.5 percent indicated serious problems). Fifty-seven 
percent of aircrews indicated family problems (only 5.0 percent 
indicated serious problems). Aircrews are slightly less willing to 
volunteer as often or for as long a period as indicated in 1994. 
Despite these problems, over 69 percent of respondents (including 76 
percent of aircrews) are very satisfied with their reserve jobs. Fewer 
than 3 percent of respondents indicated they are very dissatisfied.
    Air National Guard--Other than the personnel who are called up for 
Presidential Selected Reserve Call-up (PSRC), there is minimal impact 
on our personnel, their families, and their jobs since they are 
volunteers. We have, on occasion, had an employer who did not like the 
fact that their individual was volunteering to go overseas for 30 to 90 
days. We work very closely with our employers through the Employer 
Support for the Guard and Reserve (ESGR) program to address these few 
instances.
    Our primary concern is in some PSRC situations. A case in point is 
our Bosnia deployment. Because the Air National Guard owns 70 percent 
of the Combat Communications and 62 percent of the Air Traffic control 
assets across the Air Force, we had to deploy these personnel under the 
PSRC. They have been deployed since June 1996 and some units have had 
to deploy twice. When we task personnel for a second 120 day tour 
within a two year period, in a military operation other than war, we 
begin to lose family and employer support.
    Question. Do you believe Reserve recruiting and retention will 
suffer as the result of the Bosnia deployment, for instance?
    Army Answer. Currently there are no documented analyses into the 
effect these deployments have on Army Reserve recruiting. 
Notwithstanding the absence of hard data, there still exists a 
widespread perception that multiple deployments of units over time does 
have negative effects on local recruiting markets, although the effect 
on the national market is negligible. The major effects appear to be 
limited to markets that surround the more heavily deployed units. The 
impact of repeated deployments on soldiers, their families, and their 
employers could eventually have a negative effect on retention as well. 
Over time this could cause a serious erosion in deployability of the 
very units that are most needed.
    Navy Answer. No. The overall sense of accomplishment is high and 
the Active and Reserve component are working side by side to provide 
valuable, real-time support to the war-fighting CINCs.
    Marine Corps Answer. No. We do not believe that Marine Corps 
Reserve recruiting and retention will suffer as a result of the Bosnia 
deployment, primarily because of the limited numbers of reserves that 
have been committed to the mission. The Marine Corps Reserve deployment 
in Bosnia consists of only 10 Civil Affairs Marines and limited staff 
support.
    Air Force Answer. Air Force Reserve--People are the heart and soul 
of any organization. This is especially true for the Air Force Reserve 
where each reservist is a patriot and volunteer. The Air Force Reserve 
Command's stated goals are to recruit and retain men and women who are 
best qualified and able to meet mission requirements; provide them with 
opportunities for development and advancement and a safe working 
environment; and ensure they communicate effectively with families and 
employers. Additionally, quality of life is a significant factor.
    In addition to their civilian jobs, our citizen airmen perform 80-
120 days of military duty per year, depending on their mission area. 
This puts stress on families and employers, which puts stress on 
Reservists, which, in turn, affects their job performance.
    We do not believe overseas deployments have negatively impacted 
reserve recruiting efforts. Successfully competing in a demographically 
changed marketplace with limited resources is our greatest challenge.
    Air National Guard--The only place we anticipate recruiting and 
retention problems is with our Air Traffic Controllers who have been 
under Presidential Selective Reserve Call-up (PSRC) since June of 1996. 
We have spread this tasking among all our units; however, we are 
starting to call on the same personnel for another 120-day tour. To 
alleviate the stress on our ATC community, we must very carefully 
determine how long we can continue to fill this requirement.

                      Readiness of Enlisted Forces

    Question. Gentlemen, are the enlisted forces suffering readiness 
problems because personnel, dollars, and other resources are being 
diverted to peacekeeping missions such as the open-ended operations in 
Bosnia and Southwest Asia?
    Army Answer. During a period of diminishing resources, we must work 
very hard to ensure that training, equipment and personnel strengths 
are constantly adjusted to ensure that the proper state of readiness is 
maintained. Some degradation to active component forces have occurred; 
however, the Army has taken great steps to ensure minimal readiness 
impact on our soldiers as we fulfill our wartime mission requirements 
consistent with the National Military Strategy.
    Navy Answer. No. since the Navy has received funding to support the 
incremental costs of these operations to date, we have not encountered 
readiness degradation as result. However, unfunded contingencies result 
in funds being diverted from non-deployed forces to deployed. Such 
action negatively impacts the balance of current readiness across the 
force by delaying vital equipment repairs and disrupting quality 
training.
    Marine Corps Answer. Marine enlisted forces are not suffering 
readiness problems because personnel, dollars and other resources are 
being diverted to peacekeeping operations. Readiness is the Marine 
Corps' first priority and as such, we take care of funding current 
readiness first. It is critical, however, that we be reimbursed for the 
cost of contingency operations and storm damage. If not, we will have 
to absorb the costs in support of our operating forces (ie, reductions 
to training and equipment maintenance), and the already underfunded 
area of base and station support.
    The Marine Corps is committed to Quality of Life (QOL) issues which 
do ultimately tie to readiness of the force. Marines can better focus 
on the mission if their families are taken care of and their housing 
and recreation needs are properly attended. In the past several years, 
we have made great progress in QOL areas with the help of both Congress 
and DoD. Increased Morale, Welfare and Recreation (MWR) funding has 
allowed us to refurbish old and build new fitness centers with 
permanent staff trainers onboard, improve base libraries with internet 
access, and refurnish the recreation rooms in each barracks with big 
screen televisions, better furniture, video games and in some cases 
mini-gyms. Child development care funding is on track to meet the 
sixty-five percent of requirement goal by fiscal year 2002. Within the 
limited resources we have available for maintenance of real property 
and military construction, we have placed a great deal of emphasis on 
bachelor enlisted quarters (BEQs). As currently planned, we will 
eliminate all inadequate barracks by fiscal year 2005 and will 
eliminate the backlog of maintenance and repair for the remainder of 
our barracks by fiscal year 2004. We will also reduce our current 13.6 
year replacement cycle for barracks furniture to a 7 year replacement 
cycle in fiscal year 2002.
    As long as unfunded contingency costs are reimbursed to the Marine 
Corps, QOL programs which are so vital to our Marines and ultimately to 
our continued readiness will be funded and ultimately readiness will be 
maintained.
    Air Force Answer. Our enlisted people, in fact all Air Force 
members, are feeling the impact of our sustained high TEMPO. This high 
TEMPO is a direct result of having to concurrently support a number of 
long term contingency operations under bare-based conditions for which 
we are not manned or resourced. Right now, the Air Force has over 
13,000 people deployed. That's equivalent to three large Air Force 
wings worth of people. These Airmen, and much of the equipment that 
supports them, must be taken out of hide. This means that not only are 
our deployed folks stressed, but those left behind must work longer and 
harder to keep up with the added ``workload'' created at home. While 
this extra effort has admirably maintained our readiness to meet our 
mission requirements, it is taking a toll on our people and we are 
seeing the results as decreased retention.
    Question. Do you have units experiencing shortages in personnel as 
a result of dramatic cuts to force structure or increased troop 
deployments overseas? If so, are we seeing more units falling into the 
``C3'' or ``C4'' category due to under-manning of units, lack of 
equipment or loss of training because of increased deployments?
    Army Answer. We are not seeing units falling dramatically in 
readiness because of increased deployments. Some units have experienced 
spot personnel shortages, but that was due to a recruiting shortfall in 
certain specialties (particularly infantry), coupled with a temporary 
strength shortfall. This situation was more pronounced during the 
latter half of 1997. The recruiting problem has been corrected and the 
programmed temporary strength shortfall is improving. We do not 
anticipate that personnel shortfalls will be a problem for the Army in 
1998. We are succeeding in bringing force structure and end strength 
into better balance. Consequently, the latest Unit Status Reports 
indicate that unit-manning levels are measurably improving. However, 
this will continue to be a balancing act by our personnel command to 
ensure that the right soldier at the right grade, Military Occupational 
Specialty, and skill level is at the right unit at the right time. With 
a force structure of 480,000, there is no room for error.
    Navy Answer. The shortfalls the Navy is experiencing today can be 
attributed primarily to a conscious decision a few years ago to reduce 
accessions, especially accessions of unskilled Sailors, to achieve 
mandated force level reductions yet keep faith with our career force.
    The Navy is working hard to fill these shortfalls in a very 
difficult recruiting environment--characterized by a strong U.S. 
economy, low unemployment and a low propensity for enlistment age young 
adults to join the military.
    The Navy has submitted to Congress a significant fiscal year 1998 
reprogramming request to move additional funds into the Military 
Personnel, Navy (MPN) account. Among the things this reprogramming will 
provide are:
          1. Increased funding to the Permanent Change of Station (PCS) 
        move program--which helps improve distribution.
          2. Increased funding to the Selective Reenlistment Bonus 
        (SRB) program--which helps retain Sailors with critical skills.
          3. Increased funding to the Enlistment Bonus Program, 
        advertising, and Navy College Fund programs--tools which will 
        assist Navy recruiters in attracting prospective recruits.
    With regard to ``C'' ratings, personnel shortages, when they occur, 
are normally experienced among our non-deployed forces. Because of our 
cyclical readiness posture, we expect non-deployed readiness (or ``C'' 
ratings) to drop soon after units return from deployment. This is a 
direct result of units entering the Inter-Deployment Training Cycle 
(IDTC) where ships and aircraft undergo various levels of maintenance. 
During the IDTC, proficiencies migrate to a basic level due to crew 
turnover and the reduced opportunity to train while conducting 
maintenance. Personnel shortages among units within the IDTC can be 
permitted without adversely affecting a unit's ability to achieve 
combat ready status in time to support their next deployment.
    Marine Corps Answer. The Marine Corps does not have personnel 
shortages as a result of force structure cuts or troop deployments 
overseas. The force structure cuts mandated by last year's Quadrennial 
Defense Review (QDR) did not make major cuts to the Marine Corps' 
endstrength. A recent USMC self-imposed force structure review has 
streamlined the Marine Corps for the future and also mitigated the 
effects of the QDR force structure reductions. Marine deployments have 
not significantly increased due to Bosnia or Southwest Asia, as Marine 
contingency responses are absorbed primarily by our normally scheduled 
forward deployed forces, such as our Marine Expeditionary Units (MEUs) 
and Unit Deployment Program (UDP) forces.
    Air Force Answer. We planned our force structure reductions to 
avoid personnel shortages in units. While the deployment of people to 
contingency operations results in shortages at the home base and may 
temporarily drive a degraded readiness level, of greater concern is the 
decline in our core enlisted experience base as a result of lower 
retention. TEMPO is identified as the primary reason our personnel 
elect to separate. We can increase our recruiting goals to make up for 
the loss of personnel, but we can not immediately replace the 
experience which departs with them.
    There is no one leading cause for units reporting degraded 
readiness levels. A rash of unforeseen engine problems, some shortages 
in spare parts, the aforementioned personnel shortages which result 
from extended and recurrent deployments, and other factors contribute 
to the recent decline in overall readiness levels.
    Question. Generally, how would you characterize the readiness 
levels of the active duty enlisted forces? Are they staying proficient 
for their warfighting mission?
    Army Answer. There has been no major change in the overall level of 
readiness within the Army. While the Army is smaller, it is no less 
combat ready than five or six years ago. Those forces needed to fulfill 
the Army's role in national defense are capable of accomplishing their 
assigned missions. The others maintain a level of readiness 
commensurate with their assigned defense roles
    The requirement to train and perform peace operations does degrade 
warfighting Mission Essential Task List (METL) skills of combat and 
combat support units. Combat service support units suffer far less 
readiness degradation because peace operations tasks closely relate to 
those type units' wartime METL tasks. The cross leveling requirement is 
especially demanding on non-deploying units, which must provide leaders 
and combat service support soldiers to deploying units. However, a 
temporary decrease in combat readiness in selected units is an 
unavoidable price for the Army's execution of our Nation's policy of 
engagement. Moreover, the Army has taken great steps to ensure the 
minimization of readiness degradation due to peace operations through 
deployable training packages, distance learning initiatives, 
simulations, and other training related initiatives.
    Navy Answer. Satisfactory. Due to the Navy's cyclical readiness 
posture, proficiencies differ during the Inter-Deployment Training 
Cycle (IDTC). Upon entering the IDTC, proficiencies migrate to a basic 
level due to crew turnover and the reduced opportunity to train while 
conducting maintenance. We have found that this cyclical posture makes 
the most efficient and effective use of constrained resources. However, 
as a unit approaches its next deployment, training opportunities and 
proficiencies increase to a level that will ensure personnel achieve 
combat ready status in time to support their next deployment.
    Marine Corps Answer. The readiness levels of our active duty 
enlisted forces are good overall, especially in our forward deployed 
forces and those preparing to deploy. The Marine Corps practices and is 
resourced for a cyclical approach to readiness. During normal peacetime 
operations our operating forces have some units that are forward 
deployed, some that have returned from deployment, and some preparing 
and training to deploy. This rotational cycle of Marine Corps elements 
is best described as one-third out, one third back, and one-third 
preparing to deploy.
    Upon a units return from deployment, their readiness rating slowly 
drifts down as resource priorities are more appropriately allocated to 
those units working up for deployment. When a unit moves to within six 
months of a Marine Expeditionary Unit (Special Operations Capable) 
deployment or within 3 months of a Unit Deployment Program (UDP) 
deployment to Okinawa/Iwakuni in Japan, manning and resource priorities 
are raised. A typical infantry battalion will be resourced above 90 
percent in personnel prior to and during their deployment, and their 
equipment will be at the highest readiness level.
    This cyclical readiness cycle is mirrored in most of our combat, 
combat support, and fixed- and rotary-wing squadrons. It is a proven 
and effective system. Cyclical readiness provides the theater Combatant 
Commanders with fully mission capable forward presence forces, and 
allows an efficient prioritization for personnel assignment, repair 
priorities and expenditure of increasingly tight Operations and 
Maintenance dollars.
    Overall, Marines are staying proficient with their wartime mission 
requirements, which is consistent with the Marine Corps' cyclical 
readiness approach as described above.
    Air Force Answer. My assessment is that our active duty enlisted 
forces are definitely ready to perform their wartime missions. However, 
to fully appreciate the effort necessary to maintain the required 
readiness levels, it is important to understand the tasks that confront 
them and the environment in which they operate. Our deployed airmen 
have been supporting several consecutive contingency actions for nearly 
eight years now. Many of our contingency bases began as bare base 
installations, where sustainment meant having to bring in most of the 
equipment and base support people. Meanwhile, back at home base, our 
remain behind airmen are working longer and more intense hours to keep 
the base running . . . filling the void left by those who are deployed. 
Every one of our aviation bases must still be guarded, aircraft still 
need to be flown and maintained, our troops and families still need 
base support services, and our people still need to train. Normal work 
stress becomes acute across the force when the deployed mission 
includes the need to rotate units, time and again, over an extended 
period.
    Airmen and their families are telling us they are getting tired of 
a way of life that cycles between 4-6 months per year TDY, and 55-plus 
hour work weeks when they are back home. As a result, more and more of 
our experienced airmen and officers are deciding to leave us, and it is 
left to our inexperienced people to shoulder the load.
    Again, my assessment is that Air Force people . . . enlisted, 
officer, and civilian alike . . . are doing the Nation's national 
security work well and with great pride. You will feel that when you 
visit the troops. You will see great teamwork and a serious sense of 
purpose. They will never let you down, no matter what. But, I suspect 
in a private moment, many of our airmen would tell you they are 
becoming professionally frustrated over the poor prognosis for a more 
managed way of life for them and their families.
    Question. As the senior enlisted for the Services' total force you 
monitor your Guard and Reserve components. How would you describe their 
overall readiness levels? Are they experiencing any personnel 
shortages, recruiting and retention problems, training deficiencies, 
etc.?
    Army Answer. In general, the readiness of both the Army National 
Guard and the Army Reserve have remained constant or improved slightly 
over the last three to five years.
    Historically, the Army Reserve's most significant overall readiness 
challenge has been attaining appropriate levels of Duty Military 
Occupational Skill Qualification (MOSQ) among it's soldiers. Through 
the Army's tiered resourcing management model, United States Army 
Reserve (USAR) units identified as ``first to fight or first to 
support'' on war plans received the greatest priority for funding and 
allocations in MOSQ producing schools. This provides the highest 
readiness levels feasible for Reserve Component tiered units to fully 
support the National Military Strategy. While the USAR annually 
experiences recruiting and retention challenges, they have not recently 
been at a level which directly deteriorates or impacts unit readiness.
    Overall strength and readiness of the Army National guard improved 
in 1997. However, there is a growing delta between requirements and 
resources in personnel funds to support schools and special training, 
and in operations to support minimal unit readiness of lower priority 
units. Even though some relief has been provided in this area by 
Department of the Army and the Office of the Secretary of Defense, it 
has not been enough to reverse the downward trend that is beginning to 
develop within the lower priority (later deploying) units.
    Navy Answer. The recruiting environment remains intensely 
competitive as a result of an excellent overall economy, declining 
military awareness, and a lower propensity of youth to join the 
military. Also, the inventory of Sailors leaving active duty does not 
match up well with the manpower requirements of the Naval Reserve, 
therefore we have had to rely on the more difficult recruiting programs 
such as the Advanced Pay Grade (APG) and Accelerated Initial Accession 
(AIA) programs to make goal. Despite the challenges we face, we 
anticipated making both officer and enlisted goals in fiscal year 1998. 
Retention in the Naval Reserve has been steady.
    Marine Corps Answer. The readiness of the Reserves to execute its 
role in augmenting and reinforcing the Active Component continues to 
increase. In addition, COMMARFORRES is implementing a readiness 
campaign plan to achieve C-1/C-2 readiness in all units assigned to 
CINC operational plans by 2003.
    Personnel--Regarding recruiting and retention and personnel 
shortages, during the past two years (fiscal years 1996-1997) the 
Marine Reserve has met its authorized/target end strength (42,000). We 
are on target to meet the fiscal year 1998 endstrength goal. We are 
focusing our main efforts on increasing the Military Occupational 
Specialty (MOS) match rates within Selective Marine Corps Reserve (SMCR 
units).
    Training--Our unit training levels are high. Of the 56 Mobilization 
Operational Readiness Deployment Tests or MORDTs conducted in fiscal 
year 1997, all were found to be mobilization capable. Regarding the 
Marine Corps Combat Readiness Evaluation System (MCCRES) conducted on 
Reserve units in fiscal year 1997, 15 of 15 units passed on the first 
attempt giving clear evidence of the combat effectiveness of Marine 
Reserve units. Also, more than 7,300 Marine Reservists participated in 
five Combined Arms Exercises at MCAGCC 29 Palms. Marine Forces Reserve 
constantly seeks training opportunities that enhance training while 
improving motivation and troop morale fostering a higher retention.
    Air Force Answer. Yes, we closely monitor our readiness levels. Air 
National Guard Readiness capability continues to exceed 90% despite 
steadily increasing deployment commitments to support contingency 
operations. At this time, the steady increase in deployment commitments 
has not degraded our readiness, but we continue to closely monitor our 
PERSTEMPO in order to minimize or eliminate any future consequences. 
Our Readiness capability continues to be significant in that it 
consistently parallels the Readiness capability of the Active 
Component. We experience ongoing but insignificant shortages in 
recruiting and retention programs as they relate to readiness. The 
recruiting market continues to shrink on the non-prior and prior 
service front, and the constantly increasing deployment requirements 
continue to challenge our retention force to maintain our trained 
assets. We are also currently experiencing a minor force drawdown, 
which enables us to focus on precision recruiting and retention, i.e., 
recruiting primarily for valid vacancies and diversity goals, and 
retaining the right individuals through member satisfaction and 
incentive programs to assist in our overall effective manning and 
diversity objectives. However, this in itself poses additional 
challenges to our recruiting and retention force that require 
additional time and resources. The Air National Guard experiences 
cyclical shortfalls in training due to occasional lack of funding and 
resources that have a minor impact on the overall readiness of this 
force.

                Child Care and Family Advocacy Programs

    Question. The military has approximately 550,000 enlisted parents, 
with a total of 1.1 million children. The enlisted forces are 
approximately 78 percent of the total child care users in the 
Department of Defense (DoD), with 15 percent being officers, and 7 
percent DoD civilians. What percent of your force is married with 
dependents? What percent of your force is single parents with children?
    Army Answer. Forty-five percent of all soldiers are married and 
have dependent children. Single parents make up four percent of the 
Army.
    Navy Answer. Data from the 1997 Navy-wide Personnel Survey and the 
1997 Quality of Life Survey show that 41 percent of all Navy personnel 
are married with dependents and four percent are parents with children.
    Marine Corps Answer. Of the Marine Corps enlisted force, 26.90 
percent is married with children. Less than half of one percent (0.44 
percent) of our enlisted force are single parents with custody.
    Air Force Answer. Active Duty Air Force--Currently, 46 percent of 
Officers are married and have children in-household, while 35 percent 
of Enlisted members are married and have children in-household. 
Overall, 37 percent of active duty Air Force members are married and 
have children in-household.
    ``Single'' defined as: Single, Divorced, Widowed or Annulled--1 
percent of Officers are ``single'' parents with children in-household, 
while 3 percent of Enlisted members are ``single'' parents with 
children in-household. Overall, 2 percent Air Force members are 
``single'' parents with children in-household.
    Question. Do you believe the quality of the child development 
programs and the availability of spaces in the child care facilities is 
adequate for your service? If not, why not?
    Army Answer. Yes. The Army has made tremendous strides in improving 
the quality of child care. Eighty-three percent of our child 
development centers are nationally accredited. The Army is currently 
meeting 65 percent of the potential demand for child care, which is the 
DoD goal. In addition to child care facilities, we must provide child 
care through Family Child Care Homes in government quarters and 
alternative programs to ensure that soldier-parent needs are met. Each 
installation has its own child care availability plan to meet unique 
local requirements.
    Navy Answer. The quality of the Navy child development program is 
outstanding, and this is acknowledged by those who use the service. Our 
program is in full compliance with the quality standards prescribed by 
the Military Child Care Act. Our program managers conduct annual 
inspections of all child care activities to measure and assure 
compliance with the act.
    Currently, we do not have sufficient capacity to support the DoD 
goal of meeting 65 percent of the potential need. However, we have a 
funding plan in place and are pursuing initiatives, described below, to 
achieve this goal by fiscal year 2003.
    Our current capacity and future plans include: At the end of fiscal 
year 1997, Navy's child care capacity was 38,600 children; this 
included child development centers (14,360 spaces), family child care 
(12,114 spaces), and school age care (12,126 spaces). This permitted us 
to meet 52 percent of the potential need. Currently the 65 percent 
potential need goal for children ages 0-5 is 36,421 spaces and 11,807 
spaces for children ages 6-12. Our child care expansion plan is 
programmed to meet 65 percent of the potential need by fiscal year 
2003.
    We are testing a number of innovative approaches to expand child 
care capacity more quickly, and possibly reduce the cost per space. 
These initiatives include resource and referral, expansion of in-home 
family care to off-base homes of Navy personnel, subsidies for in-home 
family child care to help increase the number of care givers, and 
contracting for spaces in off-base civilian centers with subsidies, as 
necessary.
    Marine Corps Answer. The child development programs offered by the 
Marine Corps are of excellent quality. We are still working to expand 
the availability of these services and have yet to reach our goal for 
providing for 65 percent of the requirement. Full funding to support 
this will not be available until fiscal year 2002 as currently planned. 
In the interim, we are implementing cost effective measures to ensure 
the best use of current resources. Our greatest unmet need is for 
infant care which is also the most costly service for us to provide.
    Air Force Answer. Currently, the Air Force is able to meet 58 
percent of the need for child care for children 0-12 years of age of 
single parents, dual military, and dual working families of active duty 
and DoD civilian families. Through Congress' generous support, we have 
construction funded to meet 65 percent of the need by 2002. Of the 
remaining 35 percent of the need, we expect that some of it can be met 
through more informal child care arrangements including spouses working 
different shifts. We will continue to request Military Construction 
projects to meet the remaining need, especially at remote and overseas 
locations where parents have no other options than to use on-base 
centers. In addition, we are using youth centers and DoDDs schools to 
provide school age care programs and expanding our family child care 
program.
    Question. Is the growing number of single parents and dual-military 
parents a concern to commanders?
    How do single parents and dual-military parents manage their 
parental responsibilities when required to deploy, participate in field 
exercises, or work extended hours?
    Army Answer. This issue has been brought up to me as I visit the 
units. Commanders are concerned. The Chief of Chaplains and I are now 
looking at the readiness impacts of pregnant soldiers and single 
parents. Commanders know that an increase in the number of single 
parents and dual-military parents is a reality of today's Army. They 
provide support to these families by enforcing the standard that all 
soldiers with dependents develop workable family care plans, monitoring 
the plans continuously, and insuring that those plans can be executed 
by soldiers in a timely manner should the need arise.
    However, the primary responsibility lies with the single parents 
and dual-military couples with dependents who are required by Army 
policy to maintain family care plans. These plans outline how 
dependents will be cared for during eventualities such as deployments, 
field exercises, and so forth. The Army has developed a standard form 
which soldiers use to develop these plans. Use of this form insures 
that all aspects of family care are systematically addressed when the 
Family Care Plan is created. Providing for care of Army family members 
is the responsibility of the soldier. Commanders have the 
responsibility of enforcing the standard that all soldiers with 
dependents develop workable family care plans, continually monitoring 
those plans, and insuring that they can be executed by soldiers in a 
timely manner should the need arise.
    Navy Answer. The growing number of single parents and dual-military 
parents has been and remains a concern to commanders. With these 
growing numbers comes an increased demand for outside normal working 
hours child care, i.e. duty and shift workers. As we begin to 
restructure our child care to focus on providing infant care through 
family child care in private homes, we are creating more flexibility 
for new parents as they adjust to their parenting role. Navy child 
development centers have never fully addressed these needs, so 
alternatives must be found as the PERSTEMPO remains high. With the 
demands being placed on our people's time there is a related increase 
in the number of family advocacy cases. This is also directly related 
to both increased awareness and better communications between commands, 
security and the family advocacy program to identify problems and 
quickly address family needs. Our commanders definitely face increasing 
challenges in dealing with the growing number of personnel issues 
relating to these two topics, coupled with decreasing flexibility in 
assigning personnel while still treating all members equitably.
    As required by DoD policy, the Navy has developed a family care 
policy to assist single parents and dual-military couples in developing 
workable family care plans. Single parents and dual-military couples 
are required to complete a Family Care Certificate which details the 
care provisions for their dependents when they are unavailable due to 
deployment, temporary duty, extended work hours, or any other 
circumstances which requires their absence.
    Marine Corps Answer. Yes, Marine Corps commanders are keenly 
concerned that all members of their command be ready for deployment at 
any time. The personal readiness of Marines is directly affected by the 
arrangements they have made for the care of their families when they 
deploy, particularly in the case of single parents with custody of 
children, and dual military couples. To ensure a high state of 
readiness, these Marines are required to complete a comprehensive 
``Family Care Plan'' that provides provisions for all possible 
contingencies, both short and long term. The family care plan must 
include a signed agreement with a designated caregiver, as well as 
arrangements for financial, logistical, and medical care. The family 
care plan becomes part of the Marine's Service Record Book and is 
reviewed upon checking into a new unit, during annual audits, and 
during pre-deployment checks. The Inspector General of the Marine Corps 
is tasked with verifying that family care plans are included in the 
inspection process.
    Marine Corps Order 1740.13A requires single parent Marines, or dual 
military couples with dependents to have a Family Care Plan. This plan 
outlines responsible care arrangements for their children in the event 
of rapid deployment situations. Several options are available to 
parents for managing their parental responsibilities, i.e., Child 
Development Centers which are normally open for ten or twelve hours a 
day, and meet most parents' routine needs. For Marines required to 
participate in field exercises, or work extended hours, the Family 
Child Care homes offer a variety of options, to include night and 
weekend care, as well as, routine full day and part day care.
    Air Force Answer. The single parent/military couple issue has not 
surfaced as a significant concern. Less than 8 percent of single 
members are parents with children in-household, and 26 percent of 
military couples are parents with children in-household.
    All Air Force members with families (Regular Air Force, US Air 
Force Reserve [including individual mobilization augmentees and 
Individual Ready Reserve], and Air National Guard) are required to make 
family care arrangements for both short- and long-term deployments. 
These plans must detail who, when, where and how someone will care for 
their dependents in the event of a deployment and provide for a smooth, 
rapid transfer of responsibilities to designated individual(s) during 
the absence of the military member(s). The individual, Squadron 
Commander, and First Sergeant all share in monitoring this 
responsibility.
    Single parents, dual military couples with family members, and 
members with civilian spouses who have unique family situations (as 
determined by their commander) are required to complete a written plan 
in accordance with Air Force Instruction 36-2908. The plan is 
maintained by the members' commander or First Sergeant and is reviewed 
at least annually for accuracy and workability. Family care plans can 
be and sometimes are reviewed and tested during major inspections.

                Department of Defense Dependents Schools

    Question. The Department of Defense Dependents Schools (DoDDS) 
program operates 162 schools in 14 countries world-wide and reaches 
over 80,000 students. What feedback have you received from the enlisted 
personnel about the quality of the DoDDS education program, 
particularly at overseas bases? How well do they believe it compares 
with other schools?
    Army Answer. Overall, enlisted parents are satisfied. Feedback from 
past parent surveys (DoDDS Report Card), visits to schools, and 
Community and Family Support Center (CFSC) parent forums have validated 
parental satisfaction. Parent forums have surfaced student transition 
concerns, such as inadequate career planning and college search, 
scholarship information for juniors and seniors in overseas areas, and 
loss of credits for graduation. Recently, staff has been assigned to 
identify DoDDS and public school family member education issues and 
develop solutions. Parents are encouraged to be proactive in the 
schools. This increases the level of satisfaction.
    Navy Answer. Most of feedback from Sailors on the quality of DoDDS 
education program has been very positive. At smaller schools overseas, 
there are some concerns about the depth of the academic programs and 
availability of extracurricular activities.
    Marine Corps Answer. DoDDS impacts Marine Corps families mostly in 
Okinawa. The school system is seen as the President's own and is very 
much attuned to Department of Education goals 2000. DoDDS is 
overwhelmingly seen as a high quality program--with standardized test 
results consistently above the national percentile. In comparison to 
other schools, DoDDS is working to increase the number of minority 
teachers employed by the system to bring the racial balance closer to 
that of the student population. DoDDS is also working very effectively 
to improve communication with families and the Services. The School-
Home Partnership is a prime example of this.
    In the past year, the only parent issue was one case of a spouse 
being unable to register a child in school when the service member was 
not present. Department of Defense Education Activity was contacted to 
correct the school's misunderstanding and no further complaints have 
arisen. Difficulties that have been cited include the sharing of DoDDS 
classroom facilities with Voluntary Off-Duty Education Programs. This 
was surfaced by a third-party Military Installation Voluntary Education 
Review (MIVER), when the MIVER team visited Camp Butler and Camp 
Foster. Additionally, high school facilities, particularly specialized 
science and language laboratories, could not be used for evening 
college classes.
    Air Force Answer. Overall, enlisted parents are satisfied. Feedback 
from past parent surveys (report card), visits to schools and parent 
forums by Advisory Council members, and occasional Congressional 
inquiries, include: (1) Long bus rides to and from school is a problem 
in some overseas locations. (2) Juniors and seniors attending schools 
in overseas areas do not get the same career planning and college 
search information as they would receive in the U.S. (3) Athletes miss 
the opportunity of being watched for potential scholarships. (4) More 
programs for talented and gifted students are desired. (5) Parents were 
not always informed of curriculum changes. (e.g. Math program 1995).
    In 1995 and 1996 (the latest data readily available), DoDDS 
students compared favorably to national averages on standardized tests. 
On the Comprehensive Tests of Basic Skills, DoDDS students consistently 
exceeded the national average in all 5 disciplines of reading, 
language, social studies, math, and science for all 3 tested levels 
(grades 3, 7, and 11). In 1994 and 1995, DoDDS students outscored the 
national average on the verbal component of the Scholastic Aptitude 
Test (SAT), a common college entrance exam.
    There are no reports of DoDDS not being comparable to a local 
stateside school district.
    Question. What do you see as the major strengths and weaknesses of 
the DoDDS schools?
    Army Answer. Specified strengths and weaknesses were based on 
school visits and parents forums conducted during site visits. 
Identified strengths include strong military-school partnerships, 
diversity of the student body, and a strong School-Home Partnership 
Program which strengthens parent/school communication and parent 
involvement.
    Several weaknesses were also identified. There is a need for DoDDS 
to be more aggressive in bringing the American culture together with 
the culture of the host country. The bus time between some locations is 
extensive, and most routes lack bus monitors. There are too few 
vocational/technical courses to balance a pre-college curriculum. There 
is also a lack of sporting events and sufficient honors courses. 
Stateside school facilities are in need of repair, and teacher's aide 
positions in stateside schools are not consistent with most local 
schools.
    Navy Answer. The major strengths of DoDDs schools include the 
education level of teachers, 65 percent possess master's degrees, 
foreign language programs and intercultural experiences. Also, DoDDs 
students perform above the national average on standardized tests.
    Major weaknesses of DoDDs schools occur mostly at smaller schools 
with less than 450 students. The depth of academic programs is less 
than at larger schools and extracurricular activities are not as 
extensive. Also, teachers at smaller schools are required to teach 
multiple subjects and teach more than one grade level. Affecting all 
DoDDs schools to some degree are the interruptions caused during the 
school year by PCS transfers.
    Marine Corps Answer. The DoDDs school system is seen as the 
President's own and is very much attuned to Department of Education 
goals 2000. DoDDs is overwhelmingly seen as a high quality program--
with standardized test results consistently above the national 
percentile. Sharing of DoDDs classroom facilities with Voluntary Off-
Duty Education Program was cited as an issue by the third-party 
Military Installation Voluntary Education Review (MIVER), when the 
MIVER team visited Camp Butler and Camp Foster. High school facilities, 
particularly specialized science and language laboratories, could not 
be used for evening college classes.
    Air Force Answer. The major strengths of DoDDs schools are a strong 
military-school partnership, a strong emphasis on staff development, 
and a diverse student body. Since there is always room for improvement, 
increased cultural interaction (with the host country) could enrich the 
DoDDs students' educational experience.

                       Gender Integrated Training

    Question. In June 1997, the Secretary of Defense appointed the 
Federal Advisory Committee on Gender-integrated Training and Related 
Issues to assess the current training programs of the Military Services 
and determine how best to train a gender-integrated, all volunteer 
force. The recommendations of the December 1997 Kassebaum Report center 
on the quality of recruits and the need to instill discipline 
throughout the training process. The report also recommends 
establishing separate barracks for male and female recruits. The 
January 1998 Defense Advisory Committee on Women in the Military Report 
highlights some of the same issues as the Kassebaum Report but adds 
that the services need to establish and enforce clearer gender related 
policies in areas such as fraternization. The Committee understands the 
military services are developing their recommendations independently on 
the Kassebaum Report. Would you please give the Committee an indication 
of your position?
    Army Answer. The Army must train as it fights. Male and female 
soldiers are integrated in non-combat units and work together to 
complete missions. The ability of soldiers of different genders to work 
together in troop units is a soldierization issue which we must begin 
to address at the level with the most control--Basic Combat Training 
(BCT). Gender-integration of soldiers at squad level should continue in 
BCT, so that we do not pass the mission of training soldiers how to 
live and work together as a team on to the war-fighting force. 
Discipline, values, teamwork, dignity and respect for others are all 
training objectives in Initial Entry Training (IET). The expansion of 
BCT by one week will build on those objectives and includes 27 hours of 
human relations training for recruits covering the Army policy on 
unprofessional relationships and fraternization.
    The Army is modifying current IET barracks configurations to 
provide physical separation of sexes by a lockable barrier. Training 
and Doctrine Command (TRADOC) is currently conducting a study to 
determine the total costs associated with this configuration. All 
soldiers deserve and should reasonably expect a ``safe and secure'' 
environment. However, separating soldiers of different genders into 
different buildings prevents team building, cohesion, and esprit 
necessary for molding soldiers.
    Navy Answer. I believe that the recommendations of the report are 
essentially on target, and I am proud that the Navy had initiatives 
already underway to address many of the recommendations before they 
were identified by the report. I am not in agreement however, that it 
is best to train young men and women Sailors separately. We subscribe 
to the basic tenant that Sailors should train the way they fight. They 
will fight side by side, and they will berth on the same ship in 
separate berthing compartments. Berthing young men and women Sailors 
the way we currently do at RTC, in the same barracks but in separate, 
secure compartments, closely approximates the way they will live aboard 
ship. The last thing as a command master chief of a gender-integrated 
ship that I would want is for young Sailors reporting to their first 
ship to not be accustomed to the idea that they will work and live in 
proximity to each other.
    Marine Corps Answer. Discussion: On December 16, 1997, the Federal 
Advisory Committee on Gender-Integrated Training and Related Issues 
completed their six-month assessment of the armed forces' initial entry 
training programs and provided their recommendations on how best to 
train the young men and women of today for tomorrow's missions. 
Specifically, the Committee reviewed the armed forces' recruiting 
practices, basic training, and advanced training--what the Marine Corps 
calls Making Marines. The Marine Corps appreciates the efforts of 
Senator Kassebaum Baker and her commission in their scrupulous review 
of the process by which we transform America's youth into your Corps of 
Marines. Their insights are valuable and their recommendations timely, 
as we face the many emerging challenges on the chaotic battlefield of 
the post-Cold War world.
    The two most important things that the Marine Corps does for the 
Nation are to make Marines and to win battles. Two years ago, we 
implemented changes and improved the process by which we make Marines. 
The young man or woman who now desires to be a U.S. Marine undergoes a 
veritable transformation. This transformation is not just a new block 
of instruction or a new event at recruit training; it is a process that 
begins with the first contact with the Marine recruiter and continues 
through a Marine's entire time with the Corps. The transformation now 
consists of four phases--recruiting, recruit training, cohesion, and 
sustainment--each of which is essential to the process.
    In their report, the Commission also addressed the training process 
as a continuum, and generally their recommendations revalidate the 
Corps' transformation philosophy. In many instances, their 
recommendations can strengthen and refine the process. We have 
thoroughly reviewed the commission's recommendations. Our detailed 
comments follow:
    detailed review on gender-integrated training and related issues
1. Recruiting policy
    Recruiting is the future of the Marine Corps. Our ability to 
conduct nonprior service recruiting directly affects our readiness for 
combat. By design, the Marine Corps is a relatively junior force, with 
68 percent of our Marines serving their first term of enlistment. As a 
result, we must replace over 20 percent of our non-prior service 
regular enlisted force and over 14 percent of our reserve non-prior 
service enlisted force each year. Two decades ago, the Marine Corps 
reorganized recruiting to establish a key link between recruiting and 
recruit training. The operational commanders at each recruit depot were 
given responsibility for recruiting in sufficient quantity and quality, 
in addition to their previous responsibilities for recruit training. 
This linkage is critical to maintaining quality standards throughout 
the recruiting and recruit training process.
    a. Recommendation: ``Decrease the emphasis on monetary incentives 
in advertising and public relations campaigns and emphasize more 
motivational themes of challenge and patriotism.''
    Comment. Concur. Since the late 1970's, the Marine Corps has 
embraced a marketing strategy in line with the committee's 
recommendations. Marine Corps advertising strongly emphasizes the theme 
of the smart, physically fit, tough warrior. The purpose is to 
establish a relationship between the prospect's needs and the 
intangible benefits the Marine Corps offers and expects--honor, 
courage, and commitment. The Marine Corps directs its primary enlisted 
recruiting effort toward the 16-19 year old males and females. We 
portray the individual Marine and Marine Corps as something special and 
seek to reinforce those qualities that constitute ``what a Marine is 
made of.'' The cornerstones of the strategy are honesty and integrity, 
an appeal to the ``intangibles'' of Marine Corps service--mental and 
physical challenges, leadership skills, self-discipline, and the 
concept of a tough and smart Corps consisting of men and women of 
character.
    b. Recommendation. ``Link recruiter's full credit for a recruitment 
to the recruit's performance in basic training.''
    Comment. Concur. For evaluation purposes, the Marine recruiter is 
directly linked to a recruit from initial contact through the recruit's 
graduation from training. Recruit attrition, by recruiter, is tracked 
within the Marine Corps Recruiting Command at all levels. It is 
considered for awards, meritorious promotions, and fitness reports.
    c. Recommendation. ``Utilize the Delayed Entry Program to better 
prepare recruits mentally and physically.''
    Comment. Concur. The Marine Corps Delayed Entry Program (DEP) is 
the key to preparing future recruits for the rigors of recruit training 
and setting them on the proper course for their first term of 
enlistment. Recruiting is, in fact, the first phase in the 
Transformation of a civilian into a Marine. It is here in the DEP that 
we will begin to build the prospective recruit physically; teach them 
our core values; and prepare them mentally for what they will face in 
recruit training. Once in the DEP the recruiter is required to maintain 
weekly contact with prospective recruits and lead them in the 
installation of core values. Recruiters are expected to provide regular 
physical fitness training for their prospective recruits and remedial 
training for those who require it. Drill instructors (DI's) are often 
in attendance at ``pool'' functions in order to provide first hand 
information to the prospective recruits on what to expect in recruit 
training and answer questions they or their parents may ask. Of 
particular importance is the use of female DI's at these events to 
answer questions and speak to the female recruits as a group. We 
require that all recruits pass the Initial Strength Test of pullups 
(flexed arm hang for females), situps, and a 1.5 mile run (1.0 mile for 
females) prior to reporting to the recruit depot. In addition, the DEP 
serves another purpose. It provides the Marine Corps with an 
opportunity to observe and monitor the recruit and ``cull out'' those 
who use drugs, become involved with the police, fail to graduate from 
high school, are not at the desired level of physical fitness to begin 
recruit training, or simply do not have the ``heart'' to be a Marine.
    d. Recommendation. ``Improve recruiter training so that recruiters 
provide more informed, up-to-date, and consistent information to 
potential recruits.''
    Comment. The Marine Corps is committed to ensuring recruiters 
provide recruits with the most accurate, up-to-date, and consistent 
information available. To that end, recruiters are thoroughly trained 
before assignment to a Recruiting Station and throughout their tour.
    After careful initial screening, prospective recruiters must pass a 
seven-week course of instruction at Recruiters School, MCRD San Diego. 
The Basic Recruiter Course prepares prospective recruiters for the 
demanding task of canvassing recruits. The course consists of the 
following instructional areas: Sales Training; Communications Skills 
Training; Systematic Recruiting Process/Recruiting Station Operations; 
Quality Enlistment Procedures; and Product Knowledge.
    Classes in Leadership, Recruiter Ethics, Legal Responsibilities, 
and Financial Management add to the Program of Instruction for 
recruiter training. Graduates of the school are considered to be 
``basic recruiters'' in a trainee status.
    During the first nine months after a recruiter arrives at the 
Recruiting Station, the command group ensures a positive transition 
with additional training and assistance through a series of training 
sessions and recruiter evaluations. These include, Proficiency and 
Review Training, Proficiency and Review Evaluation, and quarterly 
recruiter evaluations. Throughout the recruiter's three year tour, the 
training and evaluation are one continuous process. Since the 
recruiters are in the direct chain of command of the recruit depot 
Commanding Generals, they receive continuous updates through 
conferences, training events, briefings by Recruit Training Regiment 
personnel, and visits to the recruit depots themselves.
    e. Recommendation. ``Increase the number of female recruiters.''
    Comment. We are seeking to increase our numbers of female 
recruiters and concur with the committee's recommendation. In addition 
to recruiting, there are increased demands for female Marines in other 
critical billets, such as DI and instructor duties at follow-on 
schools. There are approximately 8,063 female Marines on active duty, 
but only 25 percent are career Marines who qualify for the numerous 
Special Assignment requirements (which include recruiting duty). As we 
have increased the number of women in the Marine Corps, we are making a 
concerted effort to have our recruiter population reflect that growth. 
We are not there as of yet. However, more females are now assigned to 
recruiting duty than ever before. Last year we began the assignment of 
female majors as recruiting Station Commanding Officers and the 
assignment of female company grade officers as Recruiting Station 
Executive Officers and Operations Officers. Four of our seventy-one 
Officer Selection Officers are currently female officers. We are 
actively seeking more female NCOs to join our career recruiter force. 
The simultaneous competing demands for DI's, recruiters, and Marine 
Security Guard Battalion personnel, all chosen from the best of our 
female NCOs and SNCOs, add to the challenge of keeping as many females 
on recruiting duty as we would like. Our recruiting stations augment 
their female recruiters by using female Marines from around the Marine 
Corps, including DI's, to attend functions with members of the DEP. 
Their express purpose is to speak directly with prospective female 
Marines and answer their questions.
    f. Recommendation. ``End extended leave for basic training 
graduates in the recruiter's assistant program.''
    Comment. Non concur.
    Marine Recruiters face historically low levels of both unemployment 
and propensity to enlist. Propensity has consistently declined from its 
peak in the mid-1980s, leveled at a historic low and shows little sign 
of increasing in the near term. Military service is not seen by large 
percentages of the youth market as a sound career option, and perhaps 
most importantly, those who influence a potential decision--parents, 
relatives, teachers, coaches--themselves have no military experience. 
The assignment to a recruiting substation of new Marines--through the 
Permissive Recruiter Assistance Program (PRASP) for a period of up to 
30 days--provides a role model in the community who is a living example 
of the ``Transformation.'' PRASP is a sound investment during a period 
of reduced propensity and limited resources. Last year PRASP Marines 
accounted for approximately 4,000 contracts. To attain these same 
numbers of recruiters in the field would require a commensurate 
increase in facilities, vehicles, support costs, and a reduction of 
career Marines available for assignment to the operating forces.
    During fiscal year 1996, 5,649 Marines participated in PRASP in 
their hometowns at no expense to the government. This time was in 
addition to their boot leave. Those 5,649 Marines netted the Marine 
Corps 1,608 individuals who joined the Marine Corps. During fiscal year 
1997, with a change to our process for approving participation in the 
program, 14,263 new Marines participated in PRASP and increased the 
number of individuals joining the Marine Corps to over 4,000 contracts. 
We are seeking all means to reduce the time awaiting training. PRASP, 
however, is a means for turning that time into productive effort.
    The Marine Corps shares the Committee's concern with the negative 
effects that extended leave can have on a recent recruit graduate. We 
are renewing our efforts to sustain the discipline, military bearing, 
and physical conditioning to those Marines assigned to PRASP.
2. Training cadre
    Marine Corps DI's epitomize the title ``Marine.'' The DI's sole 
responsibility is to take American men and women and transform them 
into Marines, as they are both a role model and a mentor to recruits 
while they are in recruit training.
    a. Recommendation. ``Improve screening of training cadre candidates 
prior to selection.''
    Comment. The Marine Corps agrees with the committee that a 
``thorough and uniform'' screening of potential DI's is essential to 
providing an effective training cadre. To that end, there is extensive 
screening of all prospective Marine Corps DI's prior to and during 
their training program. A four-phase screening process begins with an 
initial screening at the Enlisted Assignments Branch, HQMC with a 
thorough review of the Marine's official military personnel file. In 
accordance with MCO 1326.6C Selecting, Screening, and Preparing 
Enlisted Marines for Drill Instructor, Recruiter, and Independent 
Duties, the second and most critical screening is undertaken by the 
Marine's Commanding Officer (CO). It is the CO who knows and works with 
the candidate and truly plays the most important role in the screening 
process because of their personal knowledge of the individual, access 
to the Marine's service records, and performance information not 
readily available to HQMC. The CO's screening is designed to assess 
whether the potential DI has the maturity, leadership, and judgment 
required for making Marines. The CO's screening encompasses the 
following areas: Education (DI education should equal the majority of 
recruits), Disciplinary record, and Medical qualification, importantly, 
a chance to interact with recruits. Upon completion of DI school, new 
DI's are assigned to ``veteran'' teams which allows for mentoring and 
the continuing development of younger, less experienced DI's.
    c. Recommendation. Increase the number of training cadre (in the 
Army, Navy, and Air Force).
    Comment. Not applicable.
    d. Recommendation. ``Increase the number of female trainers.''
    Comment. The Marine Corps recognizes the need to increase the 
number of female Marine trainers at Marine Corps Recruit Depot Parris 
Island. During September 1997, the Commandant of the Marine Corps 
directed that the number of female DI's at Parris Island be increased 
from 76 to 80, in order to accommodate increasing accession of females 
and to improve the quality of life for female DI's. To support the near 
term increase and long term fiscal year 1999 increases, the following 
actions are being taken:
    (1) On October 30, 1997, the Commandant of the Marine Corps wrote a 
personal letter encouraging prospective female DI's to volunteer for 
this critical duty.
    (2) Reinstated the DI Screening Team. This team briefs and recruits 
female Marines for DI duty. The team includes the Commanding Officer 
and Sergeant Major of 4th Recruit Training Battalion, as well as two 
working DI's and the DI Monitor from the Personnel Management Division.
    (3) The Enlisted Assignments Branch (MMEA) has instituted a search 
that has identified and screened career female Marines who meet the DI 
requirements. These Marines will be screened by the DI Screening Team 
or during MMEA Command Visits, with the intent of increasing our 
numbers of qualified DI's.
    Increasing the number of female trainers will take the concerted 
effort described above because the number of female Marines available 
is limited. As mentioned in the response to recommendation 1(e) above, 
there are approximately 8,063 female Marines on active duty, but only 
25 percent are career Marines who qualify for the numerous Special 
Assignment requirements (which include DI duty). In addition to DI 
duty, there are increased requirements for female Marines in other 
critical billets, such as recruiting and instructor duties at follow-on 
schools.
    The increased number of female DI's will enable the Marine Corps to 
maintain an optimum instructor-to-recruit ratio. Female platoons in the 
female battalion begin training with 45-60 recruits, supervised by 
three female DI's. This DI to recruit ratio of 1 to 15/20 has proven 
effective in conducting and supervising training at the platoon level 
and is comparable to the ratio in male recruit platoons. The majority 
of recruit training takes place at the platoon and series level, and is 
normally conducted by the all-male or all-female platoon or series 
staffs. Although recruit training is gender segregated, male and female 
platoons may encounter one another in the course of training. 
Scheduling often creates ``concurrent training'' opportunities, such as 
weapons instruction, marksmanship qualification, gas chamber, close 
combat, or combat water survival training. These training opportunities 
expose both male and female recruits to DI's of both sexes in positions 
of authority and establishes them as positive role models.
    Following graduation from recruit training, all non-infantry 
Marines are assigned to Marine Combat Training (MCT), where they are 
organized into ``partially gender integrated'' units. This 
organizational structure consists of a single female platoon in an 
otherwise all male training company. The female platoon level staff has 
four female squad leaders and a male infantry staff noncommissioned 
officer as a platoon commander. The company level staff is a 
combination of male and female officers and staff noncommissioned 
officers. Marines are exposed to a gender integrated chain of command 
and observe professional interaction between male and female leaders.
    Upon graduation from MCT, all Marines report to follow-on Military 
Occupational Specialty (MOS) schools. With the exception of combat arms 
training, all remaining MOS schools are ``fully gender integrated'' 
with no instructor gender restrictions. Young Marines are exposed to 
male and female instructors as coequals and positive role models.
    e. Recommendation. ``Encourage volunteers by improving incentives 
and rewards so that a training assignment is career-enhancing.''
    Comment. The Marine Corps goes to great lengths to not only screen 
and train DI's, but to provide the prestige and incentives that 
maintain the 8511 Drill Instructor MOS as a career-enhancing 
assignment. With a calendar year 1997 average of 94 percent volunteer 
rate for DI duty, incentives include the following: Clothing Issue: (2 
Campaign Covers, 5 shirts, 4 trousers, 3 sets of utilities); 
Proficiency pay: $275.00 per month; Follow-on duty station assignment 
option; DI Ribbon; DI of the Year Award Eligibility; ``Pride and 
recognition'' of being a Marine DI; Meritorious Promotion.
    Promotion statistics confirm that DI duty is career enhancing in 
the Marine Corps. In fiscal year 1997 for example, the promotion rate 
for those NCO's with DI experience in zone was 73 percent, compared to 
a rate of 58 percent for all NCO's in zone.
    f. Recommendation: ``Clarify trainers' authority.''
    Comment. The Marine Corps believes that its DI training program 
clearly defines its ``training philosophy'' and establishes concise 
parameters for ``trainer's authority''.
    (1) The DI School syllabus provides DI's with 158.5 hours of 
Standard Operating Procedures and Leadership instruction, clearly 
delineating the DI's authority and span of control. Further, DI's 
receive 354.5 hours of various General Military Subjects, Physical 
Training, Close Order Drill, Field Training, Instructional Techniques, 
and Core Values, which provides the requisite knowledge and confidence 
required for successfully training recruits.
    (2) The overall responsibilities of recruit trainers are explicitly 
laid out in the Standard Operating Procedures (SOP) order at each 
recruit depot, and Marine Corps Order (MCO) 1510.32B, Recruit Training, 
which states; ``All who are associated with recruit training must 
ensure this vital process is conducted in a professional manner. 
Hazing, maltreatment, abuse of authority, or other illegal alternatives 
to leadership are counterproductive practices and are expressly 
forbidden. Marines in supervisory positions are accountable for their 
actions.'' The above documents are provided to all recruit trainers for 
reinforcement and referral. All recruit trainers and non-DI recruit 
supervisors are tested and recertified annually on SOP policies.
    To preclude abuses of power and authority, all recruit training 
activities are conducted and/or overseen by the Recruit Series Officers 
and Chief Drill Instructors. Supervision of the DI's and other Marines 
involved in training recruits is the responsibility of the recruit 
company and battalion staffs. Additionally, per MCO 1510.32B, Recruit 
Training; ``Each recruit will receive an individual and personal 
interview from an officer at least once during the training cycle. This 
interview will provide the recruit the opportunity to discuss personal 
problems, performance levels, and to voice grievance without fear of 
reprimand or intimidation.'' Further, recruits are provided the right 
to Request Mast with commanders within their chain of command without 
fear of prejudice. The above process allows for institutional 
supervision to deter abuse without undermining the trainers' authority.
    Recruit Surveys are not a normal part of Marine Corps recruit 
training. However, when significant training changes occur, such as the 
Crucible, recruits are surveyed to capture relevant feedback.
    g. Recommendation: ``Increase support-group staffing and enhance 
availability to recruits.''
    Comment. We acknowledge the committee's recommendation to ensure 
support group staffing is appropriate to their task at hand. Support 
group staffs at both depots (Chaplains and Depot Inspectors) are 
adequate to provide the necessary services to recruits. The chaplains 
at both recruit depots are closely involved in every facet of training 
and social events, and are integral members of the recruit training 
process. The bulk of chaplain support at each recruit depot is 
dedicated to recruit training, resulting in all Recruit Training 
Regiment (RTR) chaplain assignments being at full strength and employed 
throughout the recruit training battalions. In excess of 3,000 recruits 
attend weekly religious services at each recruit depot, and an average 
of 600 recruits participate in weekly Protestant and Catholic religious 
programs, to include Religious Lay Reader training and supervision. 
Chaplains are a common sight during various recruit training evolutions 
from physical training to the Crucible. They provide additional support 
to the training staff, the recruits, and they gain an opportunity to 
better understand and participate in the recruit training process. The 
RTR chaplains provide support to both recruits and the permanent 
personnel throughout the training cycle, to include:
    (1) Welcome Aboard Lecture.
    (2) Core Values Instruction: (a) Recruit Training (5 hours); (b) 
Drill Instructor School (4 hours); (c) Senior Drill Instructor Course 
(1 hour); (d) Recruit Training Officer Orientation Course (2 hours).
    (3) Religious Programs/Sacramental Rites.
    (4) Counseling.
    Each Recruit Depot Inspector staff consists of seven Marines 
involved with the oversight of recruit training. The inspector staff 
are manned by the following: Depot Inspector (Colonel); Deputy Depot 
Inspector (Lieutenant Colonel); Chief Inspector (Gunnery Sergeant); 
Battalion Inspectors (One per battalion) (Staff Sergeant--Gunnery 
Sergeant).
    In addition to the oversight of training by company and battalion 
staff, each Recruit Depot Inspector ensures the safe execution of 
training. Additionally, the Depot Inspector enforces ``standards of 
conduct'' through unannounced visits to training events.
    The chain of command provides support for recruits on a daily 
basis. As members of the Armed Forces, recruits are permitted to 
request mast with the commanders within their chain of command. 
Recruits are informed of their right to request mast; with whom they 
can request mast; procedures for requesting mast; that request mast is 
a private communication and the subject matter need not be discussed 
with anyone except the person to whom the request is directed; and that 
recruits availing themselves of the right to request mast may do so 
without fear of prejudice.
3. Basic training requirements
    The purpose of recruit training is simple--to make Marines. The 
young men and women who arrive at the recruit depots to begin that 
process are generally away from home for the first time. They have 
brought with them diverse perceptions of right and wrong; equally 
eclectic is their understanding of permissible behavior. Their 
experiences with authority figures may have been good or bad, proper or 
abusive. In general, they arrive with immature, undeveloped, and 
unfocused thoughts on professionalism and professional conduct. The 
only thing they have in common is their desire to be a Marine. By 
capitalizing on that desire, training transforms these individuals from 
many diverse backgrounds into Marines imbued with a common set of 
values and standards.
    a. Recommendation: ``Separate barracks for male and female 
recruits.''
    Comment. This is Marine Corps policy.
    b. Recommendation: ``At gender-integrated installations, organize 
same-gender platoons, divisions, and flights and continue gender-
integrated training above this unit level.''
    Comment. Marine Corps recruit training is gender-segregated at the 
battalion level.
    c. Recommendation. ``Toughen basic training requirements and 
enforce consistent standards for male and female recruits.''
    Comment. The Marine Corps concurs with the committee's 
recommendation. In fact, on 1 October 1996, recruit training for both 
males and females was increased to 12 weeks. Extending recruit training 
provided DI's additional time to teach, mold, and mentor their 
recruits. It also enabled increased core values training, totaling more 
than 50 hours of instruction and discussion. Most importantly, a 
crystallizing experience was developed that brings together and focuses 
all that a recruit has learned in the previous weeks of boot camp. 
Known as ``The Crucible,'' it is a 54-hour field training exercise that 
presents continuous physical and mental challenges. Designed to 
emphasize the importance of teamwork in overcoming adversity, it truly 
is the defining moment of recruit training.
    Marine Corps gender segregated recruit training takes into 
consideration the differences in physical strength and endurance 
between entry level male and female recruits. The recruit training 
physical conditioning program has two primary objectives--to achieve 
and maintain a peak level of physical fitness and to build confidence 
by having each recruit exceed his or her own expectations. As a result, 
physical fitness standards are adjusted to accomplish both goals given 
the starting level of each gender.
    The remaining standards within the recruit training Program of 
Instruction are identical for both male and female recruits. While 
Marine Corps recruit training is gender segregated, male and female 
recruits execute the same training, and are trained to the same entry 
level standards in marksmanship, close order drill, combat water 
survival training, field training, and general military subjects. The 
recruit training culminating ``Crucible'' event is also conducted in an 
identical fashion for both male and female recruits.
    d. Recommendation: ``Toughen physical fitness requirements and 
expand instruction on nutrition and wellness.''
    Comment. The Marine Corps' physical fitness program has been 
thoroughly examined over the past two years, resulting in tougher 
standards for all recruits and Marines. In September 1996, the Training 
and Education Division (T&E Div), Marine Corps Combat Development 
Command, sponsored a Physical Fitness Conference that brought together 
Marines and a host of experts from the physical fitness conditioning 
and research community, to include the Cooper Institute for Aerobic 
Research, U.S. Sports Academy, Naval Health Research Center, University 
of Dayton's Exercise Physiology Department, and the Sports Training 
Institute of New York. The implementation of tougher physical fitness 
training and testing standards are an outgrowth of this continuing 
interaction and has resulted in the following changes to Marine Corps 
fitness standards: Increasing the female physical fitness training 
(PFT) run from 1.5-miles to 3.0 miles (January 97); Implementing 
``deadhang'' pullups for males (January 97); Increasing the female 
situp requirement to the male standard (January 97); Recruit physical 
fitness training serves two purposes:
    (1) First, it physically develops young men and women to a standard 
that allows them to meet the physical demands of duty with the 
operating forces. This training focuses on improving cardiovascular 
endurance, and muscular strength and flexibility. The Marine Corps PFT 
measures these elements by requiring all Marines to complete a 3.0-mile 
run within prescribed time limits, do sit ups for two minutes and do 
pull ups (males) or flex arm hang (females). Passing the PFT is a 
recruit training graduation requirement.
    (2) Second, physical training develops self confidence. As recruits 
continually surpass their previous physical limits, confidence in their 
own abilities grows, as well as attaining a confidence and respect for 
their fellow recruits, helping to develop camaraderie and esprit.
    All recruit training is physically demanding, but nothing tests a 
recruit's physical condition like the 54-hour ``Crucible'' event in the 
eleventh training week. It is a realistic field exercise that is 
highlighted by food and sleep deprivation and mental and physical 
challenges. Successful completion of the ``Crucible'' is also a 
graduation requirement. We believe that Marine Corps physical fitness 
training is effective in developing the body and the mind of recruits 
and prepares them for the rigors of follow-on test, qualification with 
the service rifle, completion of the combat water survival test, 
mastery of general military subjects (academics), passing ``final 
uniform inspection'', and successful completion of the ``Crucible''. 
Recruits who fail any of these events, given that they display a 
desire/potential for completing training, are generally recycled. 
However, repeated failures are routinely discharged.
    (b) DI's continually evaluate each recruit's potential for 
completion of training, adjustment to military lifestyle and 
application of effort. At anytime during training, any DI has the 
``leeway'' to recommend for separation those recruits who either can 
not, or will not, adjust to the recruit training environment. 
Generally, this trait manifests itself early in the training cycle, 
resulting in early separations.
    Based on the above, the Marine Corps believes that current 
procedures provide adequate ``leeway'' for recruit trainers to identify 
and discharge potential failures early in the training cycle.
    g. Recommendation: ``Eliminate use of ``stress cards'' in the Navy.
    Comment. Not applicable.
4. Teaching professional relationships
    a. Recommendation: ``Improve instruction on how males and females 
should relate to each other professionally; eliminate ``no talk, no 
touch'' policies.''
    Comment. Professional Relationships. The Marine Corps is committed 
to developing positive, professional relationships between Marines of 
both sexes. It is believed that these types of relationships are best 
developed through a rheostat approach to gender integrated training.
    (1) Recruit Training:
    (a) The purpose of recruit training is simple--to make Marines. The 
young men and women who arrive at the recruit depots to begin that 
process are, for the most part, away from home for the first time. In 
general, they arrive with immature, undeveloped and unfocused thoughts 
on professionalism and professional conduct. The only thing they have 
in common is their desire to be a Marine. By capitalizing on that 
desire, recruit training transforms these individuals from many diverse 
backgrounds into Marines imbued with a common set of values and 
standards.
    (b) In the Marine Corps segregated recruit training environment, 
the strong, positive role of the DI provides impressionable young men 
and women appropriate role models without the distracting undercurrent 
of sexual attraction. For women, it also removes the stereotype that 
only men can be authority figures. They see strong female role models 
not only in control of them and their group, but also positively 
interacting with male DI's. As a result, women recruits very early in 
their training cycle come to realize that they can be strong, assertive 
leaders and that they do play an integral part in the success of the 
Corps. In short, gender segregated training provides an environment 
free from latent or overt sexual pressures, thereby enabling new and 
vulnerable recruits the opportunity to focus on and absorb Marine 
standards of behavior.
    (2) Marine Combat Training (MCT). Following graduation from recruit 
training, all non-infantry Marines, both male and female, are sent to 
MCT. Called ``Operation Leatherneck,'' it is a 17 day, scenario-based 
training exercise designed around a unit's notional deployment in an 
overseas contingency operation. Through this realistic and demanding 
field exercise, MCT provides Marines with the weapons and fieldcraft 
skills essential to operate and survive in a combat environment. At 
MCT, both male and female Marines are taught and led by male and female 
Marine Officers and Noncommissioned Officers. Both male and female 
Marines see a gender integrated chain of command function, see 
professional conduct between male and female leaders, experience their 
leadership in tough, night and day field conditions, and see both male 
and female leaders emplace machine guns and lead patrols. In sum, male 
and female Marines will see themselves as members of the same team 
committed to performing the same tough duties in the same dirty, 
mentally and physically demanding environment, and from that experience 
will develop an appreciation of each other as professionals.
    (3) Military Occupational Specialty (MOS) schools. Upon completion 
of MCT, all Marines report to follow-on MOS schools. Here, each Marine 
learns the specific technical skills necessary to effectively function 
as a productive member of an operational unit. These schools vary in 
length from weeks to months in duration. In all cases, they are ``fully 
gender integrated'' in that female and male Marines are now members of 
the same squads--the lowest organizational level. This final step in 
the gender integration process takes place only after Marines of both 
sexes have been provided strong, positive role models, both male and 
female; have had institutional standards of right/wrong and acceptable/
unacceptable behavior established and have shared the common hardship 
of simulated combat operations. At this point, they have gained 
sufficient appreciation for each other and have matured enough 
professionally to be organized into units exactly like those they will 
find in the operational Marine Corps.
    Sexual harassment. The Marine Corps is committed to eliminating 
sexual harassment and embraces the committee's recommendation of 
continually reinforcing sexual harassment training throughout the 
training continuum. At present, sexual harassment training exists at 
each step in the entry level training pipeline:
    (1) At recruit training, approximately 50 hours of instruction are 
devoted to teaching core values and standards of acceptable behavior. 
Specific periods of instruction on both sexual harassment and sexual 
responsibility are provided in both a classroom setting and a guided 
discussion format.
    (2) In Marine Combat Training (MCT), Marines receive six hours of 
core values reinforcement training, which include instruction on sexual 
harassment and sexual awareness.
    (3) At MOS schools, Marines receive one hour per week of additional 
core values reinforcement training. Commanders are provided the 
``Marine Corps Values and Leadership Users' Guide'' which allows 
discussion leaders to teach a wide range of subjects, to include sexual 
harassment.
    b. Recommendation: ``Enforce policies to eradicate disparaging 
references to gender.''
    Comment. The Standard Operating Procedures at the recruit depots 
outline the policy regarding ``standards of conduct.'' All Marines 
charged with the recruit training mission are guided by these 
standards. Hazing, maltreatment, abuse of authority, sexual harassment, 
or other illegal and unprofessional behavior are counterproductive 
practices and strictly forbidden. Marines in supervisory positions are 
charged to treat all recruits firmly, fairly, and with dignity, without 
profanity, vulgarity, or other disparaging reference to any group.
    In order to enforce the above policy, all recruit training 
activities are conducted and/or overseen by the Recruit Series Officers 
and Chief Drill Instructors. Supervision of the Series Officers and 
other Marines involved in training recruits is the responsibility of 
the recruit company and battalion staffs. Additionally, each Recruit 
Depot Inspector enforces standards of conduct through unannounced 
visits of training events.
    The importance of enforcing policies designed to eliminate 
disparaging references to gender will be a topic discussed at the 
annual ``Training and Education Conference'', currently scheduled for 
April 1998.
    c. Recommendation. ``Teach consistent rules on fraternization.''
    Comment. The Committee recommends that the term fraternization be 
used only in reference to service policies on this issue. Concur.
    d. Recommendation. ``Enforce tough punishments for false 
accusations regarding sexual harassment and misconduct.''
    Comment. The tradition and practice of the Marine Corps is to 
strictly enforce good order and discipline. Incidents involving false 
accusations of sexual harassment or misconduct are punishable under the 
Uniform Code of Military Justice, Article 107, Making a False Official 
Statement.
5. Advanced school
    a. Recommendation: ``Strengthen discipline continuum from basic 
training into advanced training in order to maintain high standards of 
discipline and military bearing throughout the training cycle.''
    Comment. The Marine Corps believes that the young men and women who 
graduate from recruit training have made the transformation from 
civilian to Marine. Significant efforts are made at MCT and the MOS 
producing schools to sustain that transformation. The Marine Corps 
discipline continuum from basic to advanced training is embodied in the 
Commandant's ``3 R's:'' Retain the spirit gained in recruit training by 
forming teams of Marines immediately after recruit training, assigning 
those teams to follow-on skill producing schools and subsequent 
assigning them to operational fleet units; Reinforce core values of 
honor, courage, commitment; Realize benefits during awaiting training 
time by utilizing training techniques such as distance learning, 
computer based training, and self paced instruction.
    Sustainment of the ``Transformation'' process begun at recruit 
training is the subject of an annual Training and Education Conference 
sponsored by the Commanding General, Marine Corps Combat Development 
Command. The conference provides a forum for periodic review of the 
entry level training continuum. Currently scheduled for late April 
1998, this year's conference will focus on reducing ``awaiting training 
time'' which is a contributing factor to reduced motivational levels 
and increased discipline problems in the MOS schools in particular.
    The committee noted that a Marine Corps ``advanced school'' curfew 
policy appeared to be not ``widely enforced''. School commanders 
establish local policies, to include curfews, based on many variables, 
including location, school curriculum, and class schedules. Enforcement 
of these policies is the responsibility of all Marines. Failure to do 
so is an abrogation of that responsibility and should be dealt with 
appropriately by the commanding officer. The importance of enforcing 
these policies will be a subject of discussion among all school and 
detachment commanders at the annual ``Training and Education 
Conference'', currently scheduled for April 1998.
    b. Recommendation. ``Prepare basic training graduates better for 
lifestyle changes in advanced school and prepare advanced school 
graduates better for the lifestyle changes in the operational units.''
    Comment. The key to building effective, cohesive gender integrated 
operational units is in creating a training environment that builds 
progressively to that end. The Marine Corps believes it has achieved 
that goal through a process that functions much like a rheostat, moving 
from gender segregation at recruit training, to partial gender 
integration at MCT, and finally to full gender integration at 
applicable MOS schools.
    Rape Awareness. During recruit training, instruction is provided to 
all female recruits (in two 30 minute sessions) that is designed to 
familiarize them with rape prevention, awareness, and risk reduction. 
Additionally, a period of instruction titled, Sexual Responsibility of 
the Marine, is presented to both men and women providing greater sexual 
awareness between the sexes. This period of instruction is being 
expanded to include greater sensitivity to rape awareness.
    Alcohol Abuse. Marine Corps Order P5300.12, The Marine Corps 
Substance Abuse Program states that; ``alcohol abuse is contrary to the 
effective performance of Marines and to the Marine Corps mission, and 
will not be tolerated.'' The Marine Corps objective is to eliminate 
alcohol abuse in its ranks. An essential step in achieving this goal is 
to change the attitude of Marines toward the use of alcohol. This is 
begun in recruit training where recruits receive 4 hours of either 
formal instruction or ``locker-box'' discussions on Substance Abuse. 
During Marine Combat Training, new Marines are provided six hours of 
core values reinforcement instruction that includes, among other 
things, Substance/Alcohol Abuse training. Additionally, Marines 
assigned to their follow-on MOS schools receive up to one hour per week 
of core values instruction that also include discussions on Substance/
Alcohol Abuse.
    c. Recommendation. ``Separate barracks for male and female 
students.''
    Comment. At Marine Corps or other service MOS schools, male and 
female Marines (no longer recruits) may be assigned to gender-
integrated barracks. These living conditions and training environment 
are similar to the living and working conditions Marines will 
eventually find at their permanent duty stations and represent a 
logical and proper transition from recruit to unit lifestyle.
    d. Recommendation. ``Review initial entry training curricula to 
shift more training into IET in order to reduce the training 
requirements of the operational units.''
    Comment. The Marine Corps concurs with the Committee's approach.
    Because of the ``expeditionary nature'' of the Marine Corps, each 
Marine must be prepared to deploy upon reporting to an operational 
unit. This requirement explains why Marine Corps entry level training 
is longer than that of other Services, and why Marine Combat Training 
(MCT), is conducted for all non-infantry Marines (male and female) 
following recruit training. This training, in conjunction with follow-
on MOS training, ensures all Marines are trained and able to fight and 
survive in a combat environment. This front-end training concept 
eliminates the requirement for operational units to conduct entry level 
training and allows them to focus on orienting new Marines to unit 
standard operating procedures.
    In 1996, the Marine Corps began a comprehensive training review 
focusing on core competencies. This review has resulted in a 
reorganization and revision of several entry level training programs:
    (1) In October 1996, recruit training became a 12 week regimen for 
male and female recruits. Extending recruit training provided DI's 
additional mentoring time, increased core values instruction provided 
to recruits, and implemented a ``Crucible'' that is the culmination of 
the recruit training experience.
    (2) In January 1997, MCT was restructured into a 17 day training 
program that greatly improved combat skills instruction for non-
infantry Marines. ``Operation Leatherneck'' as it is called, is a 
comprehensive scenario-based training exercise designed around a unit's 
notional deployment in an overseas contingency operation. MCT provides 
all non-infantry Marines with the weapons and fieldcraft skills 
essential to operating and surviving in a combat environment.
    (3) In October 1997, the Program of Instruction at the Infantry 
Training Battalion, School of Infantry, was redesigned to provide a 
greater focus on weapons proficiency, night combat operations, and 
combat in an urban environment. The end result is that basic infantry 
Marines are better prepared prior to their arrival at operational 
units.
    (4) In February 1998, the review of MOS schools curriculum 
continued with an analysis of the Communications (MOS 2500) 
Occupational Field. Ultimately, all occupational fields will be 
reviewed with the goal of reducing training time and providing a better 
trained Marine to operational commanders.
6. Values training
    a. Recommendation. ``Improve values training in all initial entry 
training programs.''
    Comment. We concur that values training and reinforcement 
throughout the entry level training process is a critical aspect of 
making Marines. On 1 October 1996, the recruit depots implemented 
significant changes to the focus and content that included a 
significant increase in core values training, totaling more than 50 
hours of instruction, scenario-led discussions, and training 
reinforcement critiques.
    The most notable enhancement to recruit training is the addition of 
a ``Crucible'' event that is intended to test the mettle of every 
recruit and mark the culmination of recruit training. As a true rite of 
passage from recruit to Marine, the Crucible is a 54-hour field 
training evolution highlighted by food and sleep deprivation and an 
optempo that poses continuous physical and mental challenges, while 
emphasizing core values and the importance of teamwork in overcoming 
adversity.
7. Training resources
    a. Recommendation. ``Increase training resources to improve 
staffing and infrastructure.''
    Comment. The Marine Corps has made a conscious effort in dedicating 
resources to recruit training. Since fiscal year 1992, our investment 
in recruit training infrastructure and base operating support has grown 
from an annual expenditure of $54,700,000 to our current fiscal year 
1999 President's Budget request of $70,800,000. Our investment in 
direct recruit training has also grown from $196 per recruit annually 
to $247 per recruit during the same respective period. We support the 
committee's interest in recognizing the need for DoD to commit funding 
to training and believe that we have been meeting this objective.
    Air Force Answer. The Air Force has conducted gender-integrated 
training since 1976 and continues to look for ways to improve the 
process. During the past 22 years we have fined tuned our program and 
feel our current training system works well. The Kassebaum-Baker Report 
afforded us an additional opportunity to review our programs and make 
further improvements in the way we train. The end result will be a 
great training program made even better.
    Question. What is your understanding of the Secretary of Defense's 
role in coordinating your recommendations with those of the other 
services?
    Army Answer. I know of no plan for the Secretary of Defense to 
coordinate Army recommendations with the other services.
    Navy Answer. It is my understanding that my recommendations will be 
received, discussed and considered then forwarded by my chain of 
command to the Secretary of the Navy, who will provide recommendations 
on the subject to the Secretary of Defense. I am confident that my 
views will be adequately represented and considered in any policy 
decision on this subject that the Secretary of Defense announces.
    Marine Corps Answer. It is expected that each Service will provide 
input to the Office of Secretary of Defense and that some decisions 
will remain services prerogatives, while others will become DoD policy 
and guidelines.
    Air Force Answer. The Air Force understands OSD's role is to 
evaluate the Services' inputs and ensure training programs meet mission 
needs and provide a safe/secure training environment.

                            Training Issues

    Question. With regard to either basic combat training or advanced 
individual training, what is the ratio of recruits to trainers for your 
service? Do you consider this ratio too high or too low at your 
training facilities?
    Army Answer. The ratio of Drill Sergeants is one for every 17 to 20 
recruits in Basic Combat Training, and one for every 50 recruits in 
Advanced Individual Training. These ratios have remained fairly 
constant since the early 1970's. These are probably about right, but 
Training and Doctrine command is conducting a manpower study to 
validate that these ratios are adequate to ensure trainee supervision.
    Navy Answer. At recruit training, the ratio of recruits to Recruit 
Division Commanders (RDCs) is 84:3. For classroom instructors the ratio 
varies depending on the particular course of instruction; the highest 
ratio is 168:1. The 84:3 ratio is adequate but not optimum. The 
classroom ratio is adequate but pushing close to the limit. In some 
high-risk areas (e.g., water safety instructors) it is a challenge to 
maintain an adequate number of specialists.
    In advanced individual training, the classroom ratio is mostly 25:1 
and is adequate.
    Marine Corps Answer. The Marine Corps student to instructor ratios 
vary throughout the training continuum. This continuum begins with 
recruit training, progresses to Marine Corps Training (MCT), and leads 
to specialized skill training that will enable a Marine to perform in a 
certain Military Occupational Speciality (MOS).
    Average examples of student to instructor ratios:
    Recruit Training: 1 Drill Instructor: 15/20 Recruits.
    Marine Combat Training: 1 Squad Leader/Instructor: 12 Students.
    Military Occupational Specialty (MOS): Vary from 1:1 to 1:18.
    MOS: These ratios vary during the months of June thru September 
when the Marine Corps receives the highest number of recruits (as well 
as its highest quality.)
    Air Force Answer. Air Force Basic Military Training (BMT) ratio of 
recruits to trainers is 80 trainees to 1.5 Military Training 
Instructors (MTIs). At Advanced Training the ratio is 57 trainees for 
every Military Training Leader (MTL). The Air Force completed a study 
of manning at both BMT and Advanced Training and decided to add more 
trainers in both areas. Accordingly, we have added 61 more MTIs at BMT 
and 42 more MTLs at Advanced Training into our fiscal year Program 
Objective Memorandum (POM). We are working to fill these positions as 
soon as possible.
    Question. Do you feel that your drill sergeants and other 
instructors are adequately trained and prepared for this job? What 
selection process are they subjected to?
    Army Answer. Yes. I believe they are trained and prepared to do 
their jobs. However, we have taken a close look at the training to see 
where it could be improved. In January, the Training and Doctrine 
Command (TRADOC) completed its review of the Drill Sergeant (DS) 
Program of Instruction (POI) at the Drill Sergeants Course. As a result 
of this review, TRADOC has revised TRADOC Regulation 350-6 to emphasize 
instructor and trainer relationships with trainees. Thirty-nine hours 
of ethics and values training will be added to the DS POI. Training on 
ethics and values will begin in August once Training Support Packages 
have been received at TRADOC.
    The Army has also initiated additional screening requirements to 
ensure only the highest quality personnel are selected for drill 
sergeant duty. Since August 1997, the following new procedures 
concerning drill sergeant selection have been initiated: mandatory 
commander's recommendation (Lieutenant Colonel or higher), mental 
health evaluation to determine emotional stability, screen of each 
candidate's complete official military personnel file (to include the 
restricted portion), and a check of Military Police and Criminal 
Investigation Division's records. The Army is also conducting a study 
to determine the best way to use additional psychological screening as 
tools in drill sergeant selection.
    Navy Answer. Yes. Instructors are screened by their Commanding 
Officers, in accordance with the guidelines of the Enlisted Transfer 
Manual, to ensure assignment of only the highest quality people to 
successfully and safely train our future leaders. Because Recruit 
Division Commanders (RDCs) attend Instructor Training school before 
attending RDC school, they must meet the screening criteria for both 
instructors and RDCs. RDC candidates are given an additional, 
comprehensive screening that covers even more time and aspects of the 
individual's career and character than the baseline instructor 
interview. The RDC process is also in accordance with the guidelines of 
the Enlisted Transfer Manual.
    Marine Corps Answer. The Marine Corps Drill Instructor (DI) 
epitomizes the title ``Marine.'' The DI's sole responsibility is to 
take American men and women and transform them into Marines, as they 
are both a role model and a mentor to recruits while they are in 
recruit training. To this end, the Marine Corps devotes a great deal of 
time and effort in the screening, selection and training of DI's.
    There is extensive screening of all prospective Marine Corps DI's 
prior to and during their training program. A four-phase screening 
process begins with an initial screening at the Enlisted Assignments 
Branch, HQMC with a thorough review of the Marine's official military 
personnel file. In accordance with MCO 1326.6C, Selecting, Screening, 
and Preparing Enlisted Marines for Drill Instructor, recruiter, and 
Independent Duties, the second and most critical screening is 
undertaken by the Marine's Commanding Officer (CO). It is the CO who 
knows and works with the candidate and truly plays the most important 
role in the screening process because of their personal knowledge of 
the individuals and access to the Marine's service records and 
performance information not readily available to HQMC. The CO's 
screening is designed to assess whether the potential DI has the 
maturity, leadership, and judgment required for making Marines.
    The CO's screening encompasses the following areas:
    A. Education (DI education should equal the majority of recruits).
    B. Disciplinary record.
    C. Medical qualification.
    D. Physical fitness (Required 1st Class Physical Fitness Test 
score).
    E. Height/weight and/or body fat standards.
    F. Financial stability.
    G. Family stability (Not currently enrolled in family advocacy 
programs).
    Following acceptance to DI School, the screening process continues 
throughout the course of instruction by the DI School staff (all former 
DI's). The staff evaluates the students vis-a-vis the Marine Corps' 
Individual Training Standards established for the DI MOS (8511), which 
require evaluation through written and/or performance tests. The staff 
also evaluates the students desire, commitment, integrity, character, 
and core values. Early in the training process, the students complete a 
psychological profile administered by the Mental Health Unit (MHU) 
aboard each recruit depot. The profile is designed to identify 
``potential risk drill instructors.'' The MHU staff screens the results 
and has historically directed 10-15 percent of each class to complete 
additional evaluative testing via the MMPI-1 test, which is a more 
comprehensive psychological testing and screening tool. The MHU staff 
screens the results and interviews students who display specific 
indicators which may pose future problems as a DI. Historically, one to 
two students per year at each DI School fail psychological screening 
and are disenrolled. The final screening is an ongoing evaluation 
process conducted by the RTR throughout the DI's three year tour. The 
process includes performance evaluations after each recruit training 
evolution to ensure only quality Marines are training our recruits.
    As a prerequisite to becoming a DI, an enlisted Marine must 
complete an intense 12-week course. During this period of instruction 
DI students undergo both formal instruction, practical application, and 
written examination, totaling 513 hours of instruction in Standard 
Operating Procedures, Physical Training, Field Skills, Leadership, 
General Military Subjects, Weapons, Instructional Techniques, Close 
Order Drill, and Core Values. In essence, each DI candidate completes 
the recruit training syllabus, resulting in intimate understanding of 
the rigors and stresses an experienced by recruits during training. To 
provide hands-on experience (field work), each student is required to 
``observe'' a recruit platoon in training for up to five days. During 
this period the student is given a limited opportunity to engage in 
training and, most importantly, a chance to interact with recruits. 
Upon completion of DI school, new DI's are assigned to ``veteran'' 
teams which allows for mentoring and the continuing development of 
younger, less experienced DI's.
    The screening, selection, and incentives described above have 
served the Marine Corps well by providing Marines of exceptional 
character and ability to serve as recruit trainers.
    Air Force Answer. Yes. Air Force Military Training Instructors 
(MTIs) and Military Training Leaders (MTLs) are adequately trained for 
their jobs, and the Kassebaum Report noted the Air Force's program as 
the benchmark. MTIs undergo a fourteen week program with heavy emphasis 
on field situations. Training includes three weeks of classroom 
instruction followed by eleven weeks of field work under the 
supervision of an experienced trainer. MTI candidates are instructed, 
tested, and evaluated by a certified MTI Instructor School faculty 
member. After certification, MTIs receive two hours of refresher 
training monthly, an annual refresher briefing on sexual harassment, 
and must certify semi-annually that they understand the Air Force and 
command directives on professional and unprofessional relationships and 
conduct.
    MTLs receive one week of local training on a standardized syllabus 
and attend the first two weeks of the MTI school at Lackland. They also 
receive annual refresher training.
    The Air Force complies with all Kassebaum recommended screening 
actions for both MTIs and MTLs. MTI/MTL duty is voluntary, and all 
applicants are screened to ensure they meet requirements, which clearly 
exceed those required for routine assignments accepted.
    Question. What does it cost to train a new recruit, and what 
percentage of your new recruits fail to complete their first tour of 
duty?
    Army Answer. The average cost to train a new service member is 
$18,308. This includes $5,075 for basic combat training and $13,233 for 
advanced individual training. Fiscal year 1997 attrition showed 34 
percent of new service members fail to complete their first tour of 
duty.
    Navy Answer. Expressed in fiscal year 1997 dollars, the cost to 
train a new recruit is $6,692 for 65 days of training, including 
instructor pay and operations and maintenance costs. Approximately 37 
percent of new recruits fail to complete their first Enlistment.
    Marine Corps Answer. The average cost to train an enlisted Marine 
for his/her first permanent duty station is as follows:

------------------------------------------------------------------------
                                                      Fiscal year--
                                               -------------------------
                                                    1998         1999
------------------------------------------------------------------------
Operation and Maintenance, Marine Corps.......       $1,799       $1,847
Military Personnel, Marine Corps..............       17,910       17,910
Procurement of Ammunition, Navy and Marine            (\1\)        1,246
 Corps........................................
                                               -------------------------
      Total...................................       19,709       21,003
------------------------------------------------------------------------
\1\ Ammunition data prior to fiscal year 1999 does not allow for a
  breakdown of costs down to the individual school. Fiscal year 1999
  costs are only for enlisted entry level MOS producing courses.

    These costs do not include costs budgeted by other armed services 
to train Marines at other service locations.
    Approximately thirty-three percent of Marines fail to complete 
their first tour of duty. A third of this attrition occurs at the 
Marine Corps Recruit Depots.
    The attrition rate for fiscal year 1997 was 13.4 percent for 
recruit training (Male and Female combined). Attrition by months of 
service is as follows:

                              [In percent]
------------------------------------------------------------------------
                                               Month        Cumulative
            Months of service                attrition       attrition
------------------------------------------------------------------------
00 to 06................................            11.5            11.5
07 to 12................................             4.8            16.3
13 to 24................................             6.5            22.8
25 to 36................................             6.3            29.1
37 to 45................................             4.0            33.1
------------------------------------------------------------------------

    Air Force Answer. On average, it costs $27,502 to train a new 
recruit. This includes $12,654 for Basic Military Training (BMT) and 
$14,848 for advanced training. Costs include fixed and variable 
military pay, civilian pay and O&M in fiscal year 1998 dollars. The 
average advanced training course is 10.2 weeks long.
    Approximately 33 percent of new recruits fail to complete their 
first tour of duty. Attrition includes approximately 9 percent in BMT 
and 24 percent post BMT.
    Question. With the force reductions the Department has experienced, 
does your service have a shortage of drill sergeants or instructors?
    Army Answer. We believe we have a sufficient number of drill 
sergeants in the training base. However, manpower shortages in the 
Basic Combat Training, Advanced Individual Training, and One-Station 
Unit Training support structure periodically require training units to 
employ drill sergeants in other than drill sergeant duties for a short 
duration. Training and Doctrine Command policy precludes permanently 
assigning drill sergeants to other than drill sergeant duties, and 
training support taskings are kept to the absolute minimum required for 
mission accomplishment. We are working to minimize the use of drill 
sergeants outside of their training responsibilities by increasing 
Initial Entry Training (IET) support structure authorizations to a 
level commensurate with IET workload. We do experience the same spot 
shortage of instructors as we do with other noncommissioned officers in 
the force.
    Navy Answer. Yes, there is a shortage of instructors at recruit 
training. The instructors at recruit training are currently manned at 
only 64 percent of Budget Authority. Recruit Division Commanders are 
currently manned at 80 percent of BA. The Bureau of Personnel (BUPERS) 
is optimistic that by the end of the summer we will be at 100 percent 
for RDCs. Additionally, we are reviewing several alternates designed to 
increase the number of qualified women RDCs.
    In the advanced individuals training there is not a shortage of 
instructors.
    Marine Corps Answer. The small force reduction in the Marine Corps 
has not resulted in a shortage of Drill Instructors. We continue to 
staff our recruit depots at Parris Island and San Diego with the 
necessary number of Drill Instructors, nearly all of whom are 
volunteers for this prestigious Special Duty Assignment.
    Air Force Answer. We recently reviewed our instructor manning and 
decided to add an additional 61 Military Training Instructors and 42 
Military Training Leaders at Basic Military Training and Advanced 
Training. These positions were added to the fiscal year 2000 Program 
Objective Memorandum (POM). In the past, we have had a sufficient 
number of volunteers to fill these positions. The Air Force maintains a 
strong commitment to keeping instructor positions fully manned.
    Question. What is the estimated cost to implement the 
recommendations in the Kassebaum report?
    Army Answer. The Training and Doctrine Command is currently 
conducting a study to determine the costs to provide separate and 
secure living areas by gender. The study will determine the cost of 
improved lighting in and around the barracks, door alarms, and other 
separate and secure related improvements. This detailed study should be 
completed by the Summer of 1998. The upgrade of latrine facilities to 
improve living conditions in separate and secure living areas by gender 
will cost approximately $6.8 million.
    Navy Answer. The total estimated costs to implement the 
recommendation in the Kassebaum report are not available at this time 
since numerous initiatives are still under review.
    Marine Corps Answer. The Marine Corps presently billets its male 
and female recruits separately. There is no additional funding required 
to implement separate barracks as recommended in the Kassebaum Report. 
We do have included in the outyears of the Five Year Defense Plan 
(FYDP), a request for Military Construction funds to build a new Women 
Marine recruit barracks.
    Air Force Answer. Implementing each recommendation of the Kassebaum 
Report would definitely drive a bill for the services. The Air Force 
has completed a very preliminary review of the costs associated with 
the report; however, we have not accomplished a complete analysis of 
this prospect since we are not recommending adoption of each 
recommendation.
    Complete implementation of the report would require additional 
funding for military construction and personnel as well as additional 
recurring cost associated with personnel and modified procedures.
    Preliminary evaluation indicates that an additional $56.5 million 
(one time cost) would be incurred as well as $5.9 million in annual 
recurring costs. This is not an exhaustive list. Additional funding for 
undetermined manpower and additional operating expenses associated with 
changes to current procedures would be required. We are not able to 
fully determine these costs at this time.

                   Military Operations Other Than War

    Question. Most of the contingency operations which have been 
supported by U.S. forces since the beginning of this decade have not 
involved combat. Such Military Operations Other Than War have placed 
new training requirements on the U.S. armed forces since the rules of 
engagement and the basic objectives of these operations differ from 
combat operations. Has the need to prepare your personnel for Military 
Operations Other Than War altered your readiness training programs?
    Army Answer. All training programs contribute to readiness; 
however, the Army maintains a high degree of readiness by training to 
meet and defeat the most dangerous potential threat to our national 
security--high intensity combat operations. Our preparation to meet 
this threat, combined with our outstanding leader development programs 
provides a safety net that allows us to confidently execute shaping 
missions under varying threat conditions. Our experience is that prior 
to deployment for operations other than war we have time to train up 
for the specific threat. The same is true for the reverse. When the 
warplan calls for a unit to deploy for possible engagement in high-
intensity combat, we believe that with a minimum of time to train up, 
there will be no degradation of those skills needed to win on the 
battlefield. However, we are not complacent. We are continually 
modernizing our training strategies to adjust to changing threat 
conditions. As an example, the role of the Combat Training Center 
experience (the ``crown jewel'' of our training system) will be 
changing. We are looking at expanding their role in training for the 
varied threats we anticipate our soldiers will face in the years ahead. 
This training will not dilute or detract from our warfighting focus, 
but it will place additional emphasis on emerging threats, such as 
urban combat and the greater intermingling of combatants and 
noncombatants on the battlefield.
    Navy Answer. No.
    Marine Corps Answer. While some Military Operations Other Than War 
(MOOTW) specific training is conducted prior to and during deployments, 
this has not altered our readiness training programs. The primary 
training that Marines receive to ensure their readiness for deployment 
covers the full spectrum of conflict. This full spectrum training is 
directly applicable to the operational demands encountered in MOOTW. We 
prepare for MOOTW primarily through rigorous training in the more 
exacting standards required of conventional combat operations. This 
approach ensures that Marine units are cohesive and well disciplined to 
operate in any contingency/crisis environment. This training is 
directly applicable to the operational demands encountered in MOOTW.
    Well trained and disciplined Marines with knowledge of standing 
CJCS rules of engagement (ROE) are the key to dealing with MOOTW 
operations. Current Marine Air Ground Task Forces (MAGTFs) are fully 
prepared to function effectively in ``peacetime engagements'' 
including: Disaster relief/humanitarian assistance; Friendly coalition 
building; Noncombatant emergency evacuation (NEO); Counterdrug 
programs; Arms control/treaty compliance; and Military training teams.
    The strategic, rapid response requirements of Marine operating 
forces, however, argue against their significant long term retention 
ashore for MOOTW. Continued long term involvement in peacekeeping or 
similar operations may degrade combat effectiveness. This may occur 
either through insufficient training opportunities in primary combat 
skills for deployed units.
    Air Force Answer. Military Operations Other Than War have not 
significantly altered our training. Our units train and are prepared to 
respond to the full spectrum of taskings required by the National 
Military Strategy.
    Question. If not, how do you prepare your personnel for the rules 
of engagement in circumstances such as those encountered in Bosnia 
which are fundamentally different from combat?
    Army Answer. The rules of engagement are theater-specific and each 
soldier deploying to Bosnia trains to a standard. It is certified by 
trainers from the 7th Army Training Center, or, if conducted at home or 
mobilization stations, by trainers who have been certified through the 
train-the-trainer program.
    Navy Answer. There has not been a change in the way we train our 
forces prior to deployment. During the course of normal preparations, 
exercises such as COMPUTEX (Composite Unit Training Exercise) and JTFEX 
(Joint Training Force Exercise) stress the procedures, policies, and 
rules of engagement for the expected missions which will be encountered 
during deployment. Additionally, our forces train to secondary missions 
which may be required of them dependent upon unexpected contingencies. 
Rules of engagement for all theaters are carried with our battle force 
units so that we retain the flexibility to move wherever required and 
be ready upon arrival.
    Marine Corps Answer. The primary training that Marines receive in 
preparation for deployments overseas and aboard amphibious ships (MEUs) 
covers the full spectrum of conflict. This training is directly 
applicable to the demands encountered in military operations other than 
war (MOOTW). Well trained and disciplined Marines with knowledge of 
standing CJCS rules of engagement (ROE) are the key to dealing with 
MOOTW operations and any applicable supplemental ROE. Today, Marine Air 
Ground Task Forces (MAGTFs) are fully prepared to function effectively 
in ``peacetime engagements'' to include:
          1. Disaster relief/humanitarian assistance;
          2. Friendly coalition building;
          3. Noncombatant emergency evacuation;
          4. Counterdrug programs;
          5. Arms control/treaty compliance;
          6. Military training teams.
    Our maritime nature and multi-dimensional capabilities make Marines 
uniquely suited for MOOTW contingencies. While deployed, many of the 
exercises that Marines conduct are structured around peacekeeping 
scenarios.
    Air Force Answer. Specific training on rules of engagement is added 
to the normal training requirements prior to deployment and is 
constantly reviewed in the theater of operations.
    Question. If so, what effect has this change had on the readiness 
of your personnel to accomplish their wartime missions?
    Army Answer. Contingency and peace operations sometimes enhance or 
degrade a unit's combat readiness, depending upon the type of unit and 
the nature and duration of the mission. Combat Service Support (CSS) 
units, such as medical and transportation units, are the least likely 
to suffer degraded readiness due to participation in peace operations, 
since their wartime mission is usually very similar, if not identical, 
to their peace operation mission. Combat (CBT) and combat support (CS) 
units, such as infantry and signal units respectively, are prone to 
lose warfighting readiness more rapidly during peace operations. This 
is to be expected since CBT and CS wartime missions are dramatically 
different from peace operations.
    Additionally, there is a readiness bill associated with all small 
scale contingency deployments. When we deploy an Army unit to a 
potentially hostile environment where its performance could 
dramatically affect national policy and prestige, that unit is provided 
all of the training, personnel, and equipment resources needed to 
maximize its chances of success. It is brought to the highest standard 
of readiness which time and resources allow. The bill payers are the 
non-deploying units. This readiness bill is the price we pay for 
accomplishing our Nation's policy of shaping the international security 
environment in ways favorable to U.S. interests.
    Marine Corps Answer. Well trained and disciplined Marines with 
knowledge of standing CJCS rules of engagement (ROE) are the key to 
dealing with MOOTW operations and any applicable supplemental ROE. 
Today, Marine Air Ground Task Forces (MAGTFs) are fully prepared to 
function effectively in ``peacetime engagements'' to include:
          1. ROE training;
          2. Disaster relief/humanitarian assistance;
          3. Friendly coalition building;
          4. Noncombatant emergency evacuation;
          5. Counterdrug programs;
          6. Arms control/treaty compliance;
          7. Military training teams;
          8. Civil disturbance;
          9. Battle staff planning for MOOTW.
    Our maritime nature and multi-dimensional capabilities make Marines 
uniquely suited for MOOTW contingencies. While deployed, many of the 
exercises that Marines conduct are structured around peacekeeping 
scenarios. While some Military Operations Other Than War (MOOTW) 
specific training is conducted prior to and during deployments, this 
has not altered our training programs.

             Bosnia and Southwest Asia Supplemental Request

    Question. Gentlemen, as you know, the Department recently sent a $2 
billion fiscal year 1998 supplemental request to Congress to cover the 
costs of ongoing operations for Bosnia and Southwest Asia. In your 
opinion, do you feel we can continue to sustain the U.S commitments 
around the world given the continuous deployments to the Persian Gulf 
and now the extended deployments to Bosnia?
    Army Answer. If we are provided the resources to perform these 
missions and we take care of our soldiers and families at home station, 
we can sustain these missions.
    Navy Answer. Yes. The Navy is supporting these commitments with 
regularly scheduled forward-deploying forces. In the short term, this 
will not affect readiness. However, unfunded contingencies result in 
funds being diverted from non-deployed forces. This negatively impacts 
the balance of current readiness across the force by delaying equipment 
repairs and disrupting training. In the long term, these commitments 
can be maintained but will present the Navy with some challenges. If 
two carriers remain a requirement in the Gulf, a condensed Inter-
Deployment Training Cycle (IDTC) will be required and some work, 
scheduled to be accomplished during upcoming ship and aircraft 
maintenance availabilities, will be deferred.
    Marine Corps Answer. The Marine Corps can continue to sustain its 
requirements to commitments around the world, even when considering the 
ongoing deployments to Bosnia and Southwest Asia. Most contingency 
response requirements are absorbed by the forward deployed units of our 
regularly scheduled rotational forces. While most of the costs 
associated with these deployments are already budgeted, there are some 
additional expenditures which must be reimbursed. Our supplemental 
funding request includes a small amount of incremental funding to 
support costs associated with operations in Bosnia ($2.5 million) and 
Southwest Asia ($9.4 million), as well as $30.8 million to cover storm 
damages.
    It is critical that these costs be reimbursed; otherwise, they will 
have to be absorbed by a combination of operating forces support (i.e., 
reductions to training and equipment maintenance), and the already 
underfunded area of base and station support. The Marine Corps is 
currently ready to meet the taskings of the National Command Authority 
and will remain so as long as possible; funding current readiness first 
and foremost, to the detriment of other areas.
    Air Force Answer. The Air Force is able to fulfill its mission 
taskings. However, several aircraft weapons systems will exceed the Air 
Force desired TEMPO rates. By June 1, 1998, 13 of 27 flying Air Force 
units deployed in support of Operation SOUTHERN WATCH would have an 
average TDY rate for the entire squadron of greater than 120 days. The 
combined effects of contingencies with the need to do exercises, 
inspections, and training back at home to maintain combat readiness, 
are stressing our people--the backbone of Air Force readiness.
    Question. The Service Chiefs have provided the Congress with 
letters detailing some of the impacts to training and near term 
readiness if the Supplemental request is not approved in a timely 
fashion, or if the Supplemental has to be offset within the Department. 
Can you provide us with some specific examples of impacts to the 
enlisted forces if combat training, home station training, depot level 
maintenance, and other quality of life funds are not restored?
    Army Answer. Ground operating tempo (OPTEMPO) must be funded to 
achieve Land Forces Training Readiness objectives at the T1/T2 level in 
order to accomplish the roles and missions assigned in the National 
Defense Policy. The fiscal year 1998 budget is already down 
$220,000,000 from the President's Budget for fiscal year 1998. To delay 
a precipitous fall in readiness and maintain T-1/T-2, funding 
programmed for other necessities would have to be redirected to 
OPTEMPO. Non-essential services will have to be severely curtailed in 
order to maintain funding for training readiness.
    Our Major Commands (MACOMs) expect that they will have to take one 
or more of the following actions: delay needed upgrades of dining 
facilities; deferring Year 2000 fixes; defer purchases of spare parts; 
defer force protection upgrades; limit real property maintenance to 
emergency repairs only; and defer the Hazardous Materials disposal 
program. As in the past, the MACOMs also project that they may have to 
limit the availability of morale and welfare opportunities for soldiers 
and their families. In short, we would have to trade off the quality of 
life for our soldiers and their families.
    Navy Answer. If the Department is required to absorb the cost of 
contingency operations within the Department of the Navy topline, the 
Department would defer approximately 13 ship depot maintenance 
availabilities, 3,300 military personnel Permanent Change of Station 
(PCS) moves, and delay 700 Selective Reenlistment Bonus (SRB) 
contracts. By deferring these requirements, it means our Sailors will 
have to work harder and longer in a condensed period of time to ensure 
they are ready to deploy. Such actions negatively impact the quality of 
life of our Sailors.
    Marine Corps Answer. If the contingency and storm damage amounts 
requested by the emergency supplemental bill are not restored, the 
following represent some of the projected impacts on the Marine Corps 
as the $42.7 million cost is absorbed:
    Delays in equipment maintenance and refurbishment.
    Cancellation of 2 of 10 of this fiscal year's Combined Arms 
Exercises (CAXs), the major training evolution within the Marine Corps.
    A 23 percent reduction in MEU(SOC) training.
    Cancellation of F/A-18 hangar repairs at Miramar Marine Air Station 
in California due to ``El Nino'' storm damage.
    Cessation of bridge repairs at Camp Pendleton, California due to 
``El Nino'' storm damage.
    4 storm damaged messhalls at Camp Pendleton will remain closed due 
to ``El Nino'' storm damage.
    Air Force Answer. If the Supplemental request is not approved in a 
timely fashion, or if the Air Force is required to offset it 
internally, there will be a direct and immediate impact on training and 
near term readiness which will effect both the enlisted and officer 
corps. Specifically, we will be forced to defer programmed depot 
maintenance, terminate non-contingency aircrew training, postpone 
quality of life initiatives, terminate various real property 
maintenance contracts, and begin civilian furlough actions. The impacts 
of such actions would include grounding of aircraft through the end of 
the fiscal year, deferral of programmed aircraft modifications, a rapid 
decline in proficiency and readiness, loss of special combat 
capabilities, increased risks to health and safety, and a reduction in 
quality of life across the board.
    Question. Explain how units, who are not deploying to Bosnia, the 
Persian Gulf, or other operations, have been affected by the shortage 
of funds.
    Army Answer. In executing the National Military Strategy, the 
``shaping and preparing'' pillars are funded in the President's budget, 
but actual operations, such as Bosnia and Southwest Asia are not funded 
in advance, but often rely Congressional action. Therefore, commanders 
are forced to migrate funds from on training accounts to pay for 
contingency costs as they occur until Congress provides supplemental 
funding. Consequently, training for non-deploying units differs, 
Additionally, there is a readiness bill associated with all small scale 
contingency deployments. When we deploy an Army unit to potentially 
hostile environment where its performance could dramatically affect 
national policy and prestige, that unit is provided all of the 
training, personnel, and equipment resources needed to maximize its 
changes of success. It is brought to the highest standard of readiness 
which time and resources allow. The bill payers are the non-deployers 
units. Further, individual soldiers and equipment items from non-
deploying units are often provided as augmentations to deploying units 
in order to tailor the deploying unit for a specific non-combat, 
contingency mission. This readiness bill is the price we pay for 
accomplishing our Nation's policy of shaping the international security 
environment in ways favorable to U.S. interests within a constrained 
budget.
    Navy Answer. As a result of unfunded contingencies, funds have been 
diverted from non-deployed forces. This leads to readiness degradation 
among these units. Specifically, it hampers non-deployed units from 
ordering the necessary parts and performing the essential repairs 
needed to improve the material condition of our ships and planes 
between deployments and during training work-ups. Consequently our 
Sailors have to work harder and longer in a condensed period of time to 
ensure they are ready to deploy. Such actions negatively impact the 
quality of life of our Sailors
    Marine Corps Answer. The Marine Corps answers most crisis response 
deployments with our regularly scheduled rotational forces. While most 
of the costs associated with these deployments are already bought and 
paid for, there are a few additional expenditures which must be 
reimbursed. Since the Marine Corps funds current readiness first and 
foremost, to the detriment of other areas such as quality of life 
(QOL), modernization, base maintenance and even the training funds of 
units not yet deployed, we may see a degradation in the readiness of 
those units who remain at home. Fiscal priority is given to those units 
forward deployed or preparing to deploy. This is a normal part of 
cyclical Marine readiness based on deploying unit life cycles.
    In the last two years, the Marine Corps has seen the readiness of 
those units remaining in the rear slowly degrading farther than what we 
have previously experienced. While these degradations are not yet major 
insurmountable shortcomings, they are a sign of eroding readiness. Most 
of the degradation is due to our greatest potential readiness problem, 
our aging equipment.
    As equipment continues to age, it requires more maintenance-greater 
costs to maintain and repair and greater personnel demands in order to 
keep it in an acceptable state of readiness. The best solution for this 
aging equipment is modernization. Retooling spare parts assembly lines 
is too slow and too expensive, and only serves to treat the symptoms of 
the aging equipment problem. The real solution of this eroding 
readiness is through modernization of the force. By improving force 
modernization, we can potentially save millions of dollars in repairs, 
maintenance and spare parts costs, as well as preserving the well-being 
of our greatest asset--our Marines.
    At present, the readiness ratings of our non-forward deployed units 
remains just barely acceptable. We are able to fund spare parts costs 
and keep our squadrons flying and our infantry battalions ready to 
fight. Without the requested emergency supplemental funding, current 
readiness will be maintained, but somewhat at the expense of our forces 
in the rear. Lack of the supplemental funding will serve to further 
exacerbate the readiness degradation that must be born by our non-
forward deployed forces in terms of equipment maintenance, training, 
and support of our bases and stations.
    Air Force Answer. The current ongoing deployments to Bosnia and the 
Persian Gulf have not inhibited our overall ability to support the 
National Military Strategy of the United States. Those units remaining 
stateside are still capable of successfully performing their assigned 
missions. However, without timely passage of the Supplemental request, 
these units will experience impacts in a wide range of areas, including 
required proficiency training and base support activities. Funding to 
support direct readiness requirements, including spare parts, remains a 
top priority at all levels of the Air Force. If the Supplemental 
request is not approved in a timely fashion, the Air Force will be 
required to offset it internally, with resultant impacts on non-
deployed units. Specifically, we will be forced to defer programmed 
depot maintenance, terminate non-contingency aircrew training, postpone 
quality of life initiatives, terminate various real property 
maintenance contracts, and begin civilian furlough actions. The impacts 
of such actions would include grounding of aircraft through the end of 
the fiscal year, deferral of programmed aircraft modifications, a rapid 
decline in proficiency and readiness, loss of special combat 
capabilities, increased risks to health and safety, and a reduction in 
quality of life across the board.

                          Defense Commissaries

    Question. The fiscal year 1999 budget request ``divests'' the 
Commissary subsidy. The funding for the Commissary subsidy which was 
found in Title V, ``Revolving and Management Funds'', and which was 
provided to the Defense Commissary Agency (DeCA) will now be 
appropriated directly to the military Services. In addition, a 
Commissary oversight board, similar in nature to the Army/Air Force 
Exchange System (AAFES) board, will be created to review and oversee 
implementation of recommended operational changes to the Commissaries.
    Gentlemen, the Committee has heard numerous witnesses testify that 
the Commissary benefit is one of the preeminent quality of life factors 
for military personnel. Please explain to the Committee how the revised 
management and funding of commissary operations preserves, or improves 
this benefit?
    Army Answer. On October 1, 1998, commissary store-related 
appropriated fund resources will be transferred from the Defense 
Commissary Agency to the services to align resource responsibility with 
the organizations that control demands on the commissary system. These 
actions will maintain the commissary benefit by providing a financial 
and management structure better able to support resource tradeoffs, 
capital development decisions, and long range planning responsive to 
military personnel and their families. This will be accomplished 
through a strong operating board and with service representation and 
authority to issue directives. This should enhance individual service 
involvement with commissary operations. I remain anxious and will watch 
closely to ensure that this does continue to ensure the soldiers and 
their families the benefit they deserve. This does have some impact on 
soldiers' decisions as they view these types of initiatives against the 
already perceived erosion of benefits.
    Navy Answer. I do not expect that these changes will significantly 
change the delivery of the commissary benefit. The revised management 
and funding of the Commissary should be transparent to the commissary's 
customers. However, preservation of the benefit depends upon the 
Services' commitment to fully fund the Commissary in future years.
    Marine Corps Answer. These management actions will preserve the 
commissary benefit by providing a financial and management structure 
better able to support resource trade-offs, capital development 
decisions, and long range planning that is most responsive to military 
personnel and their families. Devolving day-to-day supervision of 
commissaries to the Secretaries of the Military Departments under the 
leadership of an effective Board of Directors with membership from all 
services will, in the long run, provide better and more responsive 
service for service members and their families.
    Air Force Answer. Under the proposal advanced by the Services, 
commissary operations would be governed by a directive Board composed 
of military service representative. The Services have been the most 
vocal defenders of the commissary benefit in recent years, and have 
repeatedly intervened at high levels to prevent degradation of the 
benefit, reduced levels of service, and increased costs for commissary 
patrons. Providing operational control, along with the budget, will 
place the commissary in a closer and more responsive position to the 
military services and may protect the commissary budget from being such 
an attractive target.
    Question. How do you anticipate that the management of the 
Commissaries will change under the new structure?
    Army Answer. Under the new management structure, the services agree 
that the day-to-day operation of the commissaries will be administered 
under the direction of the Commissary Board of Directors (CBOD). The 
Board will exercise full authority over commissary operations, be 
accountable to the service Secretaries and Chiefs, and be supported by 
committees for technical expertise in such areas as customer service 
standards, finance, and audit. Also, the Commissary Director will 
report to the Chairman of the Board of Directors and, through the 
Board, will be accountable to the service Secretaries and the Chiefs.
    Navy Answer. Within DeCA, particularly at the store level, I don't 
believe we will see any significant changes in management. However, 
outside of DeCA, the new operating board will give the Services greater 
involvement in decisions that impact management of commissary 
operations.
    Marine Corps Answer. The underlying principle of the Defense Reform 
Initiative is to refocus the Office of the Secretary of Defense (OSD) 
on corporate-level tasks and the oversight (as opposed to day-to-day 
management) of its operating components. The Defense Reform Initiative 
Report noted that operating the commissaries does not require close 
day-to-day supervision from an OSD staff official. Therefore, the day-
to-day supervision of the Defense Commissary Agency (DeCA) will be 
devolved to the Secretaries of the Military Departments, who will 
exercise oversight as a corporate body. The Under Secretary of Defense 
for Personnel and Readiness (USD (P&R)) will continue to provide broad 
policy oversight. However, the day-to-day operation of the commissaries 
will be administered under the direction of the Commissary Board of 
Directors (CBOD). The Board will exercise full authority over 
commissary operations, be accountable to the Secretaries and Service 
Chiefs, and be supported by committees for technical expertise in such 
areas as customer service standards, finance, and audit. The Commissary 
Board will oversee the DeCA Director.
    Air Force Answer. One of the basic principles behind the Defense 
Reform Initiative was that OSD should get out of the business of 
managing things, and instead concentrate on broad policy. Consistent 
with the principle, the proposal advanced by the Services would leave 
broad policy oversight at OSD, but would transfer operational control 
and supervision of day-to-day operations to the Services. This would 
give the Services a far greater role in management and oversight than 
they enjoy today.
    Question. What will be the role of the Defense Commissary Agency 
(DeCA) under the new Commissary management system?
    Army Answer. DeCA will carry out the day-to-day operations of 
commissaries. DeCA will also develop annual financial plans and goals 
for the Commissary Agency, commissary system, and all related funds and 
investments, and will forward them to the Commissary Board of Directors 
for approval. Finally, DeCA will ensure that standard commissary 
operational procedures and consistent delivery of the commissary 
benefit across the Services is maintained.
    Navy Answer. DeCA will still be responsible for running the 
Commissary system and will continue to perform all of the business 
disciplines necessary for day-to-day delivery of the Commissary 
benefit.
    Marine Corps Answer. DeCA will continue to manage the Commissaries 
as they do today. The two major changes relate to whom the Director 
reports to and how funding is provided. As stated above, the DeCA 
Director will report to the Chairman of the Board of Directors vice USD 
(P&R) and, through the Board, will be accountable to the Secretaries of 
the Military Departments and the Service Chiefs for the running of the 
Commissaries. Funding for DeCA will now come from the services, vice 
being provided directly to DeCA by OSD as it has been in the past.
    Air Force Answer. Under the proposal advanced by the Services, the 
Defense Commissary Agency (DeCA) would continue to operate the 
commissary stores. The difference is that DeCA would function under the 
operational control of a directive board composed of military Service 
representatives, rather than the OSD staff. The Board would set and 
enforce standards for customer service and operational performance. In 
the past, the Services have functioned merely in an advisory capacity.

                         Privatization Program

    Question. The Department of Defense (DoD) has an aggressive 
privatization program designed to contract out numerous base support 
and administrative functions. DoD claims that a significant portion of 
the end strength reductions specified in the Defense Reform Initiative 
will be achieved through privatization of functions currently performed 
in-house by DoD. DoD also claims that outsourcing will result in cost 
reductions of about 20 percent.
    How important is the accelerated privatization initiative to your 
efforts to improve the ratio of DoD ``tooth to tail?''
    Army Answer. The primary objective of Army's Competitive Sourcing 
Program--which consists mainly of cost competition studies conducted in 
accordance with Office of Management and Budget Circular A-76, 
Performance of Commercial Activities--is to achieve efficiency in the 
performance of the Army's commercial activities. We achieve these 
efficiencies whether the cost competition determines that it is more 
economical to convert the activity to performance by contract or by the 
streamlined in-house Most Efficient Organization. While the primary use 
of the savings that result from these efficiencies will be to fund 
critical Army modernization requirements, the improvement of the Army's 
``tooth to tail'' ratio will be another benefit.
    Navy Answer. Maintaining our momentum in the competition program is 
essential to our efforts to improve the ratio of DoD ``tooth to tail''. 
The Navy's Future Years Defense Program reflects net savings through 
competition of approximating $2.7 billion through fiscal year 2003, 
with annual savings in fiscal year 2003 approximating $1.2 billion, 
that have been reapplied within our budget request toward 
recapitalization and modernization of our force structure.
    Marine Corps Answer. The Marine Corps has assumed savings of $110 
million per year by fiscal year 2004, gained through the competitive 
sourcing program. These savings have already been reprogrammed for 
procurement modernization part of the ``tooth''.
    Air Force Answer. The Air Force is not using outsourcing or 
privatization as a means to improve our ``tooth to tail'' ratio. 
However, since all of the positions being considered for outsourcing or 
privatization are ``tail,'' the Air Force will realize a slight 
increase in our ``tooth to tail'' ratio.
    Question. Can increased privatization of support functions meet DoD 
goals for reducing the cost of infrastructure? Can the savings from 
privatization obviate the need for additional rounds of base closings?
    Army Answer. The Army Competitive Sourcing Program alone cannot 
meet DoD goals for reducing the cost of infrastructure. In particular, 
the savings needed from additional rounds of base closing are crucial 
to meeting those goals. In some cases, we are already on the edge. We 
have made substantial savings through efficiencies, and must find more. 
We must be very vigilant to ensure that we are not forced to cut 
soldier and family support activities.
    Navy Answer. This program is relatively new, and in the absence of 
hard data it is not possible to state categorically that our goals for 
reducing the cost of infrastructure will be met. The Navy's emphasis, 
however, is on competition, not on outsourcing and privatization per 
se, and we expect real savings regardless of the outcome of the 
competitions--either a new more cost effective in-house organization or 
a contract. Recent studies have identified nearly $4 billion annually 
that might be performed more economically but the private sector or 
more efficiently in-house after they have been competed. The savings 
from competition will be applied toward recapitalization and 
modernization of our force structure, but will not solve the problem of 
excess capacity and will not obviate the need for additional rounds of 
base closings.
    Marine Corps Answer. Base closings are related to changing mission 
requirements. For whatever infrastructure is required to support 
readiness, we will use privatization as one technique for achieving the 
most cost effective base support functions. I do not believe it will 
obviate the need for an additional BRAC.
    Air Force Answer. Privatization does not answer the basic issue of 
reducing excess bases for our given force structure. This can only be 
addressed through the BRAC process. Privatization only provides a 
mechanism to recapitalize our existing aging infrastructure. The Air 
Force has not programmed any dollar savings for privatization because 
the focus of our current privatization efforts (housing and utilities) 
is cost avoidance rather than savings.
    Question. What are the limits of privatization? Are your efforts 
limited by the need to maintain a rotation base? Does the need to 
maintain certain skills among military or civilian personnel limit your 
ability to privatize functions?
    Army Answer. There are legal prohibitions on outsourcing such 
functions as firefighters and security guards. Other than that, there 
are very few limits on Army commercial activities that can be competed. 
Rotation base limits on competition are minimal because the Army has so 
few overseas military positions for which rotation base positions have 
to be preserved. Similarly, there are very few limits on competition 
based on maintaining skills.
    Navy Answer. Privatization of manpower is limited both by 
legislation and by the application of Navy policy on sea-shore rotation 
and homebasing goals/minimums. Our policy provides a structured check 
and balance system between military manpower requirements and proposed 
shore infrastructure reductions for regionalization, outsourcing or 
privatization initiatives to ensure that our military readiness is not 
adversely affected. The need to maintain a sea-to-shore rotational 
base, along with the need to maintain certain critical skills, has 
indeed limited our ability to compete certain military-intensive 
functions. For this reason, the Navy's plan to achieve the savings 
reflected in this budget focuses on competing civilian-intensive 
functions.
    Marine Corps Answer. Privatization is limited by the willingness of 
a commercial vendor to provide a bid. Rotation is not a compelling 
limitation faced by the Marine Corps. The need to maintain certain 
skills among military or civilian personnel may limit the ability of 
the Marine Corps to completely privatize functions.
    Air Force Answer. Our privatization efforts are limited by public 
law and DoD workforce policies concerning functions that are considered 
military essential or inherently governmental. The need to maintain a 
rotation base was a requirement when considering positions for 
outsourcing. It limited our ability to outsource some functions. The 
requirement to maintain certain skills among military or civilian 
personnel also limited our ability to outsource some functions.
    Question. Please comment on the perceptions of the troops about 
privatization and outsourcing. Do the soldiers, sailors, marines and 
airmen perceive this initiative as a threat to establishing a career in 
the military? Is this initiative negatively impacting retention?
    Army Answer. Because fewer than 600 of the approximately 15,000 
positions that the Army is currently competing are military positions, 
very few soldiers are currently affected by competitive sourcing. 
Soldiers that are affected will be reassigned to other positions. 
Moreover, because only about 8,000 of the 56,000 positions that the 
Army plans to compete by fiscal year 2003 are military positions, a 
very small percentage of soldiers will be affected. Consequently, the 
prospect that soldiers perceive the Army Competitive Sourcing 
initiative as a threat to establishing a career in the military or that 
this initiative will have a negative impact on retention is very 
unlikely. They do not see this as a threat to their stability, benefits 
package, or quality of life.
    Navy Answer. We have not formally gathered any information about 
the perception of the troops about privatization and outsourcing or 
impacts on retention. Despite ensuring that sea/shore rotation, 
homebasing and career progression are all safeguarded in the 
competition process, the perceptions concerning privatization and 
outsourcing are not positive. The general perception is that the 
concern of civilian contractors for the well-being of Sailors will not 
be as great as those in the Navy and that the Navy loses flexibility 
when contracts are let.
    Marine Corps Answer. The Marine Corps competitive sourcing and 
privatization programs are found in base commercial activities. While 
some Marines who work in base commercial activities may be affected, 
the majority will not. This is particularly true of those associated 
with operating forces.
    Air Force Answer. There is a certain amount of apprehension about 
the outsourcing and privatization (O&P) process, particularly with the 
associated personnel reductions. We are continuing our efforts to 
determine the effect of several factors influencing retention, 
including O&P, private sector economy, and high tempo.
    We have worked hard to educate our airmen and officers about 
outsourcing and privatization, and will continue to do so. The Air 
Force Chief to Staff, General Ryan, has recently published a 
Commander's NOTAM (Notice to Airmen, an internal Air Force information 
publication available to all Air Force members) on this issue. He 
explains why O&P is necessary, how it will contribute to greater 
efficiency and ultimately to increased combat capability for the Air 
Force and what it could mean to specific career fields. General Ryan 
says that we will make every effort to keep those members who want to 
stay in the Air Force even if some may have to change career fields or 
location. This information helps to educate Air Force people, and 
reduce the confusion and uncertainty they feel as O&P approaches.

                              Medical Care

    Question. The Military Health Services System (MHSS) is changing 
from a fee-for-service health care program (CHAMPUS) to a managed care 
system called TRICARE. TRICARE is now being provided in most of the 
regions of the country. This transaction has caused some anxiety and 
confusion among beneficiaries.
    How satisfied are you with the medical care of the services? Do the 
troops like TRICARE?
    Army Answer. I worry about TRICARE. I am heartened in that now the 
medical community has acknowledged that there are problems associated 
with TRICARE. I believe that when we are up front about it, problems 
get fixed. However, we are not there yet. Several initiatives are 
working: TRICARE remote for the thousands of soldiers and 
noncommissioned officers who are not stationed on a military 
installation; bundling of co-payments so that every referral does not 
lead to another co-pay; reimbursements of claims in a timely manner; 
and adherence to access standards to name a few. We haven't fixed these 
and our soldiers deserve a medical care plan that cares for them and 
their families and follows them for the rest of their life. I am 
satisfied that these issues will be fixed. Soldiers just ask me why 
they were not already fixed. Soldiers do have concerns and want to 
ensure health care does not erode.
    Other comments I receive is that the program is difficult to 
understand. Troops need and want a very simple, step-by-step 
introduction to TRICARE as a part of their in-processing brief. Some 
facilities have taken the lead in this regard. Their marketing is 
simple and has taken the form of a TRICARE card that has all the steps 
for them to take in the event of accident or injury to them or their 
family members with relevant phone numbers for the various steps in the 
process.
    Navy Answer. I'm extremely pleased with the innovative methods the 
men and women of Navy Medicine are developing to keep our Sailors and 
Marines healthy fit and on the job. ``Taking Healthcare to the 
Deckplates;'' and, ``Moving Information, Not People;'' are two of the 
Navy Surgeon General's four goals which have greatly improved customer 
service to our people throughout the world. Taking healthcare to the 
deckplates means taking care of Sailors and Marines as close to their 
units as possible so they can stay on the job. It means providing care 
in mobile vans at pierside, in aviation squadrons, at base gyms, in 
barracks and in the operational environment. Navy Medicine is also 
using technology to move information, not people. Instead of moving 
Sailors and Marines closer to specialized care, our medical people are 
using pre-existing technology to bring health care closer to them. 
Today, telemedicine has become an alternative to MEDEVAC flights, not 
only saving time and money, but providing advance and specialized 
healthcare to our people serving on ships and in remote locations.
    TRICARE is a drastic change in the way health care services have 
traditionally been provided to our people and, as with any change, can 
be unsettling. Implementation of TRICARE has been fully completed, 
however the medical personnel of all three services are working 
together to address the concerns of our customers. Despite the expected 
difficulties in seeing through such a major undertaking, the initial 
statistics are promising. Enrollment in TRICARE has been greater than 
original estimates and the disenrollment rate is less than one percent.
    Marine Corps Answer. TRICARE is a profound and fundamental change 
in the way we provide health care services and as with any change it is 
unsettling for some of our troops. The Under Secretary of the Navy has 
appointed a task force to develop strategies for simplifying TRICARE 
and improving understanding. The Bureau of Medicine is committed to 
working to resolve problems. A TRICARE customer advocacy program 
demonstration was implemented in mid-1997. As service members become 
more familiar with TRICARE and some of its complexities are addressed, 
we believe TRICARE will be well-received.
    Air Force Answer. I am confident that the quality of Air Force 
medical care is second to none. Unfortunately, the transition to 
TRICARE is causing concern and confusion among active duty members. Air 
Force Quality of Life survey results attest to this showing only 44 
percent of the enlisted and 53 percent of the officers expressed 
satisfaction with medical care for both themselves and their families. 
However, these numbers differ significantly from DoD Health Care 
Satisfaction Surveys, which show significantly higher satisfaction 
rates among active duty members who have actually used the TRICARE 
system (74 percent of enlisted and 89 percent of officers). The Quality 
of Life survey went to active duty personnel around the globe, even 
though TRICARE has not yet been implemented worldwide. More meaningful 
results will be generated once TRICARE has been in place worldwide for 
one to two years.
    Question. Do you get many complaints from the troops about medical 
care?
    Army Answer. Yes sir, for all the reasons listed previously. In 
addition to comments about difficulty some soldiers have in 
understanding the complexities of the TRICARE Program, one of the most 
frequent problems I hear involves payment of Active duty health care 
claims for soldiers who live away from Military Medical Treatment 
Facilities. These soldiers and their families are required to obtain 
the majority of their health care from civilian sources and there have 
been problems in the timely processing of the Active duty claims. 
However, recent changes to Active duty claims processing procedures 
should improve the timeliness of claims processing. Beginning this 
spring through late summer all Active duty health care claims will be 
processed by the TRICARE Managed Care Support Contractors. The 
contractor's goal will be to process and pay 95 percent of all Active 
duty claims within 21 days. This initiative will positively impact 
quality of life for our remotely stationed soldiers and will improve 
relations with providers and health care provider network stability.
    The Department of Defense is also planning to proliferate the 
TRICARE Prime Remote program throughout the Continental United States 
in the near future. This program is designed to provide the same 
TRICARE Prime benefit that military treatment facilities (MTF) Prime 
enrolled soldiers enjoy. The only difference is that soldiers enrolled 
in the TRICARE Prime Remote program will obtain their primary, and most 
of their specialty care, from civilian network providers. Soldiers 
enrolled in the TRICARE Prime Remote program remain eligible for MTF 
care.
    With regard to medical care itself, one common avenue for 
complaints is through the Inspector General. In fiscal year 1996, there 
were approximately 33,000 issues handled by the Department of the Army 
Inspector General (this includes issues generated by all sources, not 
only Active duty troops). Out of those, only five percent were related 
to medical care.
    Finally, in my travels and discussions with the troops I find that 
the lack of customer service is an issue for some of the troops. I 
believe the introduction of TRICARE will lead to improvements in this 
area since it is instilling a degree of competition into our military 
medical system. As military medicine competes with civilian contractors 
to keep its customers, I believe a more customer-oriented attitude will 
emerge, and, in fact, is already emerging.
    Navy Answer. I have received complaints associated with the TRICARE 
program. However, we must keep in mind that TRICARE is not fully 
implemented and, like any new program, has experienced some start up 
problems. The Assistant Secretary of Defense (Health Affairs) and the 
three Surgeons General are working aggressively to address and solve 
the key concerns of our troops: portability; improving access to care 
for geographically separated units; solving billing concerns; and, 
claims processing in order to make the system more customer-focused and 
user-friendly.
    Marine Corps Answer. It is true that the transition from CHAMPUS to 
TRICARE has resulted in some confusion and anxiety which have been 
manifested in the form of complaints. The majority of the complaints 
have targeted the system and not the medical care received. The 
Secretary of Defense/Health Affairs Office has initiated action to 
ensure issues such as access for those in remote locations, enrollment, 
billing, and services are promptly addressed.
    Air Force Answer. No. Air Force personnel as a whole are very 
satisfied with the care they are receiving through the Department of 
Defense (DoD). In fact, 80 percent of respondents in a recent DoD 
TRICARE survey rated their level of satisfaction as good to excellent; 
of particular note, the highest satisfaction (on the survey) of 86 
percent was with the quality of medical care received.
    To the contrary, I have received many concerns from retirees--in 
particular, retirees age 65 and older, who are increasingly 
dissatisfied with the military health care system as space-available 
care continues to diminish. The Air Force supports the DoD's efforts to 
continue pursuing legislation for full Medicare Subvention, which would 
allow older retirees to participate in TRICARE. Additionally, we 
support DoD in studying alternatives for these Medicare-eligible 
beneficiaries.
    Question. What is your impression of the medical care programs for 
dependents?
    Army Answer. In general, once this person is in the system, the 
care appears to be good. Again, the problem is the complexity of 
TRICARE and some of the issues it raises. The TRICARE Division, co-
located at the Office of the Surgeon General and at U.S. Army Medical 
Command, receives the bulk of the Army specific questions about medical 
programs and TRICARE. The most frequently voiced questions about 
TRICARE as it relates to family members are: (1) the portability of 
benefits from one TRICARE region to another; (2) the lack of an 
adequate provider network in geographically remote areas; (3) the 
problem of multiple copayments in cases where beneficiaries are sent to 
multiple sites for diagnostic testing pursuant to a visit; and (4) the 
issue of balance billing for authorized care from nonparticipating 
providers, which makes a beneficiary vulnerable to unanticipated costs. 
It is my understanding that all of these issues have been addressed and 
resolution is forthcoming in the interest of the beneficiary.
    As I stated earlier, the TRICARE Prime Remote program will 
proliferate in the near future and is designed to provide the same 
TRICARE Prime benefit that military treatment facility (MTF) to which 
Prime enrolled soldiers and families are entitled.
    Navy Answer. I believe we have a good medical program for our 
dependents where TRICARE is fully implemented and working. TRICARE 
Prime offers the least expensive option for our Active Duty Family 
Members (ADFMs). Prime enrollment data reveals robust enrollment among 
ADFMs. Retiree enrollment is also strong. Recent trends are encouraging 
with enrollment rising and patient satisfaction increasing. 
Additionally, the vast majority of Prime enrollees are re-enrolling. 
While encouraging, I believe we could make the system more ``user-
friendly'' by automatically enrolling ADFMs in TRICARE Prime at our 
MTFs and eliminating annual reenrollment. This would simplify the 
process and help our young Sailors and their families. However, seniors 
not eligible for TRICARE Prime feel disenfranchised from the system. 
Expanding the Mail Order Pharmacy Benefit for Medicare-eligibles is 
affordable and the right thing to do.
    Marine Corps Answer. Enrollment data reveals robust participation 
among active duty family members. Recent trends are encouraging with 
patient satisfaction increasing. We continue to work hard to overcome 
confusion and simplify TRICARE.
    Air Force Answer. We believe TRICARE provides a high quality, cost 
effective health plan for dependents. TRICARE offers three options for 
dependents, providing a greater choice than they had in the past. Each 
family must evaluate the options and choose which option best meets 
their healthcare needs.
    Question. What feedback are you getting from the troops regarding 
the new dental plan?
    Army Answer. TRICARE Select Reserve Dental Program was recently 
implemented, and there is very little information available at this 
time regarding this program. However, Humana Military Health Systems 
(HMHS) has reported that they have received 23,824 applications as of 
March 1998. HMHS is developing a promotional video and will have it 
completed for distribution in April.
    Regarding the Family Member Dental Program (FMDP), the February 
1997 General Accounting Office Report to Congress reported that 94 
percent of survey respondents indicated either excellent, very good, or 
good ability to get a regular dental appointment using the program; and 
92 percent of respondents indicated either excellent, very good, or 
good locations of dentists participating in the program. Per the FMDP 
monthly reports, the percentage of eligible soldiers who were enrolled 
in MDP remained at 77 percent for the period July-December 1997.
    The enrollment numbers for the TRICARE Retiree Dental Program 
continue to climb. As of March 5, 1998, enrollment of retirees and 
surviving spouses is 103,564. This count is based on the number of 
enrollment units (i.e., single, two people, family) and not the actual 
number of individuals covered. Again, little information is available 
regarding customer satisfaction or other measures due to the recent 
implementation of this program. Some of the troops I have talked to 
have indicated that this is one of the benefits that has definitely 
eroded. They are making decisions based on the amount of money they 
have, not on the care that their family needs.
    Navy Answer. Overall enrollment and satisfaction with the TRICARE 
Active Duty Family Member Dental Plan is good; attitude toward 
contractor, United Concordia Companies Incorporated by both civilian 
dentist and military family members has improved dramatically over the 
last 3 years. Navy and Marine Corps enrollment has remained constant 
over the last three years and is the highest of the military services. 
Contractor patient satisfaction survey indicates that 80% of enrolled 
beneficiaries rate the program Good or Excellent.
    The TRICARE Retiree Dental Program was implemented February 1998. 
Enrollment is strong; over 100,000 sponsors have enrolled during the 
first 6 weeks. Feedback is minimal as the program has been on line only 
6 weeks, but enrollment has been very brisk, exceeding both DoD and 
contractor expectations. The program appears to be very popular and 
much appreciated by the retired community.
    Our TRICARE Selected Reserve Dental Program was implemented in 
October 97. Subscription to this program by all the services has been 
disappointing, less than 20,000 total military enrollment, and less 
than 5000 Navy and Marine Corps enrollees. It may be too limited in 
scope of coverage to compete with dental insurance benefits offered by 
the employers of many reserve personnel.
    Marine Corps Answer. Overall, feedback indicates satisfaction with 
the new dental plan. The TRICARE Active Duty Family Member Dental Plan 
Beneficiary Survey revealed: (1) 59 percent of respondents reported 
satisfaction with the benefit and 79 percent stated they would 
recommend the plan to others, and (2) other positive responses 
included: the number of working dentists; ease of making an 
appointment; minimal travel distance to a provider's office; quality of 
care, claims processing, and complaint resolution.
    However, a few criticisms indicated a lack of sufficient 
orthodontic coverage, and that pediatric care is difficult to obtain.
    Air Force Answer. The Department of Defense and the Services have 
been tracking customer satisfaction with the TRICARE Active Duty Family 
Member Dental Plan since it changed contractors on February 1, 1996. 
Although the benefit package was unchanged, the transition was 
initially troubled by marketing, enrollment and provider network 
development problems. As those issues have been addressed by the Office 
of the Assistant Secretary of Defense (Health Affairs) (OASD(HA)) and 
the contractor, satisfaction with the program has improved.
    In an October 25, 1996 information memorandum titled ``In Progress 
Review of the TRICARE Active Duty Family Members Dental Plan (FMDP),'' 
OASD(HA) cited results of surveys conducted by the Services. Overall, 
beneficiary satisfaction with the FMDP was high and the number of 
complaints had greatly decreased. Claims were processed quickly and 
beneficiaries were pleased with the quality of the dental care they 
received. The contractor was working to develop provider networks in 
three specific challenging locations.
    At the direction of OASD(HA), an additional customer survey was 
completed in June 1997. The telephone survey of 2000 beneficiaries in 
12 TRICARE Regions showed that over 80 percent of respondents were 
satisfied with the FMDP. The TRICARE Service Office in Denver, 
Colorado, continues to assess and improve the performance of the 
current FMDP contractor, United Concordia Companies, Inc.
                              Drug Testing
    Question. The Committee understands that the random urinalysis 
testing program, is a key element contributing to readiness. However, 
each service and each Reserve component tests its service members at 
different rates. The rates range from testing only 20 percent of Naval 
Reserve forces each year to testing Army active duty service members 
twice a year. For service and the Reserve component of each service 
please provide the rate of drug testing per service member per year.
    Army Answer. Active duty Army soldiers are tested approximately 
twice per year; about 25 percent of Army Reserve soldiers are tested 
each year, and approximately 43 percent of Army National Guardsman are 
tested each year.
    Navy Answer.
    Active duty:

Fiscal year:
    1993..........................................................  2.09
    1994..........................................................  2.00
    1995..........................................................  2.12
    1996..........................................................  2.16
    1997..........................................................  2.05

    Reserve: The Naval Reserve actually tests at a much higher rate 
than 20% each year. In fact, we conduct testing on 10 to 20% of the 
entire Naval Reserve on a monthly basis, which equals a minimum of one 
testing per Reservist each year.

Fiscal year:
    1993..........................................................  1.50
    1994..........................................................  1.50
    1995..........................................................  1.40
    1996..........................................................  1.40
    1997..........................................................  1.31

    Marine Corps Answer. The active duty rate of drug testing is three 
tests per service member per year. Marine Forces Reserve requires once 
a year for reservists.
    Air Force Answer. Currently the Air Force is testing at a rate of 
.75 per service member per year.
    Question. Please provide the number of service members tested in 
each of the last five years.
    Army Answer. The number of service members tested for fiscal years 
1993 through 1997 are as follows:

----------------------------------------------------------------------------------------------------------------
                                                                    Active Duty
                           Fiscal Year                                 Army           Reserve     National Guard
----------------------------------------------------------------------------------------------------------------
1997............................................................       1,024,585          53,829         155,881
1996............................................................         964,280          47,495         141,393
1995............................................................         927,150          46,178         114,032
1994............................................................         998,591          41,977          79,449
1993............................................................         989,224          31,540          69,530
----------------------------------------------------------------------------------------------------------------

    Navy Answer. The number of service members tested are as follows:
    Active Duty Only:

Fiscal year:
    1993...................................................... 1,172,540
    1994...................................................... 1,050,245
    1995...................................................... 1,024,863
    1996......................................................   964,767
    1997......................................................   883,378

    Reserve \1\:
---------------------------------------------------------------------------
    \1\ Reserve numbers are calculated from percentages of Naval 
reservists tested within each respective fiscal year. Exact numbers of 
Naval Reserve service members tested were not maintained in the past, 
but future testing results will reflect exact numbers of reservists 
tested.

Fiscal year:
    1993......................................................   140,000
    1994......................................................   140,000
    1995......................................................   130,000
    1996......................................................   125,000
    1997......................................................   125,000

    Marine Corps Answer. Total samples submitted are as follows:

----------------------------------------------------------------------------------------------------------------
                                                                              By fiscal years
                                                          ------------------------------------------------------
                                                              1993       1994       1995       1996       1997
----------------------------------------------------------------------------------------------------------------
Active...................................................    444,125    490,512    498,463    509,863    529,864
Reserve..................................................     22,085     21,306     19,140     22,238      (\1\)
----------------------------------------------------------------------------------------------------------------
\1\ Not yet available.

    Air Force Answer. The number of service members tested in each of 
the last five years follows:

Calendar year:
                                                           Number tested
    1993......................................................   168,761
    1994......................................................   187,942
    1995......................................................   184,554
    1996......................................................   207,247
    1997......................................................   286,539

    Question. Provide the drug positive testing rate for each of the 
last five years.
    Army Answer. The drug positive testing rate for fiscal year 1993 
through 1997 are as follows:

                                                  [In percent]
----------------------------------------------------------------------------------------------------------------
                                                                    Active Duty
                           Fiscal year                                 Army           Reserve     National Guard
----------------------------------------------------------------------------------------------------------------
1997............................................................            0.77            2.59            3.04
1996............................................................            0.61            2.52            2.93
1995............................................................            0.62            2.96            3.04
1994............................................................            0.05            3.20            3.00
1993............................................................            1.01            2.97            3.10
----------------------------------------------------------------------------------------------------------------

    Navy Answer. The Navy's drug positive rate for each of the last 5 
five years follows:
    Active:

                              [In percent]

Fiscal year:
    1993..........................................................  0.71
    1994..........................................................  0.77
    1995..........................................................  0.75
    1996..........................................................  0.67
    1997..........................................................  0.87

    Reserve:

                              [In percent]

Fiscal year:
    1993..........................................................  0.03
    1994..........................................................  0.03
    1995.......................................................... 0.025
    1996.......................................................... 0.025
    1997.......................................................... 0.023

    Marine Corps Answer. The percentage of Marines that have tested 
positive in each of the last five years is as follows:

----------------------------------------------------------------------------------------------------------------
                                                                              By fiscal year--
                                                          ------------------------------------------------------
                                                              1993       1994       1995       1996       1997
----------------------------------------------------------------------------------------------------------------
Active Duty..............................................        .74        .75        .69        .72        .88
Reserve..................................................        (1)        .37        .39        .54        (1)
----------------------------------------------------------------------------------------------------------------
\1\ Data not available.
 
Note.--The above figures all represent less than 1% positive tests.

    Air Force Answer. The drug positive testing rate for each of the 
last five years follows:

Calendar year:
                                                           Positive rate
    1993......................................................      0.25
    1994......................................................      0.25
    1995......................................................      0.20
    1996......................................................      0.18
    1997......................................................      0.18

    Rates are determined with opiates, barbituates, amphetamines and 
AFIP (Armed Forces Institute of Pathology) blind specimens removed. 
Methamphetamines are included.
    Question. Provide the rationale for the rate of testing used by 
your service/component.
    Army Answer. Active Duty: Testing rates have been driven by the 
commanders in the field. The drug testing labs and the Army budget has 
been able to fully support the requests for testing by the Army 
commanders who make their quota requests for a specified amount of drug 
testing prior to each fiscal year. The current rate of testing 
approximates to two tests per soldier per year, but there is no set 
maximum rate that is provided to the field to limit testing; the 
regulatory minimum is one test on average per soldier per year. 
Reserve: The testing rate is driven by the commanders' field 
requirements, operational tempo, and resources. National Guard: The 
testing rate is driven by the availability of resources.
    Navy Answer. The Navy's ``zero tolerance'' drug abuse policy has 
been in effect since 1981. Since then the Navy has pursued an 
aggressive urinalysis testing program. The objectives of Navy's drug 
testing program has been to deter and detect drug abuse as well as 
provide data on the prevalence of drug abuse. All uniformed personnel 
are subject to random and other forms of urinalysis on a continuing 
basis. Current Navy policy requires that each command test between 10 
and 30 percent of assigned personnel every month. This and 30 percent 
of assigned personnel every month. This rate is determined to provide 
an appropriate deterrent effect for illicit drug use.
    Marine Corps Answer. The Marine Corps conducts urinalyses on all 
Marines, regardless of grade or position, on a routine basis, (minimum 
rate is once a year for both active and reserve components, as per DoD 
Directive 1010.1, ``Military Personnel Drug Testing Program'' para D-2) 
and/or as frequently as testing facilities and organizational missions 
permit. The Marine Corps' primary rationale is that testing should be 
done often enough to act as a deterrent, but not so frequently that it 
adversely affects morale or creates an administrative burden. MCO 
P5300.12A provides commanders additional flexibility and guidance to 
conduct routine urinalyses on a ``for cause'' basis, when a Marine 
joins a command, or as part of a formal inspection.
    Air Force Answer. The primary purpose of the Air Force drug testing 
program is to deter service members from using illegal or illicit 
drugs. For this objective to be met, the Air Force has adopted a strong 
drug testing program which is highly visible, unpredictable, random and 
carries harsh consequences for those identified for illegal and illicit 
drug use. Rationale for the current drug testing level is a result of a 
compromise between the Secretary of the Air Force and the Department of 
Defense (DoD). The DoD has established a minimum rate of testing of one 
random sample per active duty member each year. The Air Force has 
interpreted this to mean testing at 100 percent of is endstrength. 
Historically, the Air Force has had an illicit drug positive rate three 
to four times below those observed with the other services (Navy 0.8 
percent; Army 0.8 percent; Marine Corps 0.8 percent) and has argued in 
favor of a lower testing rate (the other services are testing at a rate 
of approximately 2.0). A compromise was reached and the Air Force was 
granted a waiver to test for a period of 12 months at a rate of 0.75. 
At the end of this 12 month period (CY 97) the data accumulated would 
be evaluated and the testing rate for the Air Force would then be 
reassessed. We have found that there has been no change in the illicit 
drug positive rate between the previous year (CY 96) while testing at a 
rate of 0.5 and the study year (CY 96). Drug positive rates have 
remained the same at 0.18. Our findings have been forwarded to the AF/
SG and AF/CV for review. Our testing rate remains at 0.75.
    Question. If the rate of testing were uniform throughout the 
services, what would the preferred rate be by your service/component?
    Army Answer. Active Duty: Two tests per soldier per year on 
average, as that is the rate that is being requested by the commanders 
in the field who are best able to assess their requirements for drug 
testing to enhance readiness. Reserve: The Army Reserve is striving to 
support the current Department of Defense requirements of one test per 
service member per year. Exceeding the current rate of testing would 
require additional fiscal and personnel resources. National Guard: The 
Army National Guard would prefer to support the current Department of 
Defense requirements of one test per service member per year.
    Navy Answer. The Navy would prefer a minimum testing rate equal to 
or greater than two tests per service member annually, as the Navy 
currently employs.
    Marine Corps Answer. Department of Defense Directive 1010.1, 
Military Personnel Drug Abuse Testing Program, paragraph D.2b requires, 
``The minimum rate of testing is one random sample per active duty 
member per year.'', as a responsibility of the Service Secretary's 
administration of the program. However, due to the increased use of 
illicit drugs in the civilian community as reflected in the positive 
rate of entrant testing, it is preferred that the random testing rate 
be sustained at a higher rate to effectively enforce the DOD directive 
1010.1, policy of paragraph C1b to, ``Use drug testing to permit 
commanders to detect drug abuse and assess security, military fitness, 
readiness, good order and discipline of their commands.''
    The current testing rate of the Marine Corps is proving the most 
effective toward detection and deterrence of drug abuse. The rate fully 
supports mission goals and is integrated into the operational readiness 
scenario.
    Air Force Answer. Standardization of drug testing rates among 
service lines is not in the best interest of the Department of Defense 
(DoD). We believe the DoD should establish suggested or recommended 
levels of testing, and allow the services flexibility to implement. 
Each branch of the service should be able to determine what level of 
testing is sufficient to meet its program goals and respond to their 
specific threats. The level of testing must be high enough to maintain 
visibility, but not high enough to negatively impact mission 
capabilities. Greater emphasis must be placed on eliminating drug 
abusers from entering the service, or identifying them as early in 
their careers as possible. We strongly support increased drug testing 
rates at the point of accession and during technical training since 
statistically the prevalence of drug use is higher among individuals in 
the 18-26 year age group.
    Question. If the rate of testing were uniform at one test per 
service member per year, what would be the impact on readiness for your 
service component?
    Army Answer. Active Duty: Readiness could be hampered, as 
commanders would be prevented from testing to their requirements to 
deter drug abuse in their units. Reserve: Readiness would be enhanced; 
however, increased testing could reduce the time available for training 
without additional resourcing. National Guard: The Army National Guard 
readiness would be enhanced by increasing identification of drug 
abusers, and increasing deterrence of drug abuse.
    Navy Answer. Because of the negative effects of drug abuse on 
readiness, health, and safety, it is important the Navy continue 
urinalysis in accordance with current Navy policy. There are profound 
tradeoffs between test rate and detection rate. The probability of 
detection of drug abusers would decrease if the test rate decreases. In 
addition, as the probability of detection increases the deterrence 
effect on potential drug abusers increases. Simply put, the higher the 
probability of detection, the greater the deterrence effect.
    Marine Corps Answer. Considering the accessibility of illicit drugs 
in the civilian community by our service members, one random test per 
year would not support the Marine Corps operational readiness goals for 
deterring drug abuse and assurance of a drug-free force for deployment.
    Air Force Answer. One hundred percent testing would potentially 
impair the Air Force's ability to meet its mission requirements at its 
current OPSTEMPO and PERSTEMPO. Virtually all resources needed to 
administer, collect, observe, process samples, and report results for 
the service's drug testing program are taken ``out-of-hide'' from 
operational and support units. The Air Force currently expends more 
than 300,000 manhours ($5,586,000) annually to support drug testing 
activities that are not identified or resourced to perform this 
function. Increased testing to 100 percent would require a 
significantly greater investment from operational commanders to support 
this program with little return. We suggest that if the DoD mandates an 
increase in our testing levels that resources (manpower and monies) be 
provided to support this requirement. Continuing to levy what is 
perceived as unreasonable requirements in light of increased OPSTEMPO 
and PERSTEMPO, and in a time when the AF has proven it has the lowest 
drug usage rate in the DoD, is less than acceptable.

    [Clerks' note: End of questions submitted by Mr. Young.]
                                       Thursday, February 12, 1998.

                            MEDICAL PROGRAMS

                               WITNESSES

DR. EDWARD D. MARTIN, ACTING ASSISTANT SECRETARY OF DEFENSE FOR HEALTH 
    AFFAIRS
LIEUTENANT GENERAL RONALD R. BLANCK, SURGEON GENERAL OF THE ARMY, U.S. 
    ARMY
VICE ADMIRAL HAROLD M. KOENIG, SURGEON GENERAL OF THE NAVY, U.S. NAVY
LIEUTENANT GENERAL CHARLES H. ROADMAN, SURGEON GENERAL OF THE AIR 
    FORCE, U.S. AIR FORCE

                              Introduction

    Mr. Young. The Committee will come to order. You notice we 
have larger facilities today, so we have room for our visitors. 
That is a vote, and I think rather than start, we probably 
should make our journey to the chamber, cast our vote, and we 
will come right back.
    All right, we will try this again. What I started to say 
was how nice it is to have this room, it is so convenient and 
allows all of our visitors to be here. The disadvantage is that 
it is very far from here to the chamber where we have to vote.
    We want to welcome all of you, Dr. Martin, General Blanck, 
General Roadman, and Admiral Koenig. We are happy to visit with 
you again. We had an excellent casual briefing with you just 
several months ago. We are happy to see the President's budget 
with a little more realistic number for military medicine, and 
we will talk about that today.
    We are vitally concerned about the health care for those 
serving in uniform as well as their families. We are also 
concerned about those who have retired and the issue of 
Medicare subvention, the issue of whether we allow them to get 
into the FEHBP, how we are going to solve that problem. So we 
are happy to have you here. We are going to put off any other 
remarks I have, I will submit for the record.
    Mr. Murtha?

                         Remarks of Mr. Murtha

    Mr. Murtha. Let me just say a couple of words. I knew these 
open hearings were not good so far away from the Capitol where 
we have to run back and forth to vote, but occasionally we have 
to have them. But I am delighted to see you folks here, and 
there is no subcommittee that has done more to work on medical 
problems than this subcommittee. Under Bill's leadership, and 
when we were in charge, we have done everything we could to 
take care of the quality of life.
    I am so proud to have just come back from Okinawa, where I 
saw a naval hospital, working with the Air Force, a real 
coordinated effort, and everybody said it was the best possible 
care you could get. Everybody was complementing everybody else 
with the care. It took me a half-hour to find any problems at 
all. So I am delighted to see so much progress being made.
    People do not hesitate to tell you when there are problems 
when you are out in the field. You guys sanitize everything. 
But they don't hesitate to tell you. So the results of your 
work are good.
    When Bill was out in the hospital, when the Chairman was in 
the hospital, that was the lousiest room I have ever seen out 
there at Bethesda. Just out there not long ago, that has been 
improved. So things are getting better. I am delighted to see 
that happen.
    Mr. Young. Well, Dr. Martin, we are happy to start off with 
your presentation, and we will go to the Surgeons General, and 
then we will have some questions for you.

                    Summary Statement of Dr. Martin

    Dr. Martin. Yes, sir. Mr. Chairman, distinguished Members, 
it is certainly my pleasure to be here today. I want to thank 
you for holding the hearing early to make sure that I had the 
opportunity to participate.
    I think, as both of you pointed out, the relationship that 
we in DOD or the military health system enjoy with this 
committee is unique, and it is largely a reflection, I believe, 
of the enormous interest and concern that each of you have in 
the health care and well-being of our Armed Forces, their 
families and our retirees. Your involvement in the changes in 
military medicine over the last 5 or 6 years and how we are 
better positioned to carry out our missions obviously has been 
a major part of the successful changes that have occurred.
    I have submitted my statement, if it is all right, Mr. 
Chairman, for the record, and would like to briefly summarize 
three of the basic points in the testimony.
    First, military medicine has achieved a new level of 
understanding and respect in the minds of our military line 
leaders, particularly the combatant commanders. Today's 
potential threats to their forces demand a strong, agile and 
technologically advanced military health system to provide 
force protection. It is protection that begins when individuals 
enter the service. It involves a continuous record of their 
health and fitness, as well as potential exposures to 
increasingly large numbers of hazardous materials and 
environments.
    Force health protection is with our service members while 
they are at home and while they are deployed. It is there to 
provide care shipboard or on the front lines, and it will take 
care of them while returning to a medical center able to offer 
specialized care, and it is hopefully there everywhere for 
their families, both around our facilities and not.
    Second, I believe that TRICARE is successful. In the span 
of less than a dozen years, we have undertaken a very diverse 
and independent operating system of health care, the Army, Navy 
and Air Force systems, along with CHAMPUS, and integrated them 
to build an organized military managed care system. Such a bold 
step has proven insightful, and, in fact, has resulted, I 
believe, in very substantial success in pulling together the 
three services to begin to solve the problems that we are 
definitely going to face as we move into the 21st century.
    That is not to say that we do not have problems, 
particularly with how we reimburse our providers, the process 
by which we provide timely information to many of those 
interested in our system, and, very importantly, the 
difficulties we continue to have in some places with access. 
Nonetheless, TRICARE has demonstrated that it is possible to 
continue to enhance quality, improve access, and do so at a 
significant decrease in cost to the taxpayer.
    Lastly, the possibilities for the future of military 
medicine, I believe, are very bright. In the past 5 or 6 years, 
the community of military medicine has become one of 
collaboration, where our focus is on improving the system and 
the delivery of health care, in collaboration, very 
importantly, with the joint staff and the line communities 
within the services.
    I think it has been very clear that we have set aside the 
interservice competition and disagreement which was rife and 
characterized the system in the early 1990s. I think we have 
demonstrated very clearly, and particularly the Surgeons, 
reflect the constructive application of our energies toward the 
improvements that are needed, not only in our system, but also 
with the Department of Veterans' Affairs and will we see great 
progress there.
    In closing, Mr. Chairman, let me say I am very proud of the 
very substantial accomplishments within the military health 
system, and certainly this committee has helped us to achieve 
them.
    In truth, however, it is the men and women of the military 
health system, military and civilian alike, officer, enlisted, 
active, Reserve, all across the world, who deserve the credit 
for the tremendous strides military medicine is making, and 
will, I believe, continue to make over the next 5 to 6 years.
    Thank you, Mr. Chairman.
    Mr. Young. Dr. Martin, thank you very much. We will come 
back to you with some questions.
    [The statement of Dr. Martin follows:]

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    Mr. Young. Let's go to General Blanck for his statement.

                  Summary Statement of General Blanck

    General Blanck. Thank you very much.
    Good morning, Mr. Chairman, Mr. Murtha, distinguished 
members of the Committee. It is my pleasure to be here and 
speak briefly about Army medicine.
    I will not repeat what is in the testimony. You can refer 
to that at any time, and we do want to have time for questions.
    I think it is important to note that although I will speak 
about Army medicine, most of what I say will be repeated or 
could be stated by the other Surgeons, because we work 
extremely collaboratively in ways that Dr. Martin articulated, 
getting at the issues of quality, the issues of readiness, and 
ultimately the issues of service.
    Now, we were privileged to have several conversations 
actually with many of the Members on some of the quality issues 
that have been raised, and I would like to report that we have 
all made extreme strides, great strides, in solving those 
problems and getting at those issues, in making our high-
quality system even better. That, of course, is what we are all 
committed to do.
    As far as the Army, we had a significant backlog of cases 
that needed review. I am pleased to reported to you that we 
have cleared up those backlog cases. We still, of course, have 
new ones that come in at a small rate per month that we are 
dealing with, and we are assisting the JAG, the Judge Advocate 
General, in the claims review that the legal folks do with 
contractors. So I think we have solved that and are doing the 
appropriate reviews and are reporting more individuals than 
ever before to the National Practitioner Data Bank.
    We have initiated, and this is for all the services, a 
report card. You have copies in front of you, and I have a 
blowup there on the easel. That happens to be of Tripler Army 
Medical Center, which, although an Army hospital, is quite 
triservice, because it takes care of an awful lot of Navy, Air 
Force and Marine personnel, and, in fact, the Deputy Commander 
is a Navy captain. So we really are working together, as Mr. 
Murtha spoke of as well.
    You will note on there, on the extreme right, a box that 
gets at measures of excellence. Joint commission, board 
certification, bachelor degrees for nurses, and satisfaction 
with access, with quality.
    On the far left you see the timeliness, with the standards 
of access that TRICARE has stated and where that hospital is in 
meeting those access standards.
    Commitment to wellness, just under that, where you get 
wellness information and how that fits in with all of the 
health care that we provide.
    Then finally, the numbers that one can call to get more 
information about TRICARE or to register a complaint or 
difficulty if for an individual patient that is not being met. 
This will be positioned in all of the lobbies of our hospitals 
and clinics in sizes such as that, and then folks will also 
have the handout copy you see in front of you, and I will pass 
out to some in the back, that they can refer to, post on their 
refrigerator, because this has useful information with good 
ways to get into the system. As we all know, that has certainly 
been a problem.
    I would just add that as far as readiness, clearly that is 
our reason for being. The health care we do today is partially 
readiness, but we are also emphasizing that aspect of readiness 
that has to do with deployment training, caring for folks 
during deployments, have taken very seriously the lessons from 
the Gulf War in doing environmental and disease surveillance, 
so that when the Army was getting ready to try to bridge that 
flooded river and go into Bosnia, preventive medicine, 
epidemiologic teams were already on site, and in a short time 
we did over 115,000 analyses of air, soil, and water, so that 
today I think I know more about Bosnia than I do about Fort 
Indiantown Gap or Admiral Koenig does about Quantico. We are 
really doing that and doing that very, very well.
    Finally, I would just mention the advances in the 
Informatics, because capturing the records in an automated 
format is clearly one of our biggest challenges. We are doing 
that with various systems now, and this summer we will begin 
the test of the high-capacity personal information carrier. I 
have shown many of you this, but I will hold it up again, 
because this is the medical record, the dog tag, that one hangs 
around a serviceman or woman's neck and that has all of the 
medical information and captures what exposures they may have 
had, any health events, immunizations and so forth, as we also 
store it centrally.
    That concludes my opening remarks. Thank you.
    Mr. Young. General, thank you very much.
    [The statement of General Blanck follows:]

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    Mr. Young. Admiral Koenig, we are glad to see you fit and 
healthy again. We hope you are fit and healthy. We also 
understand your schedule requires adjustment. We certainly 
understand and would be happy to hear from you at this time.

                  Summary Statement of Admiral Koenig

    Admiral Koenig. Thank you, Mr. Chairman, Mr. Murtha, 
members of the Committee. I, too, have submitted my testimony 
for the record. I just would like to make a few brief remarks 
here this morning.
    In August of 1997, some of our Navy doctors at the Navy 
Medical Research Institute announced a very significant 
breakthrough in organ transplantation, which we think is going 
to benefit all of mankind in the very near future. And on that 
very same day, in Guam, a Korean airliner crashed. You probably 
remember that incident where over 300 people were killed, and 
only 32 people survived the crash. Of the 32 people who 
survived, 19 of them were taken care of at our Naval hospital 
in Guam, which is only about 1 mile from the point of the 
crash.
    I think that single day emphasizes or exemplifies what Navy 
Medicine is about and how we reach around the world and do 
things.
    I identified four priorities for Navy Medicine during my 
tenure as Surgeon General. The first is taking health care to 
the deckplates. Simply put, this means we are trying to take 
care of Sailors and Marines as close to where they work as we 
possibly can. We take care of them in their barracks, in their 
gymnasiums, where they train, on the decks of ships, in sports 
medicine clinics, wherever we can get to them, and we think 
that has helped a great deal in improving the health of our 
people.
    The second major priority is to move information, not 
people; that is, to take advantage of technology, to bring 
health care to the people instead of making them come to us for 
healthcare.
    I would like to tell you just a little about what we 
achieved abroad the aircraft carrier George Washington. As you 
may know, the George Washington is now in the fourth month of 
her deployment in the Persian Gulf. During these 4 months the 
George Washington has had 46 consultations with our Navy 
Medical Centers in the States. Over 500 X-ray examinations that 
have been transmitted from the George Washington have been 
processed by Navy Medical Centers in the U.S., interpretations 
immediately sent back to the ship, and helped them make 
decisions concerning the patients' management on board the 
ship.
    We think we have prevented 13 medevac evacuations. Without 
the ability to consult with specialists thirteen sailors would 
have been taken off that ship. However, we were able to manage 
their care on the ship and get them back to work, instead of 
having to transport them off the ship and lose that sailor's 
productivity, placing an added burden on his or her shipmates.
    I'd like to share other initiatives in the technology world 
that I think demonstrate where we are heading. At two of our 
hospitals, personnel have already learned how to help their 
patients get prescription refills over the Internet. That is 
even easier for people who know how to use the Internet than it 
is to use the telephone to refill a prescription, and the 
patients really like that.
    I think the most exciting initiative and probably the 
simplest one. exploiting technology, is at our Naval hospital 
in Naples, Italy where they set up a program that every time a 
baby is born and the dad is at sea, they take a picture of the 
baby and send it to the ship as an enclosure to e-mail, and the 
dad gets to see a picture of Mom and the newborn baby within 
hours after the birth.
    My third major priority is making TRICARE work. We have all 
talked about TRICARE, so I don't need to talk much more about 
it, except let me say, I truly believe we need to make TRICARE 
more user-friendly and more understandable for our 
beneficiaries. The word I use is ``demystify''. TRICARE is too 
complex. We need to decrease the confusion for our beneficiary 
population.
    I think the most important thing we can do to accomplish 
that is to make enrollment in TRICARE Prime automatic for 
active-duty family members living within the catchment areas of 
our facilities, along with the option to decline being enrolled 
in TRICARE Prime, similar to servicemen's life insurance 
procedures, or the way we handle our survivor's benefit 
programs for retirement. Automatic enrollment with the option 
to decline would make things easier for people.
    I think we have one major problem with TRICARE, and it is 
one that I think you are all very much aware of, and agree we 
really need to address. TRICARE as it is set up today is 
gradually disenfranchising our older beneficiary population. 
When our people become Medicare-eligible, they are no longer 
eligible for TRICARE. We simply cannot tolerate that.
    These people are our most loyal, our oldest and most 
vulnerable patients, and we really need to take care of them. 
We cannot break our promise, we cannot on the day of their 65th 
birthday say, sorry, you cannot see the same provider that you 
have been seeing for the last 7, 8, 10, 15 years. You have to 
go find somebody else. That is basically where we are headed. 
We have to fix that problem. Medicare subvention is certainly 
an essential step in that direction, but is not the total 
answer, and we have to look for a more complete answer than 
Medicare subvention.
    Finally, the fourth point we are emphasizing is 
reengineering our business practices, focusing on quality 
health care. I will say that Dr. Martin's 13-point program for 
accessing quality improvement initiatives is one we have been 
following in Navy Medicine, as have the Army and Air Force. We 
really believe in every one of those points and are working 
hard to achieve them.
    Finally, I will be retiring on the 30th of June of this 
year, 40 years to the day from when I raised my hand as a 
midshipman at the Naval Academy. That is why I picked that day. 
I think 40 years is long enough. It has been a great trip, but 
I think my wife and I need to get on with some other things in 
our lives. I want to thank you and the entire Committee for the 
outstanding support that you have given to us in Navy Medicine 
and our sister Services. It has been an honor to serve with 
you.
    Thank you.
    Mr. Young. Admiral, thank you very much. We recognize what 
a sacrifice it is for you to be here today, and we appreciate 
the fact you were here.
    [The statement of Admiral Koenig follows:]

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    Mr. Young. General Roadman.

                  Summary Statement of General Roadman

    General Roadman. Mr. Chairman, Mr. Murtha, members of the 
Committee, my formal testimony is also submitted.
    I think that we couldn't have started any better than 
having Mr. Murtha point out where we believe we have made great 
progress in executing our strategic plans that all of us 
jointly have done.
    As you listen to all of us, I think you will hear so much 
overlap and so much convergence that you think we have the same 
writers, and really what it means is that we are holding hands 
together differently than we ever have before, and each of us 
catalogues what we are doing a little bit differently.
    The Air Force has a five-initiative strategy. First, and 
always first, is medical readiness. The second strategy is to 
deploy TRICARE and make that work. The third is to rightsize, 
to get the efficiencies in our system, so that we husband the 
Federal dollar and take care of our people correctly. The 
fourth is to build healthy communities, which is an emphasis on 
prevention, intervention so early that, in fact, we prevent 
disease rather than having to treat it in its later stages. And 
it is all capped by what Ron pointed out with the report card 
of which we have got to have customer satisfaction as we are 
going about doing the vital things of our mission.
    In readiness we have done several things. We have 
essentially managed two weapons systems for the Air Force and 
for the joint community, and that is air transportable 
hospitals and aeromedical evacuation. In both of those, what we 
are trying to do is to reengineer so we have a smaller 
footprint to put into the theater of combat to support combat 
arms and to provide increased quality of care, increased 
clinical capability. I think much of the reengineering is best 
exemplified by the initial IOT&E of our chemically hardened ATH 
as the threat in the world begins to change. We need to look at 
the kit that we bring to the fight, and we expect the first 
chemically hardened ATH to actually be operational at the 
latter part of this year.
    In addition, as the amount of medicine that goes into the 
theater of combat decreases, what we have got to do is be able 
to transport more critically injured patients. So we are 
reengineering air transport with the concept of care in the 
air.
    In addition, the Army for a long time has been absolutely 
on point where they said that the most important weapons system 
was the soldier, and I, quite frankly, in the early part of my 
career said, that about the F-15s and F-16s. Quite frankly, as 
we have come to look at readiness, it is clear you can have all 
of the technology in the world, but if the human weapons system 
is not capable of doing what it needs to do, then we are not 
ready to do our job. So we have taken on the concept of the fit 
fighting force as our prescription for readiness in physical 
fitness, mental fitness, as well as growing people to 
understand the environment in which they exist prior to going 
into the theater of combat.
    The second pillar is to deploy TRICARE. And I think it is 
critical for us to understand that as we are trying to do 
TRICARE, it looks like a peacetime health care initiative--but 
it is really the life support system for our readiness 
capability, TRICARE is also, as we have made a promise to our 
beneficiaries, TRICARE support contracts must be the safety net 
to take care of people, as BRAC closes bases, people we have 
disenfranchised. We have to be able to outsource and privatize 
much of that care, which is the way to look at TRICARE.
    TRICARE enrollment is growing faster than we had expected 
it to. Our greatest concern, and I agree with Harold, is that 
as I wake up early in the morning worrying about what it is we 
are not doing, I think of the promise that we made people to 
take care of them, to provide their health care for life. And 
we have recruiting posters as recently as 1991 that said, if 
you stay in the military for 20 years, we will provide for you 
health care for life. Quite frankly, we cannot walk away from 
that promise. So I agree that that is one of the steps that we 
have got to fix.
    Subvention is the first step. The concerns I have with that 
are the limitation of the numbers of people that can get in on 
that, and also the delay in implementation. We are working that 
very, very hard.
    The third pillar is rightsizing. We are executing that 
strategy. It will mean that there will be less medical centers, 
less hospitals, but more ambulatory care clinics, because the 
problem we are trying to fix desperately is access, that when 
people are sick, they can get in.
    The number of specialists to primary care is upside down 
for us. In other words, in the Air Force we have about 70 
percent specialists and 30 percent primary care or access 
folks. That means the pyramid is upside down. So we have got to 
force-sculpt and relook at how we deliver our care so we get 
that balance correct.
    In building healthy communities, we see that also as a 
readiness issue. We have done a number of things to transition 
us to that. We have begun measuring physical fitness by a 
technique called cycle ergometry, which is the same thing that 
is used in the Olympic training camps, where we measure the 
VO2 max of people in peacetime, so we know what 
their cardiovascular fitness is and their capability of 
functioning under stress. And we have put health and wellness 
centers at most of our bases. We have 53 bases out of 70 with 
those, where we have exercise physiologists that are helping 
people when they are exercising, not requiring them to be 
patients, but actually outreach in the gymnasium, so they are 
dealing with being in control of their own health care.
    All of the programs I have discussed this morning are 
listed in my testimony, but it is all capped by customer 
satisfaction. I think the quality of care today is better than 
it has ever been, and it has always been good. We know from our 
surveys that our customers are more satisfied with access 
quality than they have ever been in the past. Our Board 
certification rate is higher than it has ever been in the past. 
So I think we are making great progress.
    In addition to the external surveys, we find our surveys 
from the JCAHO, show that we are on the average 5 percent 
higher than our civilian counterparts. So we know that there 
are horror stories, but what we see systemically is that the 
system is getting fixed.
    In conclusion, I will tell you we have a very strong 
customer-based strategy for readiness; for comprehensive 
quality health care through TRICARE; rightsizing our 
facilities; for prevention--keeping people well; and for 
looking at customers, focusing on customer satisfaction as a 
key performance factor.
    None of this would be possible, Mr. Chairman, without what 
has already been alluded to, the wonderful support we have had 
from your Committee and the relationship that we have had over 
time to try to fix the problems together.
    Thank you very much.
    Mr. Young. General, thank you very much.
    [The statement of General Roadman follows:]

              [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]



                   DOD HEALTHCARE FUNDING SHORTFALLS

    Mr. Young. I thank all of you for an excellent 
presentation. As we have had an opportunity to meet personally 
just in the last couple of weeks, I appreciate very much the 
commitment that all of you obviously have to providing good 
medical care for members of the military and their families.
    We all would also admit there is a long way to go. We are 
not where we need to be yet, and I am not sure we will ever get 
there, but at least we are working on it one day at a time.
    So that brings me to my first question, and that is the 
President's budget. In recent years we have identified serious 
shortfalls in the President's budget for health care, and this 
Committee has taken the lead to correct those problems and add 
the additional funding. This year I would compliment the 
President's budget in that he has substantially increased his 
request. However, it is still some $300 million under what we 
appropriated for fiscal year 1998.
    My question has to be are we once again in a shortfall that 
we are going to have to address, or do you consider the 
President's budget adequate at the numbers stated?
    Dr. Martin. There are two answers to that, Mr. Chairman, 
yes and no. Let me just do the yes and then the no.
    In regards to the Department's commitment to fully fund the 
budget, Dr. Hamre and Mr. Lynn were actively engaged with the 
process. I believe, and I think all three Surgeons believe, 
that the core budget requirements that we were able to get into 
the budget were, in fact, those that we felt were the amounts 
required to carry out our programs. And that was important, 
because that constituted almost a $500 million increase in the 
POM.
    Now, having said that, it is important to point out that 
there was some give and take. Number one, there is no question 
that the services and the Department added a significant amount 
of money to the POM base, which, as you know, was very low, 
and, I think, unexecutable.
    At the same time, the three Surgeons first identified 
certain areas where we could take additional savings so we 
would not have a larger than necessary transfer of funds to the 
health program. For example, we cut real property maintenance. 
But the level to which we cut it to is consistent with 
continuing to maintain and improve our facilities, partly 
because of the investment we made over the last couple or 3 
years. We continue to incorporate significant savings 
associated with shifting from hospital care to ambulatory care.
    So part of the budget is a series of assumptions about a 
continuation of some fairly impressive gains we have been able 
to make, both ourselves and with our contractors. We feel at 
least the core budget was fully funded, and the Surgeons can 
certainly speak to their opinion on that.
    Where there continues to be difficulty, which is the no 
part of the answer, is, first the question of technology and 
intensity. In fact this committee asked the General Accounting 
Office to look at this issue. The General Accounting Office 
clearly articulated that if, in fact, you are going to maintain 
pace with inflation, you need to incorporate that factor in 
your budget. Not unreasonably, the Office of Management and 
Budget does not allow that to be included in any discretionary 
programs. So that means by definition our budget is short that 
amount. Very frankly, I believe DOD would have incorporated it, 
but it is a budget policy issue. And it is very clear to me 
that if you do not cover technology and inflation requirements, 
then you either have to decrease other kinds of services, or 
you cannot provide the modern medical technology and advances 
that are required to keep pace with medicine today.
    The area which we are working on and the Secretary 
mentioned is technology. It is an issue the Department is 
concerned about, and it is an issue that still has to be looked 
at.
    The second component of our current budget difficulty has 
to do with timing in regards to the inflation decreases. 
Essentially what happened is that late in the budget cycle 
there were a series of inflation adjustments to the overall 
budget. Some of those adjustments were completely appropriate. 
There are two that were problematic. Number one, we do not 
believe that there is going to be an inflation reduction is 
possible on pharmacy, and we know there cannot be one taken on 
our managed care support contracts.
    Mr. Lynn has indicated that he is very interested in 
working with the committee, partly because of the timing of 
these reductions, to make sure that both the committee and the 
Department are comfortable that we are not going to have to 
reduce services.
    In regards to the reduction last year versus this year, 
part of it is due to the one-time ``buying out'' of our managed 
care support contracts. We also are taking care of less people. 
So the reduction from fiscal year 1998 to fiscal year 1999 is 
in part understandable, based on the decreased requirement. As 
DOD works with the committee to resolve the issues of 
technology, intensity and inflation application, there is every 
reason to believe that we will have a fully funded budget for 
fiscal year 1999.

                LIFETIME HEALTHCARE FOR MILITARY MEMBERS

    Mr. Young. The other Members have specific questions on 
some of these issues, and we will get to that. I am going to 
ask one more question before I yield to the other Members. That 
has to do with after retirement.
    I know there has been a lot of conversation about we didn't 
promise people who enlisted in the military or became officers 
in the military lifetime care. In meetings last week with 
several of you at the table, we talked about that, and, in 
fact, we did in a way promise. And I asked General Blanck if he 
would bring one of those with us, and as you see the poster 
there, an Army recruitment brochure, the part highlighted in 
yellow says, ``Superb health care. Health care is provided to 
you and your family members while you are in the Army and the 
rest of your life if you serve a minimum of 20 years of active 
Federal service to early retirement.'' It doesn't say anything 
about cutting it off at age 65 or anything like that.
    Now we are dealing with Medicare subvention, we are dealing 
with the USTFs. This Committee asked you last year in our bill 
to give us a plan on using the Federal Employees Health Benefit 
Plan, and we are anxious to see that.
    Where do these all fit? To me this is a commitment. I do 
not care how the lawyers might look at it; to me, this is a 
commitment. How are we going to keep this? Medicare subvention 
is not getting the job done, is not going to get the job done 
in the minds of a lot of people. FEHBP might or might not. We 
need to find out if it will. USTFs are something that I think 
appear only in about 10 regions of the country, but they could 
be a player.
    So say something about this issue, and then we will get on 
to some of the specifics of the medical budget.
    Dr. Martin. Yes, sir. It is in the QDR, and, very frankly, 
is one of the top priorities of Secretary deLeon, how we as a 
Department with the Congress can solve this particular problem. 
It is ranked very high in everybody's mind. The service chiefs 
have made it clear that this is also a retention and a 
credibility issue.
    I think it is fair to say most of the leadership of the 
Department does not take the position that these promises were 
not made. In fact, in almost all of the discussions I have been 
in, particularly with people in the services, they know 
perfectly well that the promises were made. It has been an 
important recruitment incentive for mid-career people, 
particularly mid-career enlisted, especially those with large 
families.
    There is simply no question that recruiters and those 
individuals who sought to get military personnel to extend and 
re-up, used the health care promise consistently over the 
years.
    Setting the legal issue aside, what Secretary Cohen has 
indicated that he expects to be done over the next couple 
months--and Secretary deLeon is looking at it now--is exactly 
in response to the question that you have raised. In other 
words, how many people are we talking about with which kinds of 
coverage? The fact is, there are a couple hundred thousand, 
probably 300,000 getting care from the direct care system. 
Admiral Koenig mentioned one thing that happens because of the 
current law. They move from being enrolled in our system with 
their own primary care doctor to all of a sudden, since they 
are no longer CHAMPUS-eligible, they now have to move to space 
available.
    One thing being looked at as a part of Medicare subvention, 
is for at least those individuals reliant upon our direct care 
system--and 300,000 people is a lot of people--and they want 
care from us, we find some way to allow them to enroll and take 
advantage of primary care managers.
    That is one component of a strategy. Medicare subvention 
actually has two parts; number one, TRICARE enrollment for 
those 300,000 people who use our system predominantly, and 
number two the new Medicare choice program. The Medicare choice 
program now provides more options for people in the private 
sector and, like our TRICARE contractors, is fairly widely 
spread across the country, in a lot of different communities.
    So a second thing that Secretary deLeon, the leadership of 
the Department, are looking at is how we can develop a 
``partners'' program with Medicare. We could work with Medicare 
to take advantage of those Medical Choice programs which, do 
not have the deductibles, have low out-of-pocket costs, good 
catastrophic coverage, and almost all include pharmacy, a major 
deficit of standard Medicare.
    Some number of people, of course, have their own coverage; 
and some people, there end up not being able to take advantage 
of those alternatives.
    By the way, USTFs, currently are a part of our overall 
strategy along with the direct care system and the contractor 
system.
    So I think the answer to your question is, number one, it 
is a problem, and you have heard from members of this panel. If 
you ask the chiefs, you would hear the same thing. If you ask 
Secretary deLeon, you would hear the same thing. We need to 
begin to find solutions. Secretary deLeon feels very strongly, 
since this is a benefit issue, not a medical issue--this is 
really a pay and compensation issue--that it is very, very 
important that we much more aggressively push ahead on our 
Medicare subvention demo, on the clarification of current 
benefit capabilities, and look at what those other alternatives 
are. This is a problem that is not going to go away.
    On the other hand, we have to be cautious about creating a 
new benefit because if a new benefit cost $1.5 to $2.5 billion 
and was not the most effective or efficient benefit, it would 
be a mistake that would be difficult to pull back from. There 
needs to be thoughtfulness about what the alternatives are, but 
there can be no question about the need to join the issue and 
begin to solve it. Although I think probably we are going to 
solve it in pieces. There are different groups of people with 
different needs that we have to be able to respond to.
    Mr. Young. I agree we have to be careful that what we do is 
right, because we are going to have to live with it for a long 
time. So we do have to be cautious. But we do need to expedite 
reaching this decision and getting something done.
    Dr. Martin. Yes, sir.
    Mr. Young. We will come back to these issues again. I want 
to yield to Mr. Murtha at this point.
    Mr. Murtha. I just have a couple comments. It may be, as 
you work your way through subvention, that you could work in 
this problem to see during the demonstration would this be part 
of it; for instance, that they could stay in TRICARE, and you 
could pay this as part of this demonstration project, and then 
we could move from there, because it is a fairly good-sized pot 
of money, although obviously it doesn't cover it all.

                    SUPPORT STAFF FOR DOD HEALTHCARE

    A couple of things that worry me. The Chairman sent a 
letter to you folks about the people that support the doctors. 
Every place I go, no matter how good the health care is, I 
always get complaints about the supporting personnel, and out 
at Bethesda, or in Okinawa, one or the other, I got a complaint 
that a doctor had to clean his own office. If you could be any 
less efficient than that, I don't know.
    This letter doesn't comply with the general provision that 
we put in the law. We said, don't cut the support people. We 
gave you an out. What do you do? You just ignore it. You find a 
legal way of ignoring keeping support people working.
    That is unacceptable. It is signed by General Roadman, and 
I am sure he did not mean to mislead the Committee, but we 
believe you need support people in order to make the doctors 
more efficient. That is all there is to it. It is that simple. 
When you find a way around, it just is not acceptable. We would 
hope that you would find a way not to use end strength, not to 
use contracting out, not to use excuses about you would have 
the support people. I don't care where you go, you will have 
every outfit, every hospital tell you you need more support 
people, and that is just common sense, because it is more 
efficient.

                          TRICARE COMPETITION

    The other one comment I wanted to make was this TRICARE 
contract that was just overturned, it seems to me with the 
experience that we have had, and we have to be more careful in 
the competition that we don't get overturned. This is very 
disruptive when these things are let out and then overturned. 
So few contracts are overturned, and it just worries me that we 
have not learned by this time that these contracts, the way to 
compete them, was causing a problem. So I would hope that you 
would work on better competition so we don't have the 
overturning.
    You remember the problem we had in California. It was just 
a complete disaster. It took months before it was overturned. 
They hired people, then they had to go back. I don't know how 
many contracts you put out. I know they are big contracts. They 
are legally complicated. But I hope you would concentrate on 
that.
    Dr. Martin. Mr. Murtha, I would like to make a comment for 
the Committee I think is very important. First, the current GAO 
recommendation is not to terminate the contract. What they said 
is that the process used was not the best process, and that 
they recommend that we actually, like we did in California, 
look at it.
    It is important to point out that in the same decision, one 
of the problems is that we did what the GAO had told us to do 
in the last three protests--which we won. Since GAO said if we 
do it this way, it is the proper way, and that would be the 
smart thing to do. Doing it that way we sustained the protests. 
Unfortunately we have a new hearing officer and a new attorney 
who said, oops, you shouldn't have done it the way we told you. 
Even though we supported you then you should have done it 
differently.
    I think, very frankly, that the judgment our people made 
about following the proven formula was not a bad decision. But 
we are absolutely as concerned as you are about the impact of 
this. The process of how we are going to deal with this protest 
decision by GAO is not over yet. There are options we are 
looking at.
    Mr. Murtha. Thank you, Mr. Chairman.
    Mr. Young. Near the close of the last session, we had a 
good meeting with all of you on the issue of quality of care in 
the military facilities. Mr. Hobson, a distinguished member of 
this Committee, initiated that meeting and brought together 
some important questions which you responded to very well, but 
you told us you would have more answers for us as we have this 
hearing. I would like to yield now to Mr. Hobson to continue on 
that issue.

                     QUALITY OF MILITARY HEALTHCARE

    Mr. Hobson. Thank you, Mr. Chairman.
    As you stated, last fall a series of newspaper articles ran 
in the Cox newspapers around the country concerning aspects of 
our military health care system for active duty personnel and 
their families, some of which were in my district. There were a 
number of things identified in these articles. I want to thank 
the chairman and the Ranking Member for their support in this, 
because the series basically said the military health system is 
a magnet for bad doctors, the military does not warn service 
members and their families of unqualified and incompetent 
doctors, and does not report them. The services do a poor job 
in monitoring and verifying doctors' credentials and 
performance records. Military hospitals and clinics rely 
heavily on poorly trained or unqualified providers, and even 
exemplary doctors can have bad outcomes because of inadequate 
support, incomplete records, outdated equipment and a lack of 
continuity of care.
    Subsequent to that in November, we received what I think we 
would all agree was not the appropriate answer, but I must say 
that Dr. Martin was a refreshing face in this area. He came 
forth. Instead of stonewalling it, he came in and we had a 
meeting, and we discussed a lot of these problems. I appreciate 
the meetings we had later on these issues, but I haven't heard 
a lot of resolution of them today.
    I have a series of questions which may have to go a couple 
of rounds, because I have some questions concerning individuals 
and where they may be in the military today and how the 
treatment has happened. I have some questions on a blood bank. 
I have questions on TRICARE and some awards of some contracts, 
and I have some other general questions about the operations.
    Pertaining to medical records, I particularly like the 
moveup we have had in that. I think that was a direct result of 
the chairman and the Ranking Member allowing us to have the 
meeting we had. Although it was ongoing, I think it got a 
boost.
    Generally speaking, I would like to thank Dr. Martin, even 
though he is a short-timer, and he knows my rule on that, that 
is an inside joke, for his willingness to spearhead this in an 
atmosphere of people trying to work together to get the best 
health care we can for the people in the military and their 
dependents. But I do have to say, we have had some problems, 
and I think we need to talk about this.
    I also would like to thank Tina Jonas, our staff person who 
has been very helpful to all of us in bringing focus on this.
    Let me talk about some of the things that were in some of 
those articles since you all haven't brought them up. I think 
we have got to get them out here and find out what has 
happened. I think that has been the attitude you people have 
had before, and I want to continue that.
    In the Dayton articles, for Air Force providers, Dr. 
Roadman, there was a doctor named Andrew Curtis Faire, this is 
from the articles, was involved in the death of four patients 
at an Army hospital in Texas. Number one, is he still 
practicing; has he been disciplined; have his clinical 
privileges been limited, suspended or revoked? What were the 
problems associated with these deaths, and has there been an 
external review group in these cases? He is actually an Army 
doctor, I guess.
    General Blanck. The name again, sir?
    Mr. Hobson. Andrew Curtis Faire.
    General Blanck. Beaumont. Not in the Army. Related to the 
National Practitioner Data Bank. I can get you more 
information. But all of the steps that were to have been taken 
have been.
    Mr. Dicks. Did you say he is out of the Army?
    General Blanck. Yes, sir.
    Mr. Dicks. Is he still practicing medicine?
    General Blanck. I don't know.
    Dr. Martin. My understanding is that he is, with a fully 
unrestricted license. In fact, we went back to check and many 
of the physicians that we discharged including for cause and 
reported to the National Practitioner Data Bank currently are 
practicing medicine. Most, I understand, unrestricted licenses 
with no limitation on privilege. This has to do with the 
character of a bigger problem.
    Simply because we take action doesn't necessarily mean that 
there is always going to be a subsequent action by States. We 
actually have gone through and I think we have provided to Ms. 
Jonas--for all those individuals by name that we know, and 
provided a status of where each one of those individuals is and 
our current knowledge about what they are doing.
    Mr. Hobson. But there are some internal structure problems.
    Let me get to the Air Force. I misstated. The first one was 
Army. There is a Dr. Thomas Conage, these are out of the 
article, an Air Force colonel. It is alleged that he used 
somebody else's license and continued as chief flight surgeon 
at Tinker Air Force base in Oklahoma for 6 months. Apparently 
he was reprimanded but continued to practice medicine for a 
year after that. I think we need to know the explanation of the 
reprimand and why he was then allowed to retire. Does this send 
the right message to others who might be attempting to forge 
credentials?
    General Roadman. Absolutely it does not send the right 
message. The date on that, I believe, is in the late 1980s on 
that particular case.
    Mr. Hobson. I don't know the date.
    General Roadman. I am just telling you in the time phasing 
of that. It does not send the right message. The answer was 
that I believe the right things were done on that particular 
case. He is not in the service currently. I will have to get 
you the details on the follow-up.
    [The information follows:]

    This timeline of events was reconstructed as accurately as possible 
from incomplete records:
    Colonel (Dr.) Thomas J. Conage's first assignment as a physician 
was September 1976 at Altus AFB, Oklahoma. It is unclear what his Air 
Force duties were prior to this time.
    In 1988, Colonel Conage was the Chief of Aerospace Medicine at 
Tinker AFB, Oklahoma. In April 1988, during licensure verification, we 
learned that the Illinois medical board was unable to read his license 
number, which ultimatey led us to discover that Colonel Gonage 
fraudulently altered an Illinois medical license and claimed it was his 
own. Upon discovery of this fraudulent activity, we removed him from 
his supervisory and leadership position.
    Colonel Leo Cousineau, Colonel Conage's hospital commander at the 
time, recalls immediate suspension of privileges and complete removal 
from patient care pending legal outcome of his case. ------. During the 
discovery process, the case moved to another base since Colonel Conage 
claimed bias on the part of the leadership at Tinker AFB.
    According to the database at Tinker AFB's Legal Office, Colonel 
Conage received an Article 15, non-judicial punishment, on September 
29, 1988. ------. Colonel Conage was also reported to the Federation of 
State Medical Boards (FSMB) for unprofessional conduct.
    On October 14, 1988, Colonel Conage passed the FLEX exam (the 
appropriate medical licensing exam at the time), and in November 1988, 
he received a full, valid and unrestricted Virginia medical license. In 
a December 1, 1988 letter. ------. The committee did not have any 
concerns with the clinical performance they observed. On December 5, 
1988, Colonel Conage was subsequently assigned to the Family Practice 
Clinic, and performed non-flying physical examinations and treated 
adult acute care patients. ------. Having accumulated 20 years of 
service by this time. Colonel Conage retired in October 1989.

    Dr. Martin. But, Mr. Hobson, as you well appreciate, and we 
have talked about a couple of these cases, I think it is 
important for the Committee to be aware that a number of these 
cases not only happened in the late 1980s, and early 1990s, but 
the process of jurisprudence when we looked at them didn't make 
us very happy. There were actually more egregious cases where, 
the desire to report somebody to the National Practitioner Data 
Bank, which was completely supported by all of their peers. But 
their commanders' decisions were reversed at higher levels, and 
other things like that.
    I would have to say for the bulk of those cases, the three 
Surgeon Generals and I were very unhappy reviewing the 
processes that, were used to deal with them some number of 
years ago. Part of what this committee expected of us was to 
make sure that the rules were so clear and so explicit that 
those kinds of occurrences could not happen again in the 
future. There is no doubt in my mind, that it is inexcusable 
that those kinds of situations should have resulted in 
different kinds of action with more visibility.
    Importantly and one of the consequences of the Dayton 
articles that very positive is that it crystalized for medical 
providers in our whole system these set of issues. Predictably 
there were two reactions. The first reaction by a lot of 
people's part was, ``Well, gee whiz, we are good doctors. Most 
of the doctors we work with are pretty good. This is unfair.'' 
But what happened over that 2- or 3-month period of time, and 
you can see this in letters that are being now written to U.S. 
Medicine or Federal Practitioner, is that our practitioners 
realize that physicians, or nurses or other people who are not 
following the rules, who have done things that are 
inappropriate, reflect badly on them. This has been a real 
tough problem with the medical profession. How do you 
discipline your own members?
    Mr. Visclosky. Will the gentleman yield for a second, 
please? I do think dates are important. If I could just follow 
up on the gentleman's question, you had mentioned that Dr. 
Faire is not with the Army anymore. When did he leave the Army?
    General Blanck. I don't know. I would have to give you that 
information.
    [Clerk's note.--The information was not provided for the 
record.]
    Dr. Martin. Before General Blanck was Surgeon General, so 
it had to be at least over 2 years ago.
    Mr. Hobson. Let me ask you about one then. Is Dr. Gary 
Davis currently an Army doctor?
    General Blanck. Yes.
    Mr. Hobson. Do you want to explain; do you want me to run 
through that one, or do you want to explain it?
    General Blanck. No, I really do, because I think that is an 
important one. It gets at some of the issues. In fact, what I 
am going to talk about has been reported not only in these 
articles, but in some other articles. And so there are some 
legal issues. However, privacy does not apply as it would for 
some kinds of cases. So I will speak as openly as I possibly 
can.
    Dr. Davis is currently on active duty in the United States 
Army, practicing at Madigan Army Medical Center. He entered the 
Army as a fully licensed, unrestricted licensed, board 
certified, University of Arkansas graduate in the specialty of 
obstetrics and gynecology. At that time a background check did 
not reveal any issues.
    After he was on active duty, we learned that a process had 
culminated in the State of Idaho leading to the revocation of 
his license. We stopped his practice immediately, in 1989 or 
1990, and reviewed all of the cases, all of the care that he 
provided while on active duty, both review within the hospital, 
but then with outside consultants actually on the basis--
although he still had an unrestricted license in, at that time, 
two or three States. Georgia is the one that he uses today.
    Because of that revocation of the license, even though we 
found no fault with his care while on active duty, we referred 
him to something that all the services have called a show cause 
board. This is a very formal process in which the service 
member shows cause as to why they should or should not be 
separated from the service. They have rights in that. They can 
provide information. It is a very formal process. The Army--not 
the medical department, not health affairs--the Army decided 
that he could stay on active duty, and has subsequently been on 
active duty and doing a job within the scope of his practice. 
He has been at several places, currently at Madigan. In fact, 
when the article came out, I asked that the care that he 
provided at Madigan be reviewed. It was, and found to meet the 
standards.
    Mr. Hobson. Is he still training? Does he train students?
    General Blanck. He is part of obstetrics and gynecology, 
and I don't believe they have a residency in it there, but 
would probably be involved in it.
    Mr. Hobson. There are a whole series of these. If you look 
at, there is another, Dr. Monsanto at Kings Bay, a Navy guy.
    Mr. Dicks. If the gentleman will yield, what bothers me 
about Dr. Davis, besides the fact that he had problems in 
Idaho, I don't even think these articles clearly delineate what 
those problems were, and had a number of problems where there 
were malpractice suits brought against him, I think five, is 
that he went out and advocated for this Dr. Lim. And Dr. Lim is 
the one that wound up doing a surgical procedure that severed 
the blood supply of this young lady's leg, wound up costing us 
what, how many million, $4.2 million.
    Mr. Young. $5 million.
    Mr. Dicks. This guy had all kinds of problems. Nobody says, 
what about his judgment? Why would we then promote him and put 
him into a position of authority when he was the guy who 
advocated for a doctor who was clearly incompetent? How can you 
justify that?
    And then the rest of the story gets worse. It says right 
here that the Army took the father, Clark's father, retired 
master sergeant, a retired guy, Randall Clark, after he filed 
the lawsuit, the Army relieved him of his duties as a nurse at 
Fitzsimmons and transferred him to Korea. Asked about the 
transfer, Dr. Blanck said, ``That's dumb, insensitive, and it 
is not what we're about.'' Well, it sure as hell is. Somebody 
in the Army was about it. Maybe you weren't, General, and I 
certainly appreciate the way you reacted to this, but this guy 
Clark who had served in Vietnam said he was also ordered to 
return his daughter's medical records, which were being used by 
the attorney to prepare for litigation. ``Once a person files a 
military malpractice claim against the military, the military 
does everything it can do to make the person's life 
miserable,'' said Clark, who returned with his family to 
Westerville. The Army paid the Clarks $987,786 immediately and 
$5 million over Clark's lifetime.
    What I can't understand, with all the problems we have, how 
does this guy get promoted and sent to Madigan? That doesn't 
make any sense. He is the guy who went out and advocated for 
Lim. First of all, I would think that a mistake of that 
magnitude would make it impossible for an individual to be put 
in a leadership position.
    Dr. Martin. First let's be very clear that the 
circumstances surrounding Dr. Lim are unequivocal. Part of the 
reason that there was such a large settlement is that it was 
totally unacceptable medical care, and that is why we lost a 
huge malpractice case. As you know, Dr. Lim left the military 
soon thereafter. I just might add parenthetically he is in an 
unrestricted practice in the State of New York now. And we 
reported him.
    But I think part of the difficulty--and I will be very 
candid with the committee because we have been wrestling with 
this. It isn't just a question of the Surgeon General of the 
United States Army, Air Force or Navy today saying, ``okay, 
this occurred in 1992, and in retrospect he shouldn't have been 
promoted or sent to wherever.'' What is difficult is to look at 
the circumstance, particularly those years ago, in regards to 
how promotion boards operated, who then was making the 
decisions about transferring these people, and how were these 
decisions made? You have to remember that the same person who 
made that decision or people who made that decision--also made 
the decision not to report certain people to the National 
Practitioner Data Bank. Subsequent to that they made the 
decision to report nobody in the Army to the National 
Practitioner Data Bank, which was pointed out by this 
committee.

             TREATMENT OF DOD MEDICAL MALPRACTICE LITIGANTS

    Mr. Dicks. Dr. Martin, can you tell us--I know you have got 
your 13-point plan. We are going to get into that later here 
because I am told by the staff that a lot of it has not yet 
been implemented and should be. But can you give us assurance 
that we are not treating people like this, moving them to Korea 
because their daughter was treated badly at a military 
hospital?
    Dr. Martin. I can give you assurance that I find that 
particular event abhorrent. I am absolutely confident that the 
three Surgeon Generals feel the same way. This becomes very 
important. One of the important things that we discussed with 
the Committee was to change the ability of people to bring 
rapidly these complaints to public attention. In fact, one of 
the things that Dr. Blanck talked about is that every single 
one of our beneficiaries ought to know what is expected of us, 
and what number to call if it is wrong. They need to be able to 
seek legal recourse.
    Both you and I know that it is very possible 5 years, 10 
years, 15 years ago to find circumstances--I could even think 
of cases that occurred in the last week or two--where 
individuals with specific authorities and responsibilities 
didn't carry out their duty properly, or were in positions of 
command and made decisions that, in retrospect, were 
inexcusable. That is different than the question you really 
drove at me. How can we assure you that we are going to change 
it?
    I think the assurance we have to give you is that we are 
opening up the system. There is going to be a lot of sunlight 
shining in it. A lot of the kinds of things that used to be 
kept secret are no longer going to be kept secret. We are 
looking at every single case that comes up now. If, for 
example, one of the Surgeon General's staff says this is okay, 
or they attempt to push it under the rug, it goes to an 
independent civilian group.
    The other thing that is very important is that the 
expectations of our patients and beneficiaries are getting to 
the point where if that occurred today, I don't think that he 
simply would go off to Korea. He has read the papers, and 
immediately somebody would begin to bring that forward. I am 
confident to say that the current ASDHA (HA), any of the three 
Surgeon Generals or Secretary DeLeon, who find that abhorrent, 
we would immediately go to that service and say, this is not 
going to happen this way.
    Mr. Young. Let me have Mr. Hobson complete his questions. 
Then we will come back in order for you to finish.
    Mr. Hobson. I want to shed the sunlight on another one 
because I think it is relatively current, and I think the 
person may still be in the service. That is what I want to find 
out. There is a Dr. Jerry Mothershead, a physician at the 
Portsmouth Naval Hospital. He was allowed to work in the 
emergency room while he was intoxicated. Subsequent 
documentation revealed that he was an alcoholic, having at 
least a dozen episodes of drinking that lasted 3 to 4 days each 
between 1991 and 1995. Nevertheless Commander of the Navy 
Medical Corps, Dr. McDonald, wrote to the Virginia Medical 
Board saying that, I have seen no evidence that Dr. 
Mothershead's alcoholism has any current impact on his ability 
to practice medicine. The articles say that Dr. Mothershead is 
still at Portsmouth Naval Hospital.
    Number one, is that true? Second, do we still have an 
alcoholic taking care of emergency room patients? Was Dr. 
McDonald reprimanded for his irresponsible letter on behalf of 
Dr. Mothershead? And what are you doing to get out the message 
to hospital commanders that this sort of coverup is not going 
to be tolerated? How do you intend to enforce this policy?
    Dr. Martin. Actually I happen to know that case. Dr. 
McDonald was the Director of the Board of Medical Examiners in 
the State of Virginia. But to the point, the individual 
involved was referred for appropriate proceedings, which ended 
up with the individual undertaking treatment.
    First of all, he is an alcoholic. Yes, we have an alcoholic 
on active duty. In fact, we have some number on active duty. 
But there is a difference between an alcoholic who is 
continuing to drink and an alcoholic who has been able to bring 
the disease under control. This particular physician as of 2\1/
2\ months ago went through rehabilitative therapy, had been 
detoxed, and as of the October-November time frame was a 
recovering alcoholic, no longer drinking. When this individual 
in question was raised to me, I checked through BUMED and with 
the Navy.
    In regards to whether the letter should have been sent, I 
don't think that it would be sent today. We had another case 
that occurred last summer which was analogous to this one. The 
doctor was relieved of privileges immediately, and given the 
choice of either going through a complete rehabilitation 
program or leave the service.
    Part of the nonjudicial punishment process that we go 
through isn't medical. So if you have a situation where an 
individual has problems that are associated with behavior, the 
process of making a determination is often a nonmedical 
decision.
    In this particular case, I don't think the letter should 
have been written. Ian McDonald, whom I served with in the 
Public Health Service, brought it to my attention last summer. 
In fact, the real decision is, did we take the appropriate 
steps for this doctor, and if this behavior is repeated, would 
he face the appropriate military justice? Yes. Would we suspend 
his privileges? Yes, definitely. And that is really the key to 
the questions that are being asked about making sure this stuff 
can't happen again.
    Mr. Hobson. You have got another one here that I don't know 
the answer to. That is, this Commander Edner C. Monsanto, a 
pediatrician at Kings Bay. He has had two recent cases of 
malpractice, one involving the misdiagnosis of a 6-month-old 
who had bacterial meningitis. Failure to diagnose this properly 
resulted in permanent brain and nerve damage to the child. A 
judgment of $1.9 million was paid. Second misdiagnosis of a 2-
week-old girl resulted in permanent neurological damage. A 
judgment of $4.1 million was paid. To my understanding, he 
still practices at Kings Bay. I want to know what has been done 
to protect others. Is he being supervised, has he had limits 
put on his privileges, and what is happening?
    Admiral Koenig. When these cases came to light, we pulled 
all of them, and reviewed them, I found Commander Monsanto was 
reported to in the National Practitioner Data Bank for one 
case, but not the other. The unreported case was reviewed and 
put through a peer review group. We subsequently reported the 
Commander to the National Practitioner Data Bank for both 
cases. We also had his privileges put in abeyance, that is a 
fancy word we use for taking them away temporarily, and 
reviewed his present practice, had a group of physicians look 
at what he was doing, how he is practicing now. We had put him 
through some remedial training in the time subsequent to that. 
I believe the outcome of the peer review of his present 
practice was that he could go back and practice pediatrics in 
the ambulatory setting with some limitations on how much he 
could do.
    Mr. Hobson. With supervision?
    Admiral Koenig. Yes.
    So I think we have properly addressed the Dr. Monsanto 
case. I am a pediatrician, too, and so is Edward Martin. I will 
tell you, every one of us lives in fear every day when we are 
in the clinic that that could happen to us, because you can 
miss these things.
    Mr. Hobson. Absolutely. My concern is when they happen and 
when the things repeatedly happen, that you take the 
appropriate action. I don't think it should have to come out in 
newspaper articles as it did, and I think you gentlemen 
acknowledged the fact that there have been some mistakes in the 
system. What we are trying to do--and I don't think it should 
have had to come out, frankly, for this committee for that.
    I would like to talk about the 13 points, but I am going to 
come back to that in the end, I will wait for the next round, 
because I have got about 6 more questions.
    Mr. Young. Mr. Dicks.
    Mr. Dicks. To follow up on this, Dr. Martin, you have 
acknowledged the problems here. Your plan includes a three-
pronged approach to address the problem. Conduct an internal 
DOD Inspector General audit to determine the extent of the 
problem. Insist that the services retire their backlog of 
cases. Use an external civilian panel to determine whether or 
not malpractice has occurred.
    So far none of these goals, according to the staff, has 
been accomplished. Moreover, the services still have a large 
number of cases requiring review. The Army has a backlog of 131 
malpractice cases. Of these 131 cases, 90 are awaiting external 
peer review, and 40 are in final processing. The Navy has a 
backlog of 130 cases. And the Air Force has no backlog at this 
time.
    Maybe I could ask General Roadman to explain to us how you 
dealt with your backlog.
    General Roadman. Mr. Dicks, about 2 years ago we 
reengineered our process. Basically the peer review and the 
consultant program was too long. We went to a trained group of 
consultants that do the review, and this shortened the process 
by about a year.
    Mr. Dicks. And so you have no backlog at all?
    General Roadman. That is right. When you say backlog, we 
have got 37 that are being reviewed for final standard of care 
determinations. Those are in the process. In other words, they 
are not queued up and nothing being done on them. They are in 
the legal review. So they are on track.
    Dr. Martin. Mr. Dicks, could I correct the record on where 
we are? First of all, the Inspector General's investigation was 
requested, is completed and is on my desk. Second, we have let 
the contract for the civilian external review, to carry, get 
out; and, third, the Army has sent me a memo that guarantees 
the entire backlog will be completed by the end of this month.
    General Blanck. But, in fact, yes, you can use the term 
``backlog,'' they are undergoing review. They are not in a 
queue. They are in process of being reviewed at various stages 
in that. I am not sure we will ever have less than a certain 
number.
    Mr. Dicks. There are always a certain number of these 
pending?
    General Blanck. Right. We started out with a real backlog, 
over 800. We are now at--actually it is 123, numbers of cases 
that are in the process of being reviewed.
    Mr. Dicks. The Air Force said they just had 37 cases 
pending, too, so you still have some that are not resolved. You 
don't have every case resolved.
    General Roadman. What I want to give you is in the absolute 
number. In the queue and in the process we have got, we have 36 
claims that are currently being reviewed at regional medical 
center law consultants. That is the law. Then we have 37 that 
are being reviewed for final standard of care determination. So 
if you add those, we have got 73 that are in the queue.
    Mr. Dicks. That are going through the process?
    General Roadman. Absolutely. In other words, they are not 
lying fallow. They are going through the prescribed process. 
But the question that you ask is, how are we moving those? We 
relooked at our whole process about 2 years ago.
    Dr. Martin. This is very important--and part of our 
reengineering effort the individual who is accused of violating 
the standard of care appropriately has the right to defend him 
or herself. There is a judicial process that allows them to 
present evidence to say, now, wait a minute, this is or is not 
true. Concurrent with that, there is a very quick review to see 
whether there was a significant violation of the standard of 
care. If there was, the privileges are suspended right away. We 
don't wait for the whole process.
    Let me give you an example that occurred last summer. An OB 
was found to have potentially given us information that was 
incorrect on his license. They discovered it at 10 o'clock in 
the morning. By 2 o'clock that afternoon, he was not seeing 
patients. So if there is a danger to the patient, we hold their 
privileges in abeyance immediately. Then they have this chance 
to state their case. I bumped into a case, an Air Force case 
that has taken 2 years. The person has not been allowed to see 
patients, but has a very good attorney. So each step of this 
adjudication process involves the attorney.
    The crucial thing that you are touching on is whether we 
set up processes so we don't wait for the whole process to be 
finished before we make the standard of care decision to 
protect patients. The answer to that is we review those 
immediately.
    Mr. Dicks. And we are reporting people when appropriate to 
this national register?
    Dr. Martin. That's correct. We were not fully reporting 
before. One of the issues that was raised was that one service 
simply was not reporting it at all. The minute that was brought 
to our attention along with the Oklahoma license issue, the 
services took appropriate steps and began reporting. In that 
particular service's case, there was a very substantial backlog 
of over 800 cases that hadn't even been reviewed.
    Mr. Dicks. First of all, my impression is after our two 
meetings on this, you guys are trying to work on this. But it 
has got to be a very high priority to give confidence to the 
people who go to Madigan and go to all these various facilities 
around the country that they are going to get high quality care 
here and that they don't have to worry that they have got 
somebody there who is--to me it is the personnel practices 
here. We have got to be really careful about the people we 
allow to practice.
    Dr. Martin. Mr. Dicks, let me tell you in clear terms. This 
to me is up close and personal. I have an 8- and 9-year-old. I 
go to these facilities with the same expectation that you are 
articulating for all of our beneficiaries. I think it is 
absolutely essential that we do not allow, either through 
systemic flaws or other kinds of problems, situations to occur 
that might endanger our beneficiaries. I am very personally 
supportive of exactly the point you are making.
    Mr. Hobson. Will the gentleman yield?
    Mr. Dicks. Yes.
    Mr. Hobson. Since you brought it up and it is along your 
line, why don't you explain--I want to give you a chance to 
explain the Oklahoma licensing problem and how you acted in 
that. I think you did a very responsible thing. It goes along 
with what Mr. Dicks brought out.
    Dr. Martin. What appears to have happened in Oklahoma is a 
good-intentioned effort by the State of Oklahoma to provide an 
Oklahoma license for Indian Health Service employees plus 
military physicians in the State of Oklahoma and in other 
places. Apparently that evolved during the time when the Public 
Health Service and in the military were just beginning to 
require licensure. I think it is true that some number of those 
individuals clearly thought that they were getting a real 
Oklahoma license. Some others knew perfectly well that they 
were not getting an unrestricted license. So there is a 
question about which person are you talking to, because you can 
go back to look at the documentation.
    It is also true that we were complicit because there was at 
least one memorandum in the middle to late 1980s that 
recommended people call a particular number to get this kind of 
license. So the whole purpose of it appears to be, certainly 
from those with intent, to get around our directive which said 
you had to have an unrestricted license, because this clearly 
was not an unrestricted license.

                 LIFE SUPPORT FOR TRAUMA AND TRANSPORT

    Mr. Dicks. I want to take back my time just for a second. I 
think you have answered the question. Just one brief one, Mr. 
Chairman.
    Dr. Martin, I want to thank you for your help in the USTF 
and congratulate you on your career, and Admiral Koenig, and we 
want to work with all of you to make this system better.
    Dr. Martin, last year we added $4 million to the DARPA 
budget to accelerate the development of an innovative portable 
intensive care system known as life support for trauma and 
transport with its capability to provide hospital-grade care in 
forward battle areas. We think it is going to markedly improve 
your ability to handle and save many combat casualties. The 
development of this project has been the result of very 
effective cooperation between DARPA, the Army and industry. 
What we are trying to find out is why the money hasn't been 
released. Does anybody know? Or can you get us an answer for 
the record?
    Dr. Martin. We can give you an answer for the record. I 
don't understand that at all.
    [Clerk's note.--The information was not provided for the 
record.]
    Mr. Dicks. I understand DARPA, along with the Navy and 
Marine Corps, have indicated great interest in this system. 
Unfortunately I have not heard how the Air Force regards its 
system. If you have got anything, or let me know who I should 
talk to.
    Dr. Martin. We will provide the answer to the Committee. I 
might say that the R&D is continuing to move ahead, but in 
order to get the money this committee provided, we have to move 
it into P-6 money, so that if you find it incumbent in the 
future to do this, make sure you put it under P-6.
    Admiral Koenig. Could I chime in for a second on that? I 
think there are eight of those life support for trauma and 
transport will be coming out this year that we are going to 
test. I know the program is moving ahead. We are going to 
deploy these devices with some highly selected operational 
units and see how they perform.
    Mr. Dicks. Good.
    Thank you very much, Mr. Chairman.
    Mr. Young. Thank you, Mr. Dicks. Mr. Cunningham.
    Mr. Cunningham is our in-house test pilot, by the way. For 
those of you in the interest of the Navy problems, we had some 
questions about the new F-18 program. We had a statement from 
the GAO, but we decided to send our own test pilot down to fly 
the airplane, which he did this weekend, and had a positive 
report. But that will be for another hearing.
    Duke, you are recognized.

                       REMARKS OF MR. CUNNINGHAM

    Mr. Cunningham. Thank you, Mr. Chairman.
    This is a tough Committee, but I would like to, first of 
all, make the record clear. My active duty time, the closest 
thing we had to an old-time little town, small town doctor was 
our doctors, our medical doctors, our flight surgeons. I never 
met--in 20 years of service, I never met a bad one or one I 
didn't like. I think that is commendable.
    I also like some of the innovations that you are going 
from, the technology innovations you have aboard ships as far 
as the satellite communications, telemedicine. Those things I 
think are revolutionizing warfare. It does relate to readiness.
    All of us agree that you can go and look in law 
enforcement, you can look in a regular medical practice, any 
field, and you have got some problem areas. I think all we are 
asking--and Mr. Hobson from Ohio has stated quite correctly 
that this is the first group that hasn't come in and tried to 
cover up things, that you have been very forthright. We 
appreciate that, because we all recognize there is a problem. 
If we don't adhere to that, then part of readiness and 
retention is--I talked to the Air Force chief, retention for 
pilots is down. It was 29 percent. It is 33 percent. A lot of 
factors go into that. But where you are deploying more than 
during the Vietnam conflict with your active duty military and 
you have got the family separation, things like having 
malpractice suits, those are the things that resonate among the 
people, the men and women that are overseas, knowing that their 
families have got to face this. I know when my wife was in a 
hospital, she had a nurse come in and stab her four times 
before she got the right blood thing. Those kind of things. All 
the different ones I had had and all the proper care didn't 
matter when it came to one nurse stabbing my wife four times to 
get blood. That is what I remember. I remember the good things, 
too. But I want to let you know that we appreciate that as 
well. I know even aftercare.

                               SUBVENTION

    But there is another concern out there that I hear every 
single day back in my district, and I bet that the chairman, 
from both sides of the aisle, the veterans feel that we have 
not lived up to our responsibilities. The subvention, when I 
first came to Congress in 1990, Duke Cunningham didn't write 
the subvention bill. The veterans in my district, George 
Stevens and a whole group of folks like that got together, 
multiservice, and wrote the first subvention bill, made changes 
all the way through. This was back in 1988 before I ever came 
to Congress. They just handed it to me, I didn't write it, to 
see if I could push it. Here it is 1998, we are just now 
getting it started, but we have a long way to go. Subvention is 
not the wherewithal answer.
    I know HMOs, there are people who love them, people who 
hate them. TRICARE. But where you have got doctors leaving the 
State of California because of HMOs and reimbursement problems, 
we have got to work together on this specially for military. I 
won't belabor it.
    I just wanted to make a statement that I am very happy. I 
had a 7-hour operation, my thyroid taken out last year. Man, I 
tell you, you talk about good docs and good things, I want to 
thank you, but we do need to knuckle down and work on these 
problem areas, because they relate to retention, and they also 
relate to, I think--I would make one partisan statement. When 
you look at these cuts in veterans and military, I think the 
President's budget is wrong. I think his priorities are totally 
wrong. One hit in here I would take a look at, where you have 
something like $529 million increase to the Sheriff of 
Nottingham, IRS, and then you cut other things, and here is a 
whole list of the things that increase in spending in the 
President's budget. It just doesn't equate to people that have 
served this country honorably, risked their lives and their 
families and the sacrifices they have made. That ought to be a 
priority and more of a priority. I know you have nothing to do 
with that here.
    Dr. Martin. You don't mind if we skip that question, sir?
    Mr. Cunningham. No, I don't. But I just want to thank you 
and thank the members of this Committee. Mr. Chairman.
    Mr. Young. Thank you, Mr. Cunningham. Mr. Visclosky. He is 
the most patient member of this subcommittee, by the way.

             QUALITY OF HEALTHCARE FOR MILITARY DEPENDENTS

    Mr. Visclosky. Dr. Martin, something you just said really 
struck home with me, talking about your children. One of my 
sons is 11 years old as of today, and Timmy is 7. My great 
concern here is the confidence the personnel have in going to 
the centers. Recognizing that the overwhelming amount of care 
and the procedures taken and the outcomes are very good and 
very favorable, I do think that if you are in the military 
services, you ought not to have to face additional concerns 
about health care for your family. If I send my 7-year-old kid 
in, let alone my spouse or myself, what kind of care am I going 
to have? It is clear from your testimony all of you gentlemen 
understand that. I just feel compelled with two boys of my own 
to make that statement, that I think there is a clear urgency 
here.
    Dr. Martin. I think, Mr. Cunningham, that you were saying 
the same thing. When our people are deployed, like they are 
now, in the Gulf, or in Korea or wherever, the thing they worry 
about is how their families are cared for. They want to make 
sure that if something bad happens to the family, the care and 
treatment they need will be there and bad things can happen. 
Nothing can be as devastating as that circumstance. It boils 
down to how people are treated. The whole issue, can you get an 
appointment. When you do get an appointment, do people care 
about you. There are a lot of those pieces. If you are worried 
that your family isn't going to be taken care of when you are 
gone, you become a lot less effective warrior.
    I think those points are absolutely central to why medical 
consumes such a large part of the Department's concerns right 
now. It ends up being tied to everything else. Every chief can 
talk about medical. Every commanding officer out there talks 
about medical. It is a big deal. This is a major part of the 
quality of life concern that they don't want to see eroded.
    General Roadman. I absolutely agree with that. When I talk 
about the inverted pyramid of not having folks that are taking 
care of people in continuity, Mr. Cunningham, as you talked 
about flight surgeons, that is someone who followed you, knew 
you, knew your family, knew the things over time.
    It is absolutely critical, I believe, for us to get to an 
impaneled primary care provider so that when people are sick, 
they know who they go to; that when they go to the clinic, it 
is not the first visit for the sixth time, it is actually their 
sixth visit. So as you talk about confidence, that is the art. 
What we have got to get to is a very broad base where we have 
primary care providers who are following people in continuity, 
and then the confidence goes up. It is really a bonding between 
patients and their providers.
    So I think we are--we agree with you absolutely, and we are 
in the force molding approach to fix that. I will tell you, I 
don't think that we can fix that confidence issue until we do 
remold the shape of the pyramid. We are all doing that as fast 
as we can.
    General Blanck. In fact, if I may, I couldn't agree more 
with everything that has been said. I appreciate and understand 
very much Mr. Hobson's questions. Mr. Dicks' outrage, I think, 
speaks volumes, and we are all trying to get at that. Part of 
what this report card and all the other things that we have 
said, the pyramid, the primary care providers getting at it.
    But I have to make a statement about something, Mr. Hobson, 
you said. You were quoting. That is, the military is a magnet 
for bad doctors because indeed that was a charge made, with 
some truth to it, in the past. Let me absolutely assure you, 
and I do so on behalf of all of us, that that is no longer 
true. To the degree it ever was, it certainly is not true at 
all now.
    For example, last year we got in the Army all of our 
graduates from the Uniformed Services University of the Health 
Sciences, quality school, quality graduates; secondly, from the 
finest United States medical schools through the Health 
Profession Scholarship Program. That is where we get them. Off 
the street, we took one carefully screened, highly qualified 
specialist to make up in an area where we didn't have anyone 
in-house. But one. Sometimes it is five, sometimes it is three.
    My point is where we get them, and we have the training 
responsibility and the oversight responsibility, I will tell 
you, there will be no more of some of the doctors you have 
asked about in our system. That gets to the quality that I 
think we have been talking about, and that is assurance and 
confidence.
    Mr. Young. If the gentleman would yield.
    Mr. Visclosky. Absolutely.
    Mr. Young. In the event that one of these doctors we are 
talking about leaves the service and applies to serve in 
TRICARE or with CHAMPUS or with one of the other systems, do 
you have a way to determine that person's capability?
    Dr. Martin. Yes, sir. There are basically two rules. If 
they are a member of the TRICARE networks, we expect our 
contractors to screen the National Practitioner Data Bank, to 
review it, and, in fact, they are clearly expected not to allow 
physicians with previous problems, and certainly ones that had 
problems with us, to serve in any of the networks.
    Now, CHAMPUS is different by statute. CHAMPUS basically 
says that any doctor who wishes to participate in CHAMPUS and 
who has a current State license may practice, so that when we 
talk about the indemnity program, where people go to whatever 
doctor they want, the way the current statute is written, we 
have no current legal authority. If you have got a good license 
in the State of New York, to put it very bluntly, to use the 
case we were talking about, if you wanted to go to a particular 
OB-GYN that we got rid of in New York, under standard CHAMPUS 
you could go to that doctor legally. In one of our networks, 
our network contractors would not allow that doctor to 
participate.
    I wanted to add one thing to Mr. Visclosky's focusing in on 
the quality, with children especially. It hasn't been stated, 
and I am surprised Mr. Hobson hasn't already raised it.
    Mr. Visclosky. I want to follow up on the Chairman's 
remarks because I think he brings up a good point. During my 
service on the Treasury-Postal Subcommittee, there was a 
difficulty in matching up the names of physicians who had been 
convicted of fraud and then being able to come back and collect 
payment under Federal health insurance. It took 18 months of 
beating agencies up, because they said it wasn't possible, 
through whatever system they had, to match these names up, to 
now do that. I think that is an absolutely important point as 
far as everybody involved in that system, is that those people 
are on that network so they are known.
    The other question that I think goes to the issue of 
confidence is the issue of blood supply. I don't want to ask a 
specific question about Bethesda Naval Hospital. My 
understanding is the FDA regulates blood supplies. I assume 
they do that for all of the blood supplies in the military. 
Have they issued any unsatisfactory reports in the last 3 
years?

                             BLOOD SUPPLIES

    Dr. Martin. We have had no report on a donor center. There 
are two things that they do. They check our transfusion 
services, where we have had no substantial complaints about 
noncompliance. The donor centers are the ones that actually 
collect and dispose of the blood. That is where we have the 
difficulty. In many--well, I would say in almost all the FDA 
evaluations as a part of their regulatory process, they 
identify areas for improvements to be made, whether it is us or 
the civilian sector. In other words, it is very rare for the 
FDA--or for that matter JCAHO--to go into a facility that they 
don't identify some numbers of things that need to improve.
    The difficulty in this particular case which made it 
exceptionally different than any experience we have had in the 
last 3 or 4 years, was the scope of the deficiencies all in two 
areas, staff and their training. It was seriously problematic, 
and gets to numbers of people and issues like that. But equally 
importantly, it addressed the whole issue of not using the 
appropriate automated systems. One of the reasons it was 
stopped, was that they were not even following our own rules in 
regards to maintaining this automated information about 
tracking all these units of blood.
    Mr. Visclosky. Doctor, what I would ask, is if there was a 
substantive issue that was raised by the FDA with any of the 
blood supplies during the last 3 years? If you could answer 
that for the record, I would appreciate it.
    Dr. Martin. Certainly. I will do that. The fairest thing to 
do is to go back to the Food and Drug Administration. I will 
simply ask them, and they will be able to assure us directly if 
there were any other cases. There is no question about the 
Bethesda case.
    [Clerk's note.--The information was not provided for the 
record by the Department.]
    Mr. Visclosky. The final question I have is on your centers 
of excellence, HCFA apparently is starting a procedure as far 
as identifying private institutions. Is your effort patterned 
after that; are you working in conjunction with that?
    Dr. Martin. Actually we started the STSs 5 years ago. I 
think we are probably at best in parallel. The Department of 
Veterans Affairs is doing the same thing. For very specialized 
procedures, payers--and we are a payer--are looking to the 
differences in outcome. Where you have big centers that do a 
lot of certain procedures, and have highly skilled medical 
staff and other staff, the outcomes are better. So I think we 
are all moving in parallel. I think the first group to do this 
was Prudential, in 1989. They began to say, we will only pay 
for certain procedures if they are performed in one of these 
high-quality centers. That is exactly the model we are 
following.
    Mr. Visclosky. Thank you, Mr. Chairman.

            UNIFORMED SERVICES TREATMENT FACILITIES (USTFS)

    Mr. Young. Thank you, Mr. Visclosky.
    Mr. Dicks mentioned in passing USTFs, and I did earlier in 
my earlier statement. Let me get into the question of USTFs and 
how they fit into the overall problem we are facing with 
TRICARE, Medicare subvention, CHAMPUS, as they relate to each 
other. We have 10 USTFs, if I understand correctly, in 
different parts of the country. They do under contract with the 
Defense Department take cases or take contracts with people who 
are eligible. Let me read off several questions, and then just 
respond generally if you would.
    There has been some trouble integrating USTFs into the 
system of TRICARE providers. I am wondering how this 
relationship has changed as TRICARE advances. Do USTFs abide by 
the same guidelines and rules as other TRICARE providers? Are 
they the same? Are they different? Is there a difference in 
cost per beneficiary?
    Some USTFs believe that they should be able to enroll as 
many military beneficiaries as would like to enroll with them. 
I would like your view on that. Some USTFs believe they should 
have a specific appropriation, I would like your response on 
that. And what is your current estimate regarding the amount of 
double billing that might be going on, and will that continue 
with the implementation of TRICARE? And if so, how can we avoid 
the costs?
    Can you answer that all in 30 seconds?
    Dr. Martin. Maybe 30 seconds each.
    Mr. Young. Just kidding.
    Dr. Martin. In regards to integrating, the USTFs were 
originally the old Public Health Service hospitals. They were 
given special legislative protection or language, so they were 
completely independent from the entire system with a separate 
appropriation. It was Congress that made the decision to begin 
to make them a part of the military health system.
    Very frankly, 3 or 4 years ago, and I think the USTFs would 
tell you this as well, there was very little effective dialogue 
or cooperation between the Department and the USTFs. It was 
very bad. Lots of you got lots of letters. Whether it be 90 
percent or 95 percent, there has been extraordinary progress 
moving toward making them a part of our system. We sat down 
with the USTFs and came up with an agreement that all of us 
signed, a legislative proposal all of us signed up to, and 
those are the documents that we are operating under. The 
overwhelming problems of being separate and unrelated have 
largely been solved. But we still have some problems.
    Fundamentally, they do follow the same rules. Certainly in 
areas like quality they have been incorporated into our overall 
system. Most of the differences had to do with differences that 
are associated with how they are designed differently. These 
are almost born out of necessity, because they are not the same 
as our direct care system and not the same as our contractor. 
But the overwhelming predominance of how we approach them is 
with the same set of rules.
    The issue of cost per beneficiary has been a contentious 
issue for some number of years. The Congress asked GAO, IDA and 
the Congressional Budget Office to do independent studies, 
because you got different answers from us and the USTFs. We 
provided copies of those studies to your staff today.
    For Medicare eligible individuals, there is a dramatic 
difference. In USTFs, we pay full cost for what otherwise 
Medicare would pay. One of the things that all three reports 
say is that for each Medicare individual who signs up in a 
USTF, the DOD appropriation ends up paying what Medicare 
otherwise would pay for.
    For active duty dependents, the costs are much, much 
closer. First, we negotiate rates, and second we pay for the 
overwhelming bulk of our active duty dependents either inside 
our system or through CHAMPUS.
    With retirees, it is sort of in-between. To the extent 
retirees--who we pay for--sign up with the USTFs, even though 
they are somewhat more expensive, the costs are at least 
reasonably within the range. For those who sign up and would 
have had some other type of coverage, now we are paying for 
their care when previously we didn't. I think all three reports 
lay that out.
    By the way, the differences in costs are in the hundreds of 
millions of dollars. For Medicare-eligibles you are talking 
about $130 to $150 million that would have been paid by 
Medicare. But with the USTFs, now your committee is paying for 
those individuals instead of the Medicare program.
    In regards to enrollment, what we have tried to do is to 
continue reasonable growth of the USTF program, particularly 
for people who are relying on us. Our current policy is if you 
are a dependent of active duty, and you want to sign up with a 
USTF, that is automatically okay. We just allow that. We are 
much more reluctant----
    Mr. Young. Some of them are of the opinion that you have 
put a cap.
    Dr. Martin. Not on dependents of active duty. There is not 
a cap in numbers of people, but there is a cap in numbers of 
dollars. The USTFs used to have an appropriation, this 
committee used to give it an appropriation. I think it was in 
the 1996/1997 time frame. It became obvious that it was going 
to cost more than you had appropriated to get through that 
year. So we all agreed that we would no longer have a line item 
appropriation.
    For the record, the USTF program actually has continued to 
go up. In fiscal year 1996, it was $315 million; in 1997, it 
was budgeted at $335 million. We spent $343 million, which is 
more. In 1998, the budget was $341 million. I anticipate this 
year we will spend $366 million. For fiscal year 1999, the 
budget is proposed to be $380 million.
    The difficulty with fiscal year 1999 is very simple. If I 
spend more money in the USTF program, I will be forced to take 
the money out of the direct care system. We don't print it over 
there. Our expectation is very clear. The program still is 
increasing. We will work with USTFs about fully expending our 
targeted appropriation, but we cannot have open enrollment 
because if the added costs are 30 or 40 or 50 million extra 
dollars, I have to take it out of our military hospitals, which 
I can't afford to do.
    By the way, if we had an appropriation for fiscal year 1996 
to date, I would have spent about 40 million less dollars this 
year than I did last year. So on the one hand, I think it is 
not a good idea with an integrated system to have a set-aside. 
But it might not be a bad idea to have a set-aside if you want 
to contain the costs in USTFs.
    In regards to double billing, which, by the way, is not the 
primary problem with USTFs. In fairness, the problem is that 
HCFA, Medicare, is double paying. It is essentially a 
continuing problem between two Federal agencies. We have not 
been very successful in getting Medicare to help us on this. So 
they continue to pay bills for patients for whom theoretically 
we are completely paying. But if you are a USTF, and the 
patient is submitting independently a bill to Medicare, there 
is no way you can know that. So if somebody needs to be dinged 
on that, it is the two Federal agencies.
    I am optimistic about the continuing evolution of the USTFs 
within our system. They are important institutions, but we are 
still at the phase where we are wrestling with their size and 
how much money is going to be allocated to them. I am 
optimistic that is going to get sorted out. I think the idea of 
a fair increase from the 1996 base ought to be looked at by the 
committee. But the idea of it being cheaper or the same costs, 
the independent reports clearly say that is not true.
    Mr. Young. I would like to ask Mr. Hobson to assume the 
chair since this chairman has a commitment with the Judiciary 
Committee 7 minutes ago. If that is all right, Mr. Hobson, if 
you would. Thank you very much.
    Dr. Martin. Thank you, Mr. Chairman.
    Mr. Young. I thank all of you for a very good hearing.
    Dr. Martin. I was hoping now that you had moved to the 
chair, you would adopt Mr. Young's demeanor, his very sensitive 
and thoughtful approach to us.

               HEALTHCARE COMMITMENT TO MILITARY RETIREES

    Mr. Hobson. Let me start by saying, the whole goal in this, 
and I think you have all understood this, is that we want to 
get the best medical care that we can for our service people. 
We want to be cost-effective about that. Again, I want to say 
that your attitude, and I know we have got some short-timers 
here, has been very good in this. I hope we are sending some 
strong messages, just as you are, and in the end that we are 
all going to come out with better health care that we are more 
confident about and better systems and procedures than we have 
had in the past.
    I am concerned about, as I look at that brochure, are we 
still making those promises? Nobody said that when we talked 
about it before.
    Dr. Martin. I think officially the Department's personnel 
community, which is largely responsible for recruiting, 
recognized this issue and changed the physical documents since 
1992 or 1993. It is nonetheless fair to say that the idea of 
what the benefit package is, including health care, continues 
to be addressed as one of the quality of life issues and one of 
the retention issues, particularly for reenlistments.
    Mr. Hobson. I have a lot of military retirees in my 
district. As you get older, and I can say this since I am a 
little older, the only thing you remember about reupping was 
health care. It had nothing to do with anything else. It was 
all health care.
    Dr. Martin. And each year that goes by, you remember that 
more vividly.
    Mr. Hobson. I understand that.
    I am going to go back and let you talk about your children, 
which was part of your thing.
    Dr. Martin. It really fit in. One of the things 
particularly Mr. Hobson has been pushing very hard for us to 
come up to is the ultimate requirement that we develop some 
kind of computerized patient information system, to really 
provide quality of care. There are bunches of pieces of quality 
of care. The one thing that is frankly lacking from most 
systems now, and is clearly lacking from ours, is an automated 
record. Not only for our active duty members, but for all 
patients. General Blanck spoke to one component of that, which 
is the personal information carrier. Admiral Koenig talked 
about the idea of what telemedicine can do reaching out. These 
should all be linked to one record system.
    The fact of the matter is that for both our active duty and 
our dependents, we depend on a record system that is the same 
kind we had in the 18th century. You have these huge hand-
written records. As a practitioner, one of the Surgeons pointed 
this out, it means when you come in to see a patient, if it is 
the first time you have ever seen the patient, you have got to 
wallow through this big record. It is like it is the first time 
you have ever seen the patient. That puts the patient and the 
practitioner at a disadvantage. It is less effective. More 
importantly, it is less quality.
    One of the things that the committee has been pushing us to 
do and now has been adopted by the Secretary as one of our 
major initiatives, is to move to a computerized patient record. 
We are going to do it with DVA so we can move our information 
to the Veterans Affairs Department. We are in the process now 
of jointly procuring such a system. In fact, the State of 
Louisiana has joined--Mr. Livingston might be interested in 
that--in this joint endeavor that we literally have on the 
street to find what is available commercially, what is the best 
out there, stop developing it and move ahead.
    Mr. Hobson. This is a wonderful, positive change, I think, 
overall. I think hopefully you are right on the cutting edge of 
this, and other people are going to look at you just like 
Louisiana is. We may have to go over that and come back, but 
since this is my one chance to be in the chair, and I don't 
think the way things happen I am ever going to get this for a 
long time, there are a few questions that I need to ask you. 
One is the Sierra Health Services TRICARE contract.
    Dr. Martin. Yes, sir.

                        TRICARE CONTRACT AWARDS

    Mr. Hobson. There has been some concern about the recent 
award of a $1.3 billion contract to Sierra Health Services, a 
Nevada-based company. Concerns stem from two matters that have 
received attention since the contract was awarded. First, in 
1991, the CEO of Sierra Health Services, Dr. Anthony Marlon, 
was convicted of fraud in connection with a contract to provide 
health care coverage to Federal employees under the Federal 
Employees Health Benefit Plan. The U.S. Attorney's Office in 
Las Vegas, Nevada, determined that he had made false, 
misleading statements to the government, pleaded guilty to 
false information, was sentenced to 24 months probation and 
fined $25,000.
    Second, after the award for region 1 was announced, Dr. 
Marlon was quoted in the Las Vegas Review Journal stating, one 
of the reasons we submitted a bid, quite frankly, is we have no 
business on the East Coast, and the government will fund our 
expansion. He went on to say, if it costs more to treat the 
CHAMPUS beneficiaries than it is anticipated, the government is 
going to pick up the 80 percent of the cost overrun.
    There has been some concern about the fact that DOD awarded 
the $1.3 billion contract to Sierra Health Services, where the 
chairman was convicted of fraud in a Federal contract. Number 
one, does this concern you? Is it consistent with 
administration efforts to crack down on health care and 
Medicare fraud? And why should DOD award a $1.3 billion 
contract to a company that has been convicted of defrauding the 
Federal Government?
    I am also concerned about his statements of expansion. He 
stated in the article that the government would incur all or 
most of the risks of a cost overrun. I think this should 
disturb us. I would like to know if it does you.
    Particularly in mind that Sierra's winning bid was so low, 
do you think Sierra's proposal was too low?
    I understand the Sierra award has been protested. What is 
the nature of the complaint? And is it routine?
    Dr. Martin. First, going to the quotes in the paper, which, 
in fact were quotes, and we were deeply disturbed. Rather 
quickly I met with Dr. Marlon, I can assure you of that. 
Subsequently he printed a retraction saying that, it was not 
only inaccurate what he said, but also in regards to the loss 
corridors and how contracts operate, those statements were just 
simply not true. The fact is that there are shared risks 
between the government and the contractor, and that Sierra 
would take very substantial financial losses before we started 
to lose any money. That is just a statement of fact.
    In regards to the current protest, the basis of the protest 
is not these other items, but more--as I think Mr. Young or Mr. 
Murtha asked earlier--the question of the process that we use. 
The basis of the protest is that we continued to do what we did 
with the other contracts and didn't change our process.
    The question about the previous legal problem of Dr. Marlon 
ended up being a legal issue for the Department. Within the 
current statutory framework, the Office of General Counsel--
this is not the doctors who made this decision, it was the 
lawyers--decided that within the current statutory framework, 
Dr. Marlons legal problem could not be a consideration for this 
particular award. Once that decision was rendered, we treated 
the contract process as we normally would have.
    But I can assure you, and Dr. Marlon would tell you if he 
were here that we have had some fairly candid discussions about 
his quotes in the newspaper. As far as I was concerned, they 
were unacceptable, and I told him that.
    Mr. Hobson. I want to ask you about region 2 and 5.
    Dr. Martin. Yes, sir.
    Mr. Hobson. Anthem Alliance was awarded a $3 billion 
TRICARE contract to provide health care services for region 2 
and 5. The contract was protested. GAO made a preliminary 
ruling against Anthem Alliance. Final determination has not 
been made. Can you talk about the protest? Which company 
protested? Is there anything unusual about this? When do you 
expect GAO to make the final decision? And how long will 
TRICARE be delayed if the protest is upheld? And if your answer 
is shorter than my question, I have only got one more. Then you 
will have to come back.
    Dr. Martin. Both losers filed a protest. Every single one 
of our major contracts has been protested. It is not new. The 
basis for the protest was the process by which we gave certain 
rankings and the process by which we gave credit for certain 
parts of the procurement. That was the basis of the GAO 
determination, which currently is a recommendation.
    The Department is making a judgment of how it will proceed. 
Ultimately it is the Department or the courts that will make 
the final judgment, but that is being discussed in the Office 
of General Counsel as we sit here today.
    Mr. Hobson. I actually have two things. I want to make the 
one a statement. I really have a problem with the dependents 
injured by malpractice if they are overseas. I think they ought 
to have the same redress as people here. I guess very quickly, 
do you think the code should be amended so that we treat people 
the same overseas as we do here?
    Dr. Martin. There are two issues. The Feres Doctrine is 
purely a legal active duty issue. But on this particular issue, 
our opinion, not being lawyers, just as physicians, we believe 
our dependents ought to be treated the same way wherever they 
happen to be assigned. And there shouldn't be two----
    Mr. Hobson. I will probably be doing something on that.
    Dr. Martin. We would be delighted to have general counsel 
visit with you in regards to that.

                            NAVY BLOOD BANK

    Mr. Hobson. The last question I have relates to the Navy 
blood bank. According to the Washington Post, after 3 months 
investigation, Food and Drug Administration, and I don't know 
if this is correct or not, forced the closure of the Bethesda 
blood bank due to quote sloppy management practices and rampant 
bookkeeping errors that sent suspect blood into the military 
blood supply, including units not thoroughly tested for the 
AIDS virus, unquote. Among other things, the FDA reported that 
two patients receiving transfusions received the wrong type of 
blood last year. The FDA also reported that 126 units of blood 
were left in the blood bank even though they had not been fully 
screened for the AIDS virus. The mistake was not noticed for 
nearly a year, and 33 units of blood remain unaccounted for 
today.
    Admiral Koenig, what happened that caused the closure of 
the blood bank at Bethesda Naval Hospital? Two, why did it take 
the FDA to identify and uncover the serious management problems 
that were there? And why didn't the commander of the hospital 
and the senior staff know about these problems? What has been 
done to correct it? I have got to go see a naval guy this 
afternoon to get some things taken off my face here, so I am a 
little worried about asking those questions. But I think it is 
important----
    Admiral Koenig. Hopefully you won't need a transfusion for 
that.
    Mr. Hobson. Definitely not after this.
    Admiral Koenig. We have been concerned about problems 
there, so we asked the FDA to come in. All the donated blood 
was tested for AIDS. There are now tests that can be done in 
addition to. There is the antibody test, the antigen test. 
These donated blood units had all been tested with the antibody 
test. Those 126 units, if we went ahead and tested them with 
the new antigen test, the likelihood of finding a positive is 
very close to zero. Despite the low probability of a positive 
test finding all these concerns real. That is why we asked the 
FDA to assist. We voluntarily shut down the blood bank. The FDA 
didn't tell us to.
    Dr. Martin. The blood donor center, not the blood bank.
    Admiral Koenig. We shut down the blood donor center at 
Bethesda without the FDA telling us to because we were aware of 
the problem.
    Mr. Hobson. Do you plan to reopen this?
    Admiral Koenig. Eventually, after we are totally satisfied 
that that blood donor center is operating properly. We think it 
is going to take a minimum of 6 months to get it back to where 
it should be.
    Dr. Martin. For the record, although I won't be here, there 
is a proposal to consolidate into one our three donor centers 
in the national capital region. There are two questions. Number 
one, should it be reopened at all, which Admiral Koenig's 
people are now considering. Then the second question, one that 
the three Surgeons need to work on with health affairs, is why 
do we have multiple donor centers in proximity in a geographic 
area?
    Admiral Koenig. I can say all three of us basically feel 
that way. The services we are working so closely together on 
everything now, we question why are we running three separate 
donor programs; why don't we just run one?
    Mr. Hobson. One of the things that has come out of this to 
my satisfaction is you do seem to be working better together, 
and you do seem to have better leadership than you have had 
before.
    The one thing I want to say in the end, I think this is in 
the best traditions of our country. The media came out, and 
instead of people denying it, the media, we looked at it, you 
guys looked at it, we said, hey, we have got problems here, we 
have all tried to work together. I think as a result of that, 
we have got some good improvement for the people of this 
country. I think that is the best attitude, I hope.
    I am really concerned that some of you are leaving. My rule 
about short-timers, in doing it, but I hope you leave a legacy 
that the next people come in realize that by working together, 
we can move forward better than just getting in fights over 
this stuff, because I think--I am really excited about some of 
the things that we are doing now. We have just got to keep 
those going.
    I want to thank you all for working with this Committee in 
the manner in which you have done. It is in the best traditions 
of this country. Thank you, gentlemen. The Committee is 
adjourned.
    [Clerk's note.--Questions submitted by Mr. Lewis, and the 
answers thereto follow:]

                               Readiness

    Question. General Blanck, I have a question that involves 
Readiness. Your predecessor, General LaNoue, had indicated in 
congressional testimony on several occasions that his number one 
problem in readiness was ``Clearing the Battlefield.'' Would you 
elaborate on what that means and tell us what the Army has done to fix 
this problem?
    Answer. Clearing the battlefield refers to the acquisition, 
doctrinal treatment and medical evacuation of combat casualties, 
disease, and nonbattle injuries from anywhere on the battlefield to 
definitive care. The Army and Air Force have approved the use of C-130 
aircraft to evacuate within the Division Rear areas. The Army has also 
approved operational requirement documents for an aeromedical 
evacuation version of the UH60 helicopter (UH-60Q), armored medical 
evacuation vehicle and armored medical treatment vehicle to meet the 
need. The UH-60Q is nearing the end of the integration and 
qualification phase of its program and will be ready for a production 
and fielding decision as early as first or second quarter fiscal year 
1999.
    Question. The Congress has provided funding to buy several UH-60Q 
MEDIVAC helicopters over the last couple of years. How important is it 
that we continue to provide Congressional plus-ups to this program?
    Answer. The Congressional plus-ups have proven to be very important 
for the UH-60Q program. The initial funding paid for the integration 
and qualification phase of the program and will produce four UH-60Qs 
based on the UH-60A airframe. The congressionally provided fiscal year 
1997 funds, together with funds provided by the Project Manager, will 
produce four more modern medical evacuation aircraft and will qualify 
the UH-60Q mission kit on the UH-60L airframe. The Army Office of the 
Deputy Chief of Staff, for Operations and Plans has tentatively planned 
for these aircraft to be fielded to the 50th Medical Company at Fort 
Campbell, KY; one of our highest priority units. Fiscal year 1998 funds 
will be spent as directed, to procure UH-60Q mission kits. These kits 
will be used as contingency stock to reduce risk of UH-60Q specific 
spare parts stock-outs during the first year or two of operational 
employment. The plus-ups have also assisted with closing the production 
gap in the POM and provide enhanced capability in the near term to a 
limited number of units.
    Question. What is the Army doing to fully fund this program?
    Answer. Funding for the UH-60Q program begins in fiscal year 1902 
and extends to fiscal year 1928 under the current Army modernization 
strategy. While this schedule doesn't modernize the MEDEVAC fleet as 
quickly as the AMEDD would like, it does provide the basis for eventual 
modernization within programmed Army resources. The Army has 
prioritized the UH-60Q along with its other high priority needs.
    Question Do you think the Army could buy four or five less tanks to 
help solve this problem of clearing the battlefield?
    Answer. The current budget reflects the Army's priorities. Any 
realignment of funds would need to be associated with a corresponding 
change in these priorities. This is an issue the Army Staff should 
address. The UH-60Q is urgently needed to address medical battlefield 
deficiencies and priorities.
    Question. How many would be enough this year if funding was 
available?
    Answer. Currently the Army Force Structure requirements are for 357 
UH-60Q aircraft. Until the Army can begin and maintain full production 
of the UH-60Q program the Blackhawk Program Manager cannot 
realistically support the production of more than eight UH-60Qs in 
fiscal year 1999. These eight aircraft could complete fielding of UH-
60Qs to the medical company at Fort Campbell and provide an orderly 
ramp-up from the four produced with the fiscal year 1997 funds.
    Question. I have recently learned that there is a new technology 
which would eliminate bacteria and viruses, like the AIDS virus, and 
hepatitis from blood used for transfusions. I am told that this 
technology is being tested in Europe and in this country under FDA 
approved protocols. It would no longer require us to rely on routine 
testing to ensure a safe blood supply.
    Are the Services aware of or supporting any research into 
technologies to decontaminate blood products so that the safety of the 
blood supply will not be totally dependent on testing and vulunerable 
to the kinds of problems which occurred at the Navy Blood Center?
    Have you consulted with the FDA and or the private sector to 
identify any such technologies which might become available in the near 
future? I would like to see you do that, and get back to me regarding 
what efforts are being made to develop these technologies as rapidly as 
possible.
    Answer. The Navy is not aware of the specific technology you 
reference that is being used in Europe other than solvent detergent 
plasma. The FDA is currently reviewing the Solvent Detergent Plasma 
technology for lipid encapsulated virus inactivation. This technology 
will not eliminate the risk of bacterial contamination or non-lipid 
encapsulated viruses (i.e., hepatitis A and parvovirus B 19). The 
Department of Defense is currently pursuing a contract with the 
distributor of the solvent detergent product to make it available in 
all its medical treatment facilities when the product is finally 
licensed. If approved by the FDA, it is highly unlikely that the FDA 
will eliminate viral marker testing.
    The Navy continues to support research and development in the area 
of viral inactivation and is currently limited by financial 
constraints.

    [Clerk's note--End of questions submitted by Mr. Lewis. 
Questions submitted by Mr. Skeen, and the answers thereto 
follow:]

                          Medical Malpractice

    Question. In response to various news media articles that bought up 
the problems related to medical malpractice, could you provide for the 
Committee an explanation of the Department's reactions to these 
problems and explain the extent to which the Defense Department is 
fiscally liable for damages related to these malpractice incidents?
    Answer. The articles cited cases of poor outcomes and questioned 
why some of these providers hadn't been reported to the National 
Practitioner Data Bank in addition to the fact that some of them held 
``special'' Oklahoma licenses. DoD has accepted the criticism and used 
it as an opportunity to improve. The reporting and licensing issues 
surrounding the articles have been evaluated and action is being taken 
to address these problems.
    The Risk Management Committee has been established, as previously 
mentioned, to monitor and improve the risk management process by 
providing a forum for communication and information sharing. Membership 
includes Health Affairs, the Services Quality Management Division head/
risk managers/general counsel, Department of Justice, and the 
Department of Legal Medicine/Armed Forces Institute of Pathology. 
Indicators such as the number of malpractice payments, the number of 
reports submitted to the National Practitioner Data Bank, timeliness of 
reports, and backlogs will be monitored.
    The External Peer Review Agency has been established to review 
cases where a malpractice payment has been made and the Surgeons 
General has determined the standard of care was met or it was a system 
problem. This will provide a check and balance to the process as well 
as confirmation of the validity of the process.
    Providers with ``special'' Oklahoma licenses have been removed from 
patient care or practice under the supervision of a license physician. 
Providers have been given until April 1999 to obtain an unrestricted 
license from Oklahoma or from another state. Policy memorandum 
``Management of Medical Licensure & Modifications of Reporting 
Procedures Regarding the National Practitioner Data Bank'' was signed 
and promulgated February 3, 1998 stating that all DoD healthcare 
personnel must take action to ensure they possess a current, valid, and 
unrestricted license.
    Compensation from the government is available for patients injured 
as a consequence of medical malpractice. For most patients, the remedy 
is under the Federal Tort Claims Act. Payments under this Act are paid 
primarily from the Judgment Fund, which is administered by the Treasury 
Department. The exception to this is that cases which result in 
payments under $2,500 are paid by DoD. In cases arising from torts in 
foreign countries, the remedy is under the Military Claims Act. In 
these cases, the first $100,000 of any case settlement is paid by DoD, 
with any remainder paid by the Judgment Fund. Finally, for active duty 
members, the remedy is under DoD disability compensation programs, 
payments for which are the responsibility of DoD.
    Question. To what extent has the care for Active Duty Members and 
Veterans been affected by these doctors?
    Army Answer. We are practicing quality care now. Additionally, we 
are taking steps to improve the current level of high quality and have 
taken steps to build confidence in our patients.
    Navy Answer. In general, given the ``hundreds/thousands'' of 
patients these providers have successfully treated in the military 
system, we do not feel the impact has been ``significant'' in terms of 
numbers. We are always concerned when a negative outcome occurs and, as 
previously mentioned, systems are in place to initiate corrective 
actions. Our primary goal is to continue to improve the services 
provided to all beneficiaries.
    Air Force Answer. Overall there has been minimal impact to the 
health care received by our beneficiaries.
    There are six Air Force Physicians currently on active duty who 
have the special Oklahoma Licenses. These six providers have not been 
involved in any medical malpractice claims. However, there is a 
malpractice history on two providers who held Oklahoma Special 
Licenses. The two providers were reported to the National Practitioner 
Data Bank and have since separated from the Air Force.
    On October 1, 1995, Air Force Instruction 44-119 included for the 
first time, guidance on management of providers who are named in 
multiple malpractice claims. If a provider is found to have deviated 
from the standard of care in two or more claims within a three year 
period of time, the Air Force Surgeon General's Office notifies the 
provider's current commander. The notification instructs the commander 
to review the practice of the provider, consider taking an action which 
may affect their ability to practice fully (adverse privilege action), 
and response back to the Surgeon General with their plan of action. 
This instruction is now part of the quality management program within 
the Air Force Medical Service.
    Question. Although we are only 12 days into the enrollment period 
for the TRICARE Retiree Dental Program would you comment on the 
progress of this program for the Committee?
    Answer. The TRICARE Retiree Dental Program (TRDP) became available 
on February 1, 1998. As of April 12, Delta Dental reported enrollments 
of retirees and surviving spouses at 128,372. This count is based on 
the number of enrollment units (i.e., single, two person, family) and 
not the actual number of individuals covered in instances where 
multiple family members are enrolled.
    Two of the biggest issues/complaints about the program are the 
scope of services and the limited eligibility for the program. By law, 
current coverage excludes procedures that would be of great benefit to 
retirees and their families (e.g., permanent crowns, bridges, and 
dentures). The Department has also received numerous complaints about 
the limited eligibility. Many retirees, who already have dental 
coverage or have dental appliances (i.e., dentures), only wish to 
enroll their family members in the TRDP. Presently, the law prohibits 
family members of retirees from separately enrolling in the TRDP if the 
sponsor is still alive. Further, the law currently excludes unremarried 
former spouses of retirees from TRDP eligibility.
    Question. I am concerned about the availability of health care 
providers in rural areas, such as New Mexico, and their participation 
in the TRICARE program. Would you provide for the Committee a listing 
of the TRICAprogram providers by community for the State of New Mexico?
    
    Answer. Attached is a list of the preferred network providers 
contracted by TriWest Healthcare Alliance, the managed care support 
contractor for New Mexico. One listing consists of those providers 
contracted under the TRICARE Prime option. The second listing includes 
those providers contracted as TRICARE Extra providers. The third list 
consists of those specialists contracted by TriWest to provide health 
care services to our beneficiary population.

    [Clerk's note.--End of questions submitted by Mr. Skeen. 
Questions submitted by Mr. Nethercutt and the answers thereto 
follow:]

                           Smoking Cessation

    Question. Tobacco smoking is estimated to cost the Department of 
Defense more than $900 million a year in health expenses and lost 
productivity. Last year the House Report urged Health Affairs to 
develop an effective smoking reduction plan that meets the Healthy 
People 2000 target. What progress has been made over the last year in 
the area of smoking cessation?
    Answer. The Department of Defense is a strong proponent of a 
tobacco free force. In addition to our focus on the active duty member, 
we seek ``healthy communities--at home and abroad, in peacetime and in 
war'', which also reinforces our commitment to family members and 
retirees. We have numerous effective programs throughout all the 
military services, to reduce the use of tobacco products. All of our 
TRICARE contracts, which supplement our military system, seek to reduce 
tobacco use. We are actively evaluating the effectiveness of our 
tobacco cessation and avoidance programs. We use the Worldwide Survey 
of Health Related Behaviors for Active Duty, and the DOD Annual 
Beneficiary Survey, which polls all beneficiary categories. The 1998 
results of the Worldwide Survey of Health Related Behaviors for Active 
Duty will be available in December. The 1997 DOD Annual Beneficiary 
Survey results will be available this summer. Questions include ``have 
you smoked 100 cigarettes in your entire life'', ``do you smoke every 
day'', ``how long since you quit smoking'', ``in the last 12 months has 
a health care professional given you advice on tobacco use cessation or 
avoidance'', ``do you use chewing tobacco.'' The DOD is preparing a 
Report to Congress, in June 1998, on the status of policies and 
programs for tobacco use avoidance.

                          Diabetes Management

    Question. Last year Congress appropriated $4 million for improved 
methods of diabetes detection, prevention, and care. We recommended 
that DoD work with the Veteran's Administration on this research and 
requested a status report by February 15, 1998. Will the Subcommittee 
receive this report on time and what is the overall status of the 
research project?
    Answer. The Department provided the report to the Committee on 
Appropriations, House of Representatives, on February 12, 1998. The 
report explained that the fiscal year 1998 Defense appropriation 
provided $4 million for this effort within the Defense Health Program 
(DHP) account. The Department's fiscal management policy required the 
funds to be reprogrammed from the DHP's health care delivery account 
into a research, development, test and evaluation (RDT&E) account. This 
action properly aligned the funding category with the research effort 
to be performed and also positioned the diabetes research program 
within the DoD organization responsible for oversight of all Defense 
science and technology efforts.
    The funds for diabetes research were reprogrammed into the Army's 
RDT&E account, and the diabetes research program is being executed by 
the U.S. Army Medical Research and Material Command (USAMRMC). The 
USAMRMC currently is reviewing for scientific merit a proposal for a 
coordinated research effort to be performed by Tripler Army Hospital, 
Hawaii; Department of Veterans Affairs facilities in Hawaii and New 
England; and the Joslin Diabetes Center, Boston, MA.

    [Clerk's note.--End of questions submitted by Mr. 
Nethercutt. Questions submitted by Mr. Dicks and the answers 
thereto follow:]

                            TRICARE Program

    Question. As you know, the TRICARE program in my area--Region 11--
has, after a few early bumps, become one of the real shining examples 
of how effective the TRICARE program can be. It is a tribute to the 
outstanding work of the Lead Agent in the Region and the excellent 
partnership they enjoy with six military hospitals and clinics in the 
area. It also demonstrates the benefits of a managed care program 
modeled after civilian managed care standards being managed by the 
military in partnership with civilian contractors.
    At the beginning of the contract enrollment in Region 11, it was 
projected that 49,000 beneficiaries would enroll in TRICARE Prime (the 
HMO option) by the end of the five year contract period. Even though 
that contract is only about halfway through that five year period, 
already 116,000 beneficiaries are enjoying the TRICARE Prime benefit. 
And all the surveys that have been done by the government and the lead 
agent show extremely high beneficiary satisfaction.
    Another goal of the TRICARE program is to maximize the use of the 
government investment in military hospitals and clinics. This has 
occurred in Washington State. The total number of beneficiaries 
enrolled at military hospitals now stands at 84,000, increasing over 
19,000 in the past year alone. This represents 72% of the Prime 
population.
    In short, the TRICARE program in Region 11 is saving taxpayer 
dollars, increasing access to medical care, and continues to improve 
customer satisfaction with military health care. I recognize that there 
are regions in the United States that are not enjoying the same level 
of success that we are experiencing in Region 11, but I would strongly 
urge the Congress and the DoD to see this program through. As I said 
earlier, there were difficulties associated with this program in Region 
11 early-on. But I believe that if we give this program the opportunity 
to work, the result will be a great improvement in the way military 
health care is administered and managed, will provide a higher rate of 
quality health care to the beneficiaries, and will save the Department 
a great deal of money over the long run.
    Can you give the Committee a general overview on how the TRICARE 
program is going nationwide?
    Answer. TRICARE has proven to be an effective model for a regional 
integrated health care delivery system. It has enabled the Department 
to provide better access to high quality care for more of our 
beneficiaries in a more cost-effective manner than the previous health 
care delivery modalities available in the MHS. Enrollment and 
reenrollment in TRICARE Prime continue to be strong, provider network 
turnover is low, and beneficiary satisfaction is generally high. In all 
of the mature managed care regions (health care delivery of over 18 
months), between 60 and 75% of targeted eligible beneficiaries have 
enrolled in TRICARE Prime, including active duty members. We look 
forward to the implementation of TRICARE in Regions 1 and 2/5. As you 
know, we faced challenges when we started work under our earlier 
managed care support contracts, however we overcame the ``growing 
pains,'' and expect to overcome any difficulty that may arise in our 
last two.
    Question. Do you intend to stick with the TRICARE Program in its 
current form in order to give the program an opportunity to work 
nation-wide as well as it is working in Region 11 and other successful 
areas?
    Answer. The successful components of TRICARE will, without 
question, be continued. However, we will be making enhancements to the 
program based on the lessons we have learned since its inception.
    Beneficiaries are very satisfied with the benefit structure and 
increased access they have to high quality providers. These core 
components of the program will not change except to accommodate 
advancements in medicine.
    Physicians have expressed concerns with the current program in its 
administrative aspects which, for the most part, are transparent to our 
service members and their families. Following Vice President Gore's 
lead, the Department will be modifying these administrative aspects to 
encourage the use of ``best commercial practices.'' Our expectation is 
even better access to care for our beneficiaries, reduced 
administrative requirements for providers, simpler administration for 
the Government and TRICARE contractors, and overall better service for 
everyone involved.
    We will not be changing those components of the program that are 
working so well in Region 11. We will be applying the lessons learned 
in Region 11 to the new contracts in an effort to continuously improve 
the quality of services provided through TRICARE.
    Question. Do you have enough money in your budget to successfully 
execute the TRICARE program?
    Answer. The Department's core medical program is adequately funded.

                Uniformed Services Treatment Facilities

    Question. Dr. Martin, you are aware of my long history of support 
for the USTF program. One issue you and I have personally discussed is 
my belief that DoD needs to provide some advance guidance each year to 
give each USTF facility a benchmark number of enrollees they can accept 
in the program with assurances that DoD will reimburse that facility.
    After our conversations in this regard, I was hoping that your 
office would provide that guidance to Pacific Medical Center (PMC) who 
is in my state and is currently conducting an open enrollment season 
for its new health program which begins on April 1. My understanding is 
that this has not yet happened.
    Although open season at PMC is well underway, I am told they would 
still greatly benefit from some guidance from your office.
    Have you made a decision on an enrollment level for Pacific Medical 
Clinics?
    Answer. The Pacific Medical Clinics and the Sisters of Charity 
accepted applications from as many beneficiaries as possible. The 
Department approved funding for everyone electing to enroll with the 
designated provider.
    Question. Why does it seem to take so long for DoD to provide this 
guidance to the USTFs.
    Answer. Both the government and the designated provider agreed upon 
specific terms and conditions. The contract allows the designated 
provider to accept applications from all current enrollees and allows 
for a 10 percent growth limitation per year, subject to availability of 
funds. The Department has not denied enrollment to any applicants of 
the designated providers. All enrollees were enrolled in a timely 
manner.

                            Gulf War Illness

    Question. Where do we stand both on treating those servicemen and 
women afflicted with symptoms associated with Gulf War illness and also 
coming up with a plausible explanation for the illness itself?
    Answer. The structured protocol of the CCEP is used to ensure 
comparability of evaluations and completeness. According to the 
Institute of Medicine, which reviewed the protocol used by DoD in the 
CCEP, ``the CCEP clinical protocol is a thorough, systematic approach 
to the diagnosis of a wide spectrum of diseases.'' A specific medical 
diagnosis or diagnoses can be reached for most patients by using the 
CCEP protocol. Those Gulf War veterans with diagnosed conditions have 
initiated appropriate treatment consistent with contemporary medical 
practice. Those Gulf War veterans with more complex conditions, ill-
defined conditions or symptoms receive additional evaluation and 
supportive care at the larger medical centers.
    The entire ongoing research effort is published in ``A Working Plan 
for Research on Persian Gulf Veterans' Illnesses''. This is a public 
document and contains a list of the projects related to Gulf War health 
issues. The outcomes of the findings from these research efforts are 
widely disseminated for clinicians in the medical literature.

             Life Support for Trauma and Transport (LSTAT)

    Question. Dr. Martin, last year, we added $4 million to the DARPA 
budget to accelerate the development of an innovative, portable 
intensive care system known as Life Support for Trauma and Transport, 
or LSTAT. The LSTAT, with its capability to provide hospital-grade care 
in forward battle areas, is bound to markedly improve your ability to 
handle and save many combat casualties. The development of this project 
has been the result of very effective cooperation between DARPA, the 
Army and industry.
    My colleagues and I are excited about the potential of LSTAT. 
Unfortunately, I have heard that the $4 million Congress authorized and 
appropriated have not yet been released to the Army. I don't understand 
this.
    Would you please check with DDR&E and DARPA to assure this 
subcommittee that the money will be released soon so that we can make 
LSTATs available to forces in the field as early as possible?
    Answer. The reprogramming action, DoD Serial Number FY 98-32 IR, 
was approved for implementation in accordance with established 
reprogramming policy on April 9, 1998. The reprogramming action 
transferred $3.844 million from Research, Development, Test and 
Evaluation, Defense Wide, 98/99 to Research, Development, Test and 
Evaluation, Army 98/99. This realigned funding from the Defense 
Advanced Research Projects Agency (DARPA) to the Army for proper 
execution.
    Question. I understand that the Army and DARPA, along with the Navy 
and Marine Corps have indicated great interest in the LSTAT system. 
Unfortunately, I have not heard how the Air Force regards the system. I 
would appreciate if you would provide for the record, an Air Force 
position on the LSTAT program.
    Answer. The Air Force Medical Service has evaluated the LSTAT and 
determined that it does not have an operational requirement f or this 
device at this time. We plan to provide this capability with patient 
move ment items that have already been approved by the Joint Services 
and programmed for purchase. We are concerned about the weight of this 
device, the volume, and the non-modular configuration. The device 
currently weighs approximately 130 pounds. This will limit the payload 
of some aircraft, require floor-loading in some cases (due to litter 
stanchion weight restrictions), and physically challenge medical 
personnel during litter bearing. The LSTAT's ``one size fits all'' 
configuration would necessitate our purchase of medical equipment 
beyond the requirements of most patients. We will continue to monitor 
the progress of this program to determine if further development of 
this device makes it suitable for Air Force use.

                        Force Health Protection

    Question. Can you give the subcommittee an overview of your efforts 
in the Force Health Protection (FHP) program?
    Answer. The Department is committed to Force Health Protection as a 
better way of protecting the health of our service men and women while 
providing the Nation with a healthy and ready military force. In August 
1997, the Deputy Secretary of Defense signed DoD Directive 6490.2, 
Joint Medical Surveillance, which formed the basis for many elements of 
the Force Health Protection program. The Joint Staff and the Services 
are using the DoD Directive and the accompanying DoD Instruction 
6490.3, Implementation and Application of Joint Medical Surveillance 
for Deployments, to implement these new requirements.
    While the anthrax vaccination program is only one of the 
Department's FHP initiatives, it is an excellent example of our 
commitment to the goal of FHP. The current deployment to Southwest Asia 
provides additional examples of FHP at work during a deployment.
    For both the accelerated program in Southwest Asia and the total 
force program, the anthrax vaccination program has high-level attention 
and oversight within the Office of the Secretary of Defense, the Joint 
Staff, the Services, and the warfighting Commanders in Chief (CINC). 
The Army Vice Chief of Staff is the Executive Agent for implementation 
of the anthrax vaccination program in Southwest Asia.
    The CINC has placed a high priority on successfully implementing 
the vaccine program and other elements of the FHP program. On February 
20, 1998, CENTCOM updated their deployment policy on implementing 
comprehensive joint medical surveillance measures to meet the 
requirements in the DoD directive and instruction. In addition to 
requirements for pre- and post-deployment health assessment 
questionnaires and daily and weekly disease and non-battle injury 
reporting, the CENTCOM policy stresses immunization tracking with 
special focus on the anthrax vaccine. CINC CENTCOM has directed that 
deploying personnel hand-carry their immunization record. Guidance on 
vaccination programs and other force health protection measures for the 
theater are explicit regarding the requirement to document, retain, 
and, if appropriate, archive individual medical information. At the 
CINC's request, joint medical surveillance teams (JMST) have recently 
arrived in the CENTCOM area of responsibility to closely monitor and 
report on compliance with force health protection/surveillance 
initiatives, including the anthrax vaccinations administered in 
theater.
    An interim immunization tracking system (ITS) is in place to meet 
the immunization tracking requirements for the anthrax vaccination 
program. Currently, the Services use different systems to capture and 
retain data locally, but they also transmit a core set of information 
in a standard format to the Defense Enrollment and Eligibility 
Reporting System (DEERS). As individuals redeploy or move from one 
geographic location to another, the interim ITS will allow query of the 
DEERS database to confirm the vaccination status of an individual or 
update the individual service member's immunization record.
    DoD is proceeding with a single, long-term solution to immunization 
tracking. In 1995, the Military Health System (MHS) began development 
of the Preventive Health Care System (PHCS)--a component of the 
Composite Health Care System (CHCS) II. Immunization recording and 
tracking for military members, and all MHS beneficiaries, are essential 
components of PHCS. PHCS will eventually incorporate the capability to 
administer and retain periodic, pre-deployment, and post-deployment 
health assessments, as well as track and individual's preventive health 
care needs.
    Requirements for PHCS were approved in May 1996. Funding for PHCS 
was approved in August 1996. Prototype testing is occurring at MacDill 
Air Force Base, FL, Brooke Army Medical Center, TX, and Naval Hospital, 
Beaufort, SC. Operational testing is planned for fiscal year 1998 with 
worldwide deployment anticipated in fiscal year 1999. PHCS is 
programmed in the fiscal year 99-2003 POM as a part of the Defense 
Health Program: CHCS II Deployment Surveillance Program. For active, 
Reserve, and National Guard activities that may lack a ready electronic 
link to CHCS II, a stand-alone PHCS product is being developed.
    Question. How much money is Health Affairs devoting to this effort?
    Answer. Of the $1 billion requested in the DoD fiscal year 1999 
President's Budget to combat chemical and biological threats, no 
funding has been issued to the Defense Health Program.
    Question. Does funding for the FHP effort come out of the $1 
billion mentioned in the President's defense budget or are FHP efforts 
being funded out of a separate account?
    Answer. Of the $1 billion requested in the DoD FY 1999 President's 
Budget to combat chemical and biological threats, no funding has been 
issued to the Defense Health Program.

                         Dayton Daily Articles

    Question. Dr. Martin, as you know, the Dayton Daily News wrote a 
series of articles chronicling a military medical system that was 
inefficient, lacking in oversight and devoid of even the most basic 
safeguards that protect civilians from medical malpractice.
    One of the most troubling accounts of the lack of quality and 
accountability in the military system is that of Dr. Gary Davis. 
According to the Dayton Articles, Davis, an OB-GYN doctor, has a 
checkered professional history, to say the least. Nonetheless, he 
entered the Navy in 1979 after having his Medical privileges suspended 
by the state of Arkansas. Davis served in the Navy from 1979 to 1981 
and then left for private practice. Between 1983 and 1987, Davis was 
sued five times. Then, in 1987, he entered the Army and went to Ft. 
Benning, GA where he was made the Chief of Obstetrics.
    While Davis was serving in the Army, two states took adverse action 
against him. In 1989, Idaho revoked his medical license and in 1990, 
Alabama suspended his license for 18 months. Despite these actions, 
Davis continued to practice in the Army and, in 1992, was made Chief of 
Obstetrics and Gynecology at Fitzsimons. He was also put in charge of 
training residents.
    At Fitzsimons, Davis vouched for another doctor of questionable 
competence, Dr. Daniel Lim. With Davis' recommendation the 
``credentials committee just looked the other way'' to quote the Dayton 
article and credentialed Lim. Five months after that, Dr. Lim performed 
surgery on a young woman, Leigh Clark, and mistakenly severed an 
artery. Clark was crippled for life but won a $5 million judgement. 
According to the article, Lim left the Army in 1995. Davis however, was 
promoted to full Colonel and transferred to Madigan Army Medical 
Center. He was made Chief of Gynecology and Urogynocology and Director 
of Clinical Investigation.
    Did the Army review Dr. Davis' apparent history of malpractice 
before he entered the Army? Was Dr. Davis truthful about his 
professional history?
    Answer. The standard physician procurement process was used to 
bring Dr. Davis into the Army. This process includes: verifying all 
graduate medical training, verifying that all licenses were 
unrestricted and that at least one license was current, obtaining 
letters of recommendation, obtaining an interview letter from a senior 
OB/GYN physician on active duty, obtaining Officer Evaluation Reports 
from prior military service, obtaining a current curriculum vitae, and 
filling out a health and professional status statement. All of these 
documents and verifications were obtained for Dr. Davis prior to his 
appointment.
    As with any process that relies in part on self-reported 
information, the accession procedures are vulnerable to willful deceit. 
Measures to assure the accuracy of self-reported information, including 
notifying the applicant in writing of the consequences of making false 
official statements are now a part of the accession process. Dr. Davis 
answered in the negative to the question asking if he ever had 
professional privileges denied, withdrawn or restricted by any 
healthcare facility. In fact his privileges had been suspended and 
never restored at Baptist Hospital in Arkansas (1979). On his C.V., he 
accounted for the period of time in 1978 by saying that he did locum 
tenens and a ``brief'' fellowship at the University of Alabama. We now 
know that time was spent on the house staff at the Baptist Hospital 
where his privileges were suspended.
    Although Idaho verified his license as being current and 
unrestricted, we now know that he was under investigation in Idaho at 
the time of accession into the Army Medical Corps. There was no way for 
the Army to have known this at that time since Idaho would not release 
such information until action was completed. As a direct consequence of 
the Army's discoveries regarding Dr. Davis' inaccurate reporting of his 
own professional history, he was placed before an Army ``Show Cause'' 
board. The purpose of a show cause board is to recommend whether or not 
an officer should be retained in the face of certain negative 
performance criteria, which can include substandard performance of 
duty, misconduct, moral or professional dereliction, or actions clearly 
inconsistent with national security. After considering all of the 
evidence in Dr. Davis' case, the board, comprised of and presided over 
by line officers, recommended that Dr. Davis be retained on active 
duty.
    Question. Did the Army review Dr. Davis prior to assigning him to 
Chief of Obstetrics at Fort Benning?
    Answer. In addition to the pre-accession process described in 
above, Dr. Davis' professional competency was reviewed by the 
credentialing and privileging process established at Fort Benning.
    Question. Was Dr. Davis truthful about his professional history?
    Answer. Dr. Davis answered in the negative to the question asking 
if he ever had professional privileges denied, withdrawn or restricted 
by any healthcare facility. In fact, his privileges had been suspended 
and never restored at Baptist Hospital in Arkansas (1979). On his C.V., 
he accounted for the period of time in 1978 by saying that he did locum 
tenens and a ``brief'' fellowship at the University of Alabama. We now 
know that time was spent on the house staff at the Baptist Hospital 
where his privileges were suspended.
    Question. Has the Army reviewed Dr. Davis' professional 
qualifications in light of the Dayton articles ?
    Answer. The Madigan Army Medical Center Credentials Committee has 
fully reviewed Dr. Davis' professional qualifications and competency, 
both in light of the Dayton Daily News articles and as part of regular 
review, and cannot justify any adverse privileging actions. Dr. Davis' 
professional record since entry on active duty is totally devoid of any 
adverse findings.
    Question. How was Dr. Davis able to obtain the rank of full 
Colonel?
    Answer. Dr. Davis was promoted to full Colonel while at Fitzsimons 
Army Medical Center. Given that there is no adverse clinical or 
military information in Dr. Davis' Army file, since his entry into Army 
active duty, withholding a promotion could not be justified.
    Question. How and why was Dr. Davis assigned as Chief of Gynecology 
and Urogynecology at Madigan?
    Answer. Dr. Davis was assigned as the Chief of Gynecology and 
Urogynecology at Madigan Army Medical Center for his experience and 
qualifications in the area of gynecologic and, especially, pelvic floor 
reconstructive surgery. Dr. Davis has done solid research in the area 
of pelvic floor injuries and pelvic floor reconstruction. This research 
is directly related to pelvic floor injuries that are much more common 
in females on active duty in the Army and are especially pertinent to 
women's health in the Army but has much broader general implications in 
the treatment of pelvic floor injuries and their sequelae.

    [Clerk's note: End of questions submitted by Mr. Dicks. 
Questions submitted by Mr. Hefner and the answers thereto 
follow:]
                    Funding for Brain Injury Project
    Question. Admiral, it has come to my attention that there is some 
confusion regarding the funds appropriated for the Defense and Veterans 
Head Injury Program and Violence and Brain Injury Project.
    In fiscal year 1998, Congress appropriated in the DoD bill a total 
of $8 million for these programs for use by the Brain Injury 
Association to conduct brain injury research and to provide services to 
military personnel and civilians and their families. The budget request 
was $7 million and we added a plus up of $1 million.
    I have a couple of questions with regard to this issue.
    First, it was my understanding that the full amount of this was to 
go to the Brain Injury Association. Can you tell me how much of this $8 
million goes to the Brain Injury Association for their work and where 
do the remaining funds go?
    Answer. Of the $8 million appropriated for the Defense and Veterans 
Head Injury Program (DVHIP) and Violence and Brain Injury Project, $2.5 
million was granted to the Brain Injury Association (BIA) on February 
5, 1998 and an additional $308,000 was granted on March 3, 1998. Upon 
receipt of a budget request, the remaining funds will be granted to the 
Henry M. Jackson Foundation Bethesda, Maryland to administer the 
Defense and Veterans Head Injury Program.
    Question. Second, USUHS (Uniformed Services University of the 
Health Sciences) which is the administrator of these programs has 
advised the Brain Injury Association that there will be a delay in 
transferring funds to the Association for this work.
    Answer. The delay in distributing the $8 million to the DVHIP and 
BIA resulted from a delay in receiving the DVHIP budget from the 
Jackson Foundation. However, once USUHS received a provisional budget 
from the Jackson Foundation, the remaining $308,000 was granted to the 
BIA. The BIA submitted a budget to USUHS for $2,807,043 and was granted 
$2,808,000.
    Question. Can you tell me what this delay is and when we might 
expect that all of the 1998 funds will be released to the Brain Injury 
Association for this important work?
    Answer. All of the funds requested by the BIA have been released.

    [Clerk's note: End of questions submitted by Mr. Hefner. 
Questions submitted by Mr. Dixon and the answers thereto 
follow:]
             Life Support for Trauma and Transport (LSTAT)
    Question. I am interested in Air Force's views on the Life Support 
for Trauma and Transport (LSTAT). The Army, Navy, and Marines have 
indicated their strong interest in development of this portable 
intensive care system. But I don't believe the Air Force has clearly 
expressed their views. Could you tell me, or provide for the record, 
the Air Force position on the LSTAT program?
    Answer. The Air Force Medical Service has evaluated the LSTAT and 
determined that it does not have an operational requirement for this 
device at this time. We plan to provide this capability with patient 
movement items that have already been approved by the Joint Services 
and programmed for purchase. We are concerned about the weight of this 
device, the volume, and the non-modular configuration. The device 
currently weighs approximately 130 pounds. This will limit the payload 
of some aircraft, require floorloading in some cases (due to litter 
stanchion weight restrictions), and physically challenge medical 
personnel during litter bearing. The LSTAT's ``one size fits all'' 
configuration would necessitate our purchase of medical equipment 
beyond the requirements of most patients. We will continue to monitor 
the progress of this program to determine if further development of 
this device makes it suitable for Air Force use.

    [Clerk's note: End of questions submitted by Mr. Dixon. 
Questions submitted by Mr. Young and the answers thereto 
follow:]
                    Fiscal Year 1999 Budget Request
    Question. In the past two years, the Congress has added almost 
three-quarters of a billion dollars to the Defense Health Program 
because the Administration underfunded the account. The President's 
Budget Request for Fiscal Year 1999 is $10.1 billion, approximately 
$300 million less than the 1998 appropriation. Dr. Martin, please 
explain why you believe that the budget is fully funded even though 
there is a reduction in the overall funding level from last year.
    Answer. Let me assure you that the Department is committed to a 
fully funded Defense Health Program (DHP). In our regular budget 
process, we made adjustments to make sure the DHP is fully funded, 
however, inflation is a problem and we are working to fix it. As you 
are aware, determining what constitutes full funding is subject to 
assumptions and application of our best estimates of budget factors in 
developing the budget. With this said, the budget request for fiscal 
year 1999 is approximately $300 million less than the fiscal year 1998 
appropriation due to the following: fiscal year 1998 contains a $128 
million congressional increase that is not contained in fiscal year 
1999; there are reduced requirements in fiscal year 1999 attributable 
to a declining beneficiary population based on QDR assumptions; there 
are savings attributable to utilization management efforts, and there 
is a decreased one-time payment in fiscal year 1999 due to CHAMPUS 
buyout for the last Managed Care Support Contracts. I have been assured 
that the DHP will be fully funded as the Congress expects.
    Question. Are you absolutely confident that the President's Request 
for 1999 is fully funded?
    Answer. The Department's core medical program is adequately funded. 
Certain non-patient care areas will have to be constrained but I assure 
you that we will not jeopardize patient care.
    Question. Are there sufficient resources in the budget to guarantee 
that our troops are medically fit for deployment?
    Answer. Yes. This is our priority.
    Question. Are there sufficient resources in the budget to provide 
quality care to the families of these soldiers, sailors, airmen and 
marines?
    Answer. Yes. I am committed to ensuring that patient care is 
adequately funded.
              Medical Inflation (Technology and Intensity)
    Question. The fiscal year 1999 budget does not include adjustments 
for Technology and Intensity (medical inflation based on advancements 
in medical techniques). DoD estimates this to be approximately $50 
million. In addition, the Department's method for calculating inflation 
inconsistent with actual inflation rates for pharmaceuticals. These two 
factors put additional pressure on the Defense Health Program.
    The President's Budget does not include funds for ``Technology and 
Intensity''--that is, medical inflation that can be attributed to 
advancements in technology. Why do you believe adjustments should be 
made to account for this type of inflation?
    Answer. Technology and Intensity has been recognized by GAO, IDA, 
RAND, and in the 1993 White House National Health Care Reform Chart 
Book. These studies have found that Technology and Intensity are 
increasing medical costs significantly above what is to be expected 
from just inflation factors, including medical inflation. The use of 
new medical technology, more effective drugs, and more intensive 
treatments all contribute to real growth in the cost of medical care. 
We are working with the DoD Comptroller on this issue.
    Question. Will you please provide an example of how Technology and 
Intensity impacts military health care?
    Answer. As discussed in the previous question, the Military Health 
System experiences costs above inflation driven by new medical 
technology and increased intensity of treatment, and contribute to real 
growth in the cost of medical care in he Defense Health Program. For 
example, when new drugs or new treatment protocols produce more 
effective clinical outcomes we want our patients to benefit from these 
more effective treatments. However, very often the new drug treatments 
are more expensive than what they replace. For example, Prozac and 
Zoloff become new standard treatments for depression, and we are now 
facing the same pressures as the private sector in providing Viagra to 
help patients suffering from impotence.
    Question. How much funding would be required in fiscal year 1999 to 
account for the inflationary effects of technology?
    Answer. Based on the results of a study conducted by the Institute 
for Defense Analyses (IDA) for the Department, we estimate that the 
impact of advancing medical technology in fiscal year 1999 alone is $49 
million.
    Question. How does inflation affect the purchase of pharmaceutical 
products? Does DoD accurately account for this type of inflation? If 
not, what would be a more accurate means of doing so? What are the 
rates for civilian community?
    Answer. The producer price index reports the 1997 price increases 
for pharmaceuticals was 2.7 percent and is projected to be 4 persent in 
1998. DoD does not accurately account for this type of inflation. 
Medical supplies, including pharmaceutical products, are funded through 
the basic stock fund, which allows for only a single rate of inflation 
set by the Office of Management and Budget (OMB). The OMB allowed rate 
is 1.5 for fiscal year 1998, reducing DoD's pharmaceutical buying power 
by 2.5 percent. A more accurate way to account for inflation of 
pharmaceuticals would be to isolate these products from the basic stock 
fund and apply a unique rate of inflation to the pharmaceutical class 
rather than using the average stock fund-wide rate.
    Question. How much funding would be required in FY 1999 to account 
for the inflationary effect of pharmaceuticals?
    Answer. In the civilian sector, as identified in Drug Topics, 
``Community Practice--Reaching New Heights'', pharmaceutical costs rose 
12 percent in 1997, of which 4.2 percent was for new drugs on the 
market; and 5.4 percent was from increased utilization rates (i.e., 
prescriptions filled). Although our data systems do not provide us with 
the means to capture and report actual experience related to 
utilization rates and the use of new drugs, if we experience rates 
similar to the private sector, we expect to experience overall program 
costs to be greater than the OMB rate.
                   Problems Despite Adequate Funding
    Question. Although the Congress added nearly three-quarters of a 
billion dollars to the Defense Health Program over the past few years, 
there are still many complaints about the system. Many hospital 
commanders complain that they do not have sufficient funds to make 
capital improvements such as repairing facilities or replacing outdated 
equipment. This is in part due to: (1) the outdated nature of the 
military medical infrastructure, and (2) the means by which health care 
is now being delivered. For example, managed care has dramatically 
reduced the length and number of hospital visits (in-patient care). As 
a result, the Services may still be operating many unneeded hospitals 
that require significant funding.
    Although the Congress has added nearly three-quarters of a billion 
dollars to the Defense Health Program, many of us still hear complaints 
that hospitals do not have sufficient resources to replace equipment or 
to make necessary repairs. Is this really a case of not having 
sufficient funds? Or, is it a management issue?
    Answer. The Department's core medical program is adequately funded. 
Certain non-patient care areas will have to be constrained but will not 
jeopardize patient care.
    Question. If money is not the issue, what can be done to fix these 
problems? Are there management issues that need to be addressed?
    Answer. We continue to pursue reengineering opportunities, 
rightsizing where appropriate, and reorganization consistent with the 
QDR and DRI initiatives. We are looking at outsourcing where it makes 
good business sense and consolidating Service functions to reduce 
overhead, such as blood donor centers.
    Question. How do you plan to improve the management of the funds 
you currently have? Do you plan to make additional reductions in the 
number of fixed facilities such as hospitals. Do you plan to make 
reductions in personnel. Do you intend to purchase more care from 
contractors?
    Answer. In fiscal year 1999 we are converting 17 hospitals to 
outpatient clinics. This initiative was begun in fiscal year 1997. In 
concert with delivering quality health care and expanded use of 
ambulatory setting for health care delivery there are circumstances in 
which the best management decision would be to convert some small 
hospitals to comprehensive outpatient clinics. With MCS contractors in 
place, and development of comprehensive networks, the decision to 
convert hospitals to clinics and use the contractors network inpatient 
facilities would minimize both inconvenience and out of pocket costs 
for our beneficiaries. For beneficiaries enrolled in Prime, the out of 
pocket costs for admission, whether in the MTF or contractors network 
hospitals are virtually the same for our beneficiaries. Availability of 
MCS contractors allows MTF commanders an additional management tool.
    Yes, the reduction in eligible beneficiary population allows us to 
reduce DHP personnel. In some areas, where the facilities are being 
``right-sized,'' we will be purchasing healthcare through civilian 
contractors.
    Question. How will the implementation of managed care affect the 
requirements for fixed medical facilities and other infrastructure 
investments? Will it help to free up resources?
    Answer. Implementation of managed care in our direct care 
facilities will allow the military services to provide health care in a 
more timely manner, to improve overall continuity of care by assigning 
a primary care manager to coordinate the health care needs of the 
enrollees, and to better use resources in a resource-constrained 
environment. Managed care will also shift care from an in-patient focus 
to more outpatient services. The impact on fixed medical facilities and 
infrastructure is hard to immediately ascertain. The need for military 
medical facilities, support infrastructure, and force structure are 
largely in place to support our readiness mission. Therefore, we must 
be cautious when we look at any right-sizing initiative. We must manage 
care and provide services in an efficient manner in order to support 
our direct patient care levels given our funding levels.
    The care provided by Managed Care Support (MCS) contractors augment 
care provided in Military Treatment Facilities (MTF) and should have no 
impact on the level of MTF capacity. Instead, managed care offers 
better ways to utilize existing resources both within and without the 
MTF. The implementation of managed care has created a number of 
opportunities to optimize the use of fixed medical facilities and avoid 
costs throughout the Military Health System.
    In concert with delivery quality health care and expanded use of 
ambulatory setting for health care delivery there are circumstances in 
which the best management decision would be to convert some small 
hospitals to comprehensive outpatient clinics. With MCS contractors in 
place, and development of comprehensive networks, the decision to 
convert hospitals to clinics and use the contractors network inpatient 
facilities would minimize both inconvenience and out of pocket costs 
for our beneficiaries. For beneficiaries enrolled in Prime, the out of 
pocket costs for admission, whether in the MTF or contractors network 
hospitals are virtually the same for our beneficiaries. Availability of 
MCS contractors allow MTF commanders an additional management tool.
                     New Initiatives in the Budget
    Question. Although the (ASD/HA) has suggested that he will improve 
health care quality, there seems to be little correlation between the 
budget and his plan to correct problems. (The improvement of automated 
systems is one exception.)
    Full implementation of TRICARE should alleviate some of the access 
and cost problems in the system. However, are there any new initiatives 
in the budget to address issues of quality of care? If so, please 
provide a few examples.
    Answer. The ``special'' product line studies are an integral part 
of the external review component of the NQMP. For the past 3 years, 
DoD(HA) has contracted for special quality studies under the National 
Quality Monitoring Program (NQMP). These studies have received national 
recognition by the Joint Commission for Accreditation of Healthcare 
Organizations (JCAHO) as leading the healthcare industry in outcomes 
research. The studies, conducted under civilian contract, examine six 
product lines (birth, cardiovascular, pediatric asthma, diabetes, 
orthopedics and mental health). Interventions patients receive during 
the course of treatment are examined in terms of the outcomes (or 
results) generated. Best practices are identified and promulgated to 
the field by means of the ``Quality Management Reviews''.
    In 1997 JCAHO added a new facility accreditation requirement called 
``ORYX'' which requires facilities to use patient outcomes as a part of 
their quality improvement program and that the data be submitted to 
JCAHO on a quarterly basis for tracking and trending. (In-patient data 
collection begins in July of 1998. The JCAHO time table is for 
outpatient data collection to begin sometime in 1999). In December 1997 
DoD(HA) decided to address the ORYX requirement from an MHS corporate 
perspective by using the processes already in place from the NQMP 
``special studies'' program to address the ORYX requirement.
    We have requested funding in the fiscal year 1999 budget to 
include:
          A $2.26 million plus-up of the funding allocated to 
        the NQMP expanding the current work to cover DoD's ambulatory 
        care facilities under the ORYX program. This will also include 
        funding and maintenance of an MHS provider website that will 
        serve as an information dissemination point and educational 
        forum to enhance awareness of the NQMP special studies/ORYX 
        program.
          $0.25 million to initiate an education program 
        utilizing the expertise of select members of the USUHS faculty 
        to provide education to healthcare providers at the (Major/
        LTCol) MTF clinical service chief level. A combination of 
        workshops and consultation services would help practicing 
        physicians to better understand the data generated by the NQMP 
        special studies and how to use ``best practices'' to improve 
        patient outcomes in the clinic or at the bedside.
          $0.5 million to fund a semi-annual Medical Director's 
        Conference. This conference would bring together DoD medical 
        directors from the 14 TRICARE regions, the medical directors 
        for the managed care support contract (MCSC) and the personnel 
        at OASD/HA(TMA) who are responsible for the oversight of 
        quality management and medical standards. The goals of this 
        conference are to: increase communication and efficiency of the 
        medical leadership, identify opportunities to improve the 
        delivery of medical care, and recommend changes in the TRICARE 
        medical benefit, as needed.
    Question. Are there any new initiatives in the budget to address 
issues of recruiting and retention of providers?
    Army Answer. The question seems to be based on a lack of identified 
budget items to support the question programs in the Office of the 
Secretary of Defense for Health Affairs (ASD/HA) submission. While 
these items are within the Program Operating Memorandum (POM) of ASD/
HA, in the budget year, these dollars are transferred to the services 
and become a part of the Total Obligation Authority (TOA) of the 
appropriate service. Therefore, it would be inappropriate for the 
dollars to support these programs to be within the ASD/HA budget. The 
notable exception to this is the dollars to support the payments of 
tuition, books and fees for those individuals enrolled in the Health 
Professions Scholarship Program (HPSP).
    Currently, there are multiple recruiting incentive programs in 
place. At the present time all of these programs seem to be adequately 
funded to meet the current accession needs.
    Nurse Corps Recruitment Bonus--This bonus of $5,000 is paid to 
Nurse Anesthesia Recruits and Family Nurse Practitioners who opt to 
accept a four-year active duty service obligation rather than a three-
year obligation.
    Dental Corps Accession Bonus--This bonus of $30,000 is paid to 
Dental officers who join the force with a four-year active duty service 
obligation. This program was begun in fiscal year 1996 and has proven 
to be a valuable tool. The current statutory authority for this program 
expires in fiscal year 2002. By that time, we are hopeful that our 
efforts to increase Health Profession Scholarship Program allocations 
utilized by the Dental Corps will be successful and that program will 
become the basis to meet future recruitment needs.
    Health Professions Loan Repayment Program--This program was 
provided to us by the fiscal year 1997 National Defense Authorization 
Act. It provides for the repayment of loans utilized for professional 
education. It provided for $22,000 per year of incurred obligation to a 
maximum of four years. Our House experience with this program is 
limited to date, but we are optimistic that it will assist us. If there 
is a ``downside'' to this program, it is the fact that it is funded 
with monies which are available as a result of unexecuted Health 
Professions Scholarship Program allocations. One program has to be less 
than successful for this program to succeed. As we gain experience with 
this program we are initially limiting it to the recruitment of Dental 
officers.
    The following economic incentives are in place to assist us in the 
recruitment of reserve component health professionals:
    Education Loan Repayment Program: Health Professions Officers 
Serving in Selected Reserve with Wartime Critical Medical Skill 
Shortages (10 U.S.C., Sec. 16302). The loan repayment currently pays 
$3,000 per year up to a max of $20,000 to certain shortage specialties 
for service in the Selected Reserve. Amounts have not kept up with the 
costs of schooling. The dollar amount should be increased so that it 
actually means something to a physician or dentist with many times that 
amount in loans. Suggested change is $20,000 per year to a lifetime max 
of $50,000 also needing a change in language is the requirement that a 
person be fully qualified in his specialty to be eligible. We would 
like the law to allow participation by someone in training as well.
    Special Pay: The ``Selected Reserve Health Care Professionals in 
Critically Short Wartime Specialties program'' (37 USC, Sec. 302g), is 
currently being used as an accession program wherein practicing 
physicians and other healthcare professionals receive up to $10,000 per 
year for a maximum of three years for participation in the Selected 
Reserve. This incentive is no longer appropriate given the increased 
chance of mobilization today. Active Component uses a tiered Multiyear 
Special Pay (MSP) for retention of certain health professionals. The 
law allows this reserve program to be used in a similar fashion and the 
Reserve Components would like to work toward that end.
    Financial Assistance: Health Care Professionals in Reserve 
Components program (10 USC, Sec. 16201). The Financial Assistant 
Program pays a stipend ($10,000/yr) to interns, residents, and some 
others in certain critical shortage specialties in return for future 
two-for-one obligation to the Selected Reserve. This program could be 
the best recruiting tool available to the Reserve Components by 
modifying the law to allow physician and dental students to participate 
(similar to the Active Component HPSP (10 USC, Sec. 2121). Also, 
currently the obligation is based on full years of participation. The 
program should be changed to allow six-month increments similar to 
several of the Active Component counterpart programs.
    Another one of the invaluable tools assisting recruitment is the 
educational opportunities offered. In addition to attracting high 
quality applicants, graduates of the various programs have incurred an 
active duty service obligation which provides a level of stability to 
the force as a whole. Currently the following educational programs are 
being utilized to attract high quality individuals into military 
service:
    Health Professions Scholarship Program--This program provides the 
bedrock levels of accessions into various health disciplines. Currently 
we are utilizing HPSP allocations to support entry level training for 
physicians, dentists, veterinarians, nurse anesthetists, optometrists, 
and clinical psychiatrists. There is adequate funding to support the 
Defense Health Program portion of this program. We continue to work 
within the Army to obtain the commensurate level of funding from the 
Reserve Personnel Army account needed to support the level of 
scholarships we require. These dollars are currently contained within 
the fiscal year 00-05 POM and any funding shortfall should be resolved 
upon completion of that process.
    Financial Assistance Program--This program enables us to 
``subsidize'' individuals undergoing specialty level training within 
civilian institutions. At the present time, this program is being 
utilized to recruit physicians and dentists in specialties which 
directly affect force readiness.
    Enlisted Commissioning Program--Enlisted members already on active 
duty may compete for this program. It is designed for individuals who 
can complete a Bachelor of Science in Nursing within two years. Upon 
completion of the academic requirements and licensure by the 
appropriate state, the individual is commissioned into the Nurse Corps. 
We find this to be an extremely popular program providing excellent 
upward mobility to outstanding enlisted soldiers.
    Physician Assistant Training Program--This is another in service 
training program which provides us with highly trained health care 
providers. Currently, sixty active duty individuals are selected to 
undergo this two year, tri-service course. We have in the past counted 
on this source to provide one hundred per cent of our requirements. In 
fiscal year 1999 we will attempt to directly recruit physician 
assistants. Our success in this venture, without any additional 
economic incentives, will determine if additional measures are required 
to insure the force structure required in this critical readiness 
specialty is maintainable.
    In addition to the specific programs mentioned above we are also 
offering in service training programs for our Physical Therapists, 
Podiatrists, Pharmacists, and Dietitians. These training programs 
remain fully funded and are extremely effective in both recruitment and 
retention of these specialties. The Special Pay programs play a key 
role in the retention of our medical force. The yearly rates offered to 
individuals who meet the established criteria are established by ASDH/A 
to insure parity across the services.
    Currently there are five Medical Corps Specialty pays authorized 
for payment under Title 37, USC These are:
          Variable Specialty Pay
          Board Certification Pay
          Medical Additional Specialty Pay
          Incentive Special Pay
          Multi-Year Special Pay
    These pays obviously increase the economic incentive for our 
physician force to remain on active duty. The yearly adjustment of 
these rates by OSD (HA) to maintain parity among the services is a 
critical link in the entire retention process. Non Physician Health 
Care Provider Board Certification Pay is provided to non physician 
clinical specialties who have demonstrated clinical excellence by 
virtue of becoming Board Certified in their particular area of 
expertise. Again, this economic incentive aids in the retention of our 
clinical specialists.
    Dental Officer currently receives three types of Special Pays. They 
are:
          Variable Special Pay
          Dental Additional Special Pay
          Board Certification Pay
    Additionally, the fiscal year 1998 National Defense Authorization 
Act has authorized the Dental Officer Multi Year Retention Bonus. 
Currently, we are working within the service process to insure funding 
is available to support this new initiative. Once funding is obtained, 
we are confident that this will assist us in the retention of our 
future dental leadership.
    Navy Answer. No. There are no new initiatives in the fiscal year 
1999 budget addressing issues of recruiting and retention of providers.
    Air Force Answer.
Medical Specialties
    Recruiting: We annually recruit approximately 700 medical officers 
for all five Corps. Recruiting comprises about half of all medical 
accessions. The remainder come from sponsored sources (Health 
Professions Scholarship Program--HPSP, Financial Assistant Program--
FAP, Uniformed Services University of the Health Sciences--USUHS, AF 
Academy--AFA, and ROTC), Line/Service Transfers, and Enlisted 
Commissions. We selectively use scholarship programs to sponsor future 
accessions for specialties we anticipate will be difficult for 
recruiting to attain. A possible resolution appears imminent concerning 
the taxation status of the HPSP benefit. The Internal Revenue Service 
(IRS) and DoD propose the benefit be legislated in a non-taxable 
status. This will provide the full benefit to HPSP participants and 
enhance the value to prospective candidates. Additionally, accession 
bonuses have assisted recruiting with meeting their goals for nurses 
and dentists.
    Retention: There are no specific ``retention goals'' per se, but we 
do have annual losses which are compensated by annual accessions. The 
sponsored scholarships mentioned above produce a ``pipeline'' of 
expected specialty accessions for future years. As those years 
approach, and if losses or gains become misaligned, then recruiting is 
the tool we use to effect immediate staffing improvement. Over the 
years, the annual losses have become stable and predictable, thus 
balanced with programmed sponsored accessions along with recruiting 
goals. Also, Incentive Special Pays (ISP) have remedied certain 
staffing shortfalls by increasing retention (for example, increasing 
ISP for Certified Registered Nurse Anesthetists (CRNAs) eliminated a 
shortage of 30 USAF CRNAs to the point where we reduced our sponsorship 
of HPSP scholarships). Moreover, recent changes in dental special pays 
(which had not changed since fiscal year 1981) along with 
implementation of the new Multi-year Special Pay (MSP) will certainly 
strengthen retention for dentists. Continuation of these special pays 
is imperative for continued success.
Dental Specialties
    Recruiting: The new $30,000 dental accession bonus is an incentive 
to motivate new accessions to enter for four years vice three. 
Additionally, we increased our level of Health Professions Scholarships 
for dentists to sponsor high quality candidates in dental school which 
relieves some of the burden from Recruiting Services.
    Retention: Existing special pays for dental officers have increased 
for the first time since 1981. The increases affected both junior and 
senior officers, and is expected to improve retention noticeably. 
Additionally, the new Multi-Year Special Pay (MSP) will enhance 
retention. It will offer an incentive for dental officers to remain on 
active duty for contractual periods ranging from two to four years. The 
amounts will vary by specialty and length of the contractual 
obligation. Furthermore, active duty Graduate Medical Education offers 
advanced dental training (often in active duty programs) for general 
dentists to become specialists. This is also a retention tool as 
dentists become trained in a specialty and incur a training obligation. 
Finally, board certification pay offers incentives to advance their 
personal standing in the dental profession.
    Quality of Care. In terms of quality care, the Air Force has many 
ongoing efforts. The Air Force continues its focus on the expansion of 
TRICARE, are conducting Preventive Health Assessments (PHAs) on all 
active duty personnel with the focus of maintaining a healthy and fit 
active duty force, and constructed Health And Wellness Centers (HAWCs) 
with exercise physiologists at all Air Force installations. 
Additionally, in the spirit of building healthy communities, within our 
Preventive Health Care System (PHCS), we implemented various preventive 
initiatives such as Put Prevention into Practice (PPIP) and Health 
Evaluation Assessment Reviews (HEARs).
    Question. Is there sufficient scholarship funding?
    Navy Answer. The status of scholarship funding impacting Navy 
Medicine's recruitment and retention of providers is as follows:
    The Armed Forces Health Professions Scholarship Program (AFHPSP) is 
adequately funded to meet Navy needs. OASD (HA)'s 13 points on quality 
of health care which includes the GMO Replacement Program were not 
included in the fiscal year 1999 Budget. Inclusion would drive 
budgetary requirements higher for the Financial Assistance Program and 
the Armed Forces Health Professions Load Repayment Program.
    Question. Is there adequate incentive pay?
    Navy Answer.
                             medical corps
    Market competition is important when considering physician 
recruiting and retention. One competitive factor is pay. Military 
physicians receive incentive pay (ISP) designed to reduce the gap 
between military and civilian average pay. Data regarding civilian 
average pay is collected annually for DoD by the Hay Group, and is used 
to establish incentive pay rates. Despite ISP there is a residual 
military-civilian pay gap especially in surgical specialties. It is 
believed that these pay differences are a major factor affecting 
recruiting and retention for surgical specialties. Examples of 
military/civilian pay gap for three key specialties:

----------------------------------------------------------------------------------------------------------------
                                                                    Average USN       Average
                                                                       pay*        civilian pay*  Gap  (percent)
----------------------------------------------------------------------------------------------------------------
Family Practice.................................................        $109,055        $128,400              15
General Surgery.................................................         127,494         195,000              35
Orthopedic Surgery..............................................         141,359         271,100             48
----------------------------------------------------------------------------------------------------------------
* Fiscal year 1997 data, Hay Group survey for civilian pay and Office Assistant Secretary of Defense (Health
  Affairs) (OASD) (HA)) for Navy pay.

    Physician special pay are capped by statute. The result is a 
gradual increase in the military/civilian pay gap:

----------------------------------------------------------------------------------------------------------------
                                                                      Average         Average
                              Year                                   civilian         million      Gap (percent)
                                                                  physician pay*  physician pay*
----------------------------------------------------------------------------------------------------------------
1993............................................................        $153,275        $115,733              32
1994............................................................         164,332         115,573              42
1995............................................................         167,382         117,046              43
1996............................................................         176,913         118,571              49
1997............................................................         178,369         121,219             47
----------------------------------------------------------------------------------------------------------------
* Derived from fiscal year 1997 data, Hay Group survey for civilian pay and OASD(HA) for military pay.

                              DENTAL CORPS
    Special pays for Dental Corps officers have been addressed through 
legislation in fiscal year 1997 and fiscal year 1998. Fiscal year 1998 
legislation was passed authorizing a multi-year retention bonus for 
dental officers, however appropriations were not granted to support 
this program. An evaluation of the impact of these programs can only be 
made after a fully funded multi-year retention bonus is implemented. 
Retention trends can then be identified and verification of their 
success evaluated.
                         MEDICAL SERVICE CORPS
    Existing incentive special pay/special pay for non-physician 
providers programs are adequate and have been very successful in 
helping to achieve Medical Service Corps officer retention goals.
                              NURSE CORPS
    Existing incentive special pay/special pay for non-physician 
providers programs are adequate and have been very successful in 
helping to achieve Nurse Corps officer retention goals.
    Question. Would additional resources help in recruiting and 
retaining well-qualified physicians, nurses and technical staff?
    Navy Answer.
                             MEDICAL CORPS
    Additional resources directed toward physician special pays and 
toward the Financial Assistance and Loan Repayment programs would help 
to both retain and recruit physicians.
                              DENTAL CORPS
    Scholarships, other financial incentives, and various recruiting 
initiatives seemed to have cured the Dental Corps accession problem 
(Table 1). What remains unclear at this point is the effect the non-
funded multi-year retention bonus will have on current active duty 
personnel and those seeking military service. Although the Navy Dental 
Corps has appeared to stabilize, without a fully funded retention 
program current status may change.

                                 Table 1
------------------------------------------------------------------------
                                             Fiscal year--
                             -------------------------------------------
                                 1995       1996       1997       1998
------------------------------------------------------------------------
Billets.....................      1,491      1,419      1,414      1,395
End-Strength................      1,403      1,332      1.331      1,384
Shortage....................        -88        -87        -83      *-11
------------------------------------------------------------------------
* Projection assuming Navy Recruiting Command obtains goal.

                         MEDICAL SERVICE CORPS
    The Medical Service Corps is presently meeting recruiting goals for 
non-physician providers. Additional resources for recruitment/retention 
purposes are currently unnecessary.
                              NURSE CORPS
    Additional resources for recruitment/retention of Nurse Corps 
Officers are not required at this time.
    The Nurse Corps is meeting recruiting goals for generalists. Use of 
the nurse accession bonus and the Nurse Candidate Program funding have 
been invaluable in achieving these goals, along with use of diverse 
accessioning sources such as the Naval Reserve Officer Training Corps 
(NROTC), the Nurse Candidate Program and the Medical Enlisted 
Commissioning Program.
    Specialty end strength goals in fiscal year 1997 were met through 
service programs, rather than recruiting, which has been historically 
unsuccessful in procuring specialists. Overall manning of nurse 
specialists is at 96 percent.
    Question. Are there new initiatives in the area of information 
systems and automation? Please provide examples.
    OSD Answer. New initiatives underway include Force Health 
Protection, Personal Information Carrier (PIC), Computer-based Patient 
Record (CPR), Government Computer-based Patient Record (G-CPR), and 
data standardization.
    Force Health Protection. On 8 November 1997, President Clinton 
directed the Departments of Defense and Veterans Affairs to create a 
Force Health Protection (FHP) Program in response to Persian Gulf War 
illnesses. FHP was subsequently mandated in Public Law 105-85. Under 
this initiative, every military service member will have a 
comprehensive, life-long medical record of all illnesses and injuries 
they suffer, the care and inoculations they receive, and their exposure 
to different hazards. This record will help prevent illness and injury, 
and identify and cure those that occur. FHP will help ensure accurate 
immunization tracking, preventative health evaluation and pre/post 
deployment surveillance.
    A Personal Information Carrier (PIC) was identified as the 
mechanism (in concert with the CPR) for implementing FHP. This is an 
electronic device that stores information about the person who carries 
it. It will play a significant role along the entire medical 
operational continuum by capturing appropriate medical care both in the 
peace time and theater environments.
    The Computer-based Patient Record (CPR) is essential for capturing, 
maintaining, and providing patient information at any time and at any 
location over the period the patient is a military beneficiary. The CPR 
will support the medical readiness of military forces with seamless 
information management and communications capabilities for the 
transmission and exchange of data between the theater of operations, 
the sustaining base, and/or the continental United States. Also, it 
will promote quality managed health care and capitalize on 
technological advances that will increase interoperability with other 
MHS systems. Our approach to the CPR is designed to provide the maximum 
flexibility to address new requirements as they surface and to 
incorporate new technology as it becomes available.
    The Government Computer-based Patient Record (G-CPR) effort is a 
collaboration among the MHS, the Department of Veterans Affairs, the 
Indian Health Service, and the Louisiana State University Medical 
Center (LSUMC) to create a comprehensive CPR. These four Partners share 
the common goal of developing the means to electronically share 
information and have a positive impact on the health status of every 
patient by improving the quality of care offered through improved 
clinical data availability. The product of the Partnership will be the 
Government Computer-based Patient Record (G-CPR). The diagram below 
shows the proposed G-CPR conceptual model.

              [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]




    At present, the Partners plan to jointly fund the core activity of 
defining a Lexicon, a common data model, event triggers, communications 
standards/processes, and security rules/standards/processes. Each 
Partner will then be responsible to fund, deploy, operate, and maintain 
its own Central Data Repository (CFR) and hardware and software 
Applications.
    Data standardization supports the reuse and sharing of data and 
eliminates duplication of costs. It also eliminates establishing and 
maintaining separate databases. The MHS is now establishing both Tri-
Service and global standards that will be the basis for the data 
contained in the G-CPR. We are collaborating with industry to use 
established and industry accepted standard sets and complying with the 
Health Insurance Portability and Accountability Act of 1996 (HIPAA).
    Army Answer. The new initiatives in information systems and 
automation are being conducted as joint DoD efforts. These joint 
initiatives include the Personal Information Carrier (PIC), the 
Preventive Health Care System (PHCS), and the Government Computer-Based 
Patient Record (G-CPR), all of which will contribute to the 
satisfaction of the requirement for the Force Health Protection 
mandated in Public Law 105-85.
    The Service-unique processes are only those necessary to implement 
the joint applications within the unique Service structures or those 
necessary for unique command and control functions. For the U.S. Army, 
these initiatives include the Medical Communications for Combat 
Casualty Care (MC4) which will provide the necessary interfacing 
infrastructure needed to field the joint medical applications within 
the Army deployable units and the Medical Situation Awareness and 
Control System (MSAC), which will provide the medical command and 
control functions in a deployed environment.
    Navy Answer. Yes, there are new initiatives in the area of 
information systems and automation. These initiatives include business 
process reengineering affecting the way in which Information 
Management/Information Technology (IM/IT) is delivered, as well as 
developing the technology which will support the Force Health 
Protection Immunization Tracking System, Personnel Information Carrier 
(PIC), and the Government Computerized Patient Record (GCPR).
    Regarding business process reengineering, OASD(HA) and the Service 
Surgeons General authorized a plan for consolidation of the Military 
Health System (MHS) IT execution functions to improve the efficiency 
and effectiveness of the program. In addition, the Bureau of Medicine 
and Surgery has requested that the Commercial Activities study for IM/
IT be canceled in favor of the planned consolidation and is actively 
engaged in supporting line Navy's efforts towards regionalization. Navy 
Medicine has also actively supported implementation of an immunization 
tracking system which accounts for the administration of the Anthrax 
vaccine to our active duty personnel.
    As the Executive Agent for the Clinical Business Area, Navy 
Medicine has been the service lead in creating a collaborative 
partnership with the Department of Veterans Affairs, Louisiana State 
University Medical Center, and the Indian Health Service to 
appropriately share clinical information via a comprehensive lifelong 
medical record and developing a program which will provide personnel 
with a PIC. The PIC will be carried by our soldiers, airman, sailors 
and marines and enables medical personnel to access, input, and update 
medical information; thereby enhancing the care and treatment of our 
active duty personnel in the field and shipboard environment.
    Air Force Answer. The AFMS plans to deploy the Medical Readiness 
Decision Support System (MRDSS) to all AFMS medical treatment 
facilities. MRDSS is a decision support system for MAJACOM and HQAF 
readiness planners and War Reserve Materiel (WRM) Managers. The goal is 
to provide AF wide visibility of all Unit Type Code's (UTC's) and WRM 
project codes for both deliberate and crisis action planning. This 
system solves the inability to conduct program assessment of medical 
``weapon systems'' i.e. global aeromedical evacuation system. Currently 
there is no global visibility of wartime assets and assemblages which 
means there is an inability to develop capability based resourcing 
plans. This program allows line item level visibility of all Total 
Force UTC assets: people and training, supplies and equipment, and POC 
information for unit personnel. It matches assets against Time Phased 
Force Deployment Data taskings. It provides the capabilities to build 
WRM spend plans based on desired/required capability and to rapidly 
locate assets within the worldwide Air Force UTC inventory. The system 
also assists in developing readiness reports and assessments, tracking 
deployments, and eases reporting requirements at the unit level.
    Another initiative is the leasing of IM/IT assets. HA Policy Letter 
98-002, Military Health System (MHS) Information Technology Leasing 
Policy, dated 12 Nov 98, states that the MHS will lease its IM/IT 
assets (hardware, software, peripherals, and limited service) for non-
combat units. The Service Chief Information Officers will be 
responsible for strategic implementation of this policy. The MHS will 
use best leasing business practices from the commercial sector, such as 
the centralization of leasing activities and enterprise-wide lease 
order bundling, to generate volume discounts on all IM/IT leases. 
Leasing is expected to be a cost-effective method for long-term 
management of MHS IM/IT assets and capital expenditures. It will 
provide the MHS enterprise with predictable IM/IT funding forecasts, 
while simultaneously increasing the quality, quantity, and speed with 
which we can moderate the footprint of critical IM/IT products and 
services throughout the military medical community. Leasing will 
provide the MHS with more timely, orderly, cost-effective, and risk-
free technology refreshments, mitigating the technology obsolescence 
risks we currently face in a number of areas. Finally, leasing will 
allow us to consolidate the acquisition of IM/IT products and services 
such as asset management and maintenance at a cost-effective price. To 
this end, the AFMS is developing a centralized plan for the leasing of 
End User Devices.
       Uniformed Services University for Health Sciences (USUHS)
    Question. The budget provides $55.7 million for the continued 
operation of USUHS. The Defense Reform Initiative (DRI) proposes to 
transfer operational responsibility from Office of the Secretary of 
Defense to the Navy.
    Is the Uniformed Services University for Health Sciences (USUHS) 
funded in 1999?
    Answer. Yes. DoD planned funding for USUHS in FY 1999 is as 
follows:

                                                                  ($000)

O&M...........................................................   $55,760
RDT&E.........................................................     2,173

    Question. What about funding in future years?
    Answer. We will program for sufficient outyear funds to properly 
operate and support the University.
    Question. How will this contribute to the readiness of the troops, 
the retention of physicians and the quality of care?
    Answer. USUHS programs in the School of Medicine and the Graduate 
School of Nursing are specifically designed to effect improved delivery 
of medical care, and thus improved readiness, of the nations' military 
service members.
    USUHS provides the best trained new military physicians to the 
armed forces. This outcome is the result of a four year immersion in 
military life while in medical school, and of the integration of at 
least an additional 20 weeks of specific military medical subjects and 
participation in a variety of increasingly challenging military medical 
practical experiences in the field. This USUHS curriculum provides 
education and experience not found in other medical schools, in 
militarily relevant subjects such as Tropical Medicine, Preventive 
Medicine, Emergency Medicine, Behavioral Medicine, Public Health, and 
Military Medical Leadership. USUHS graduates contribute to the 
readiness of the troops because they are a product of the only four 
year professional medical education that is consistently related to the 
military population served, and to the war and peace time environments 
in which they serve.
    USUHS also delivers numerous other medical readiness related 
services (i.e., Continuing Health Education, and the planned 
implementation of Distance Learning), to the community of U.S. military 
health professionals throughout the world.
    The quality of medical care in the three major military hospitals 
in the Washington area is enhanced and enriched by thousands of hours 
of patient care and consultation provided each year by teacher-
physicians from twelve USUHS academic departments. The same expert 
faculty provides patient care consultation to military treatment 
facilities throughout the world.
    Research activities at USUHS are guided by military relevancy, 
hence the quality of medical care and the readiness of troops are 
enhanced by USUHS research efforts to predict, prevent or treat 
infectious diseases such as malaria and hepatitis, as well as efforts 
to improve blood preservation, treat nerve injury, improve wound 
healing and treat brain injury. USUHS research contributes to military 
readiness through improved care for combat injuries, thus facilitating 
the return of duty of ill and injured service members.
    Regarding retention of physicians, more than 2,200 of the 2,470 
graduates of USUHS are still on active duty; they comprise 17 percent 
of all military physicians, thus ensuring continuity of military 
medicine, and have demonstrated their long term value by 
extraordinarily high selection rates for promotion to Colonel (or 
Captain, USN) and appointment to leadership positions throughout the 
Military Health System.
    Question. Does the budget propose any change in the operation of 
USUHS? How will that improve the administration of USUHS?
    Answer. We are committed to continue funding the University at 
levels sufficient to support both full operations and the student load.
    In the area of governance of USUHS, the Secretary of Defense 
determined in the fiscal year 1998 Defense Reform Initiative the USUHS 
should remain open and come under the collective oversight of the 
Surgeons General of the Army, Navy and Air Force. Furthermore, the 
Surgeon General of the Navy was established as Executive Agent for 
programming, budgeting and funding execution activities for USUHS. This 
places USUHS in a position to be directly responsive to the 
requirements of the Surgeons General.
    Question. What is the current level of DoD spending on Medicare-
eligible retirees? How have you calculated this figure? Are you 
confident of its accuracy?
    Answer. The estimated current level of effort for demonstration 
sites has not been established. This calculation is a demonstration-
specific approximation of what the DoD spent for the care of our 
beneficiaries who are eligible for care under both the military health 
system and Medicare program (dual eligible). The estimated total 
expenses for our dual eligible beneficiaries must also be adjusted for 
non-medicare covered services. The accuracy of these estimates will be 
examined separately by the General Accounting Office as an important 
component of the demonstration evaluation.
    Question. What do you estimate that the cost of Medicare Subvention 
would be if offered to all Medicare-eligible retirees? More than 
current level of spending? Less than the current level of effort?
    Answer. The purpose of the six site demonstration is to address the 
issue of whether DoD and Medicare can implement a cost-effective 
alternative for delivering accessible and quality care to our dual 
eligible beneficiaries. The answer to this question will become more 
clear as the demonstration proceeds and health services begin early in 
the next fiscal year.
    Question. What would be the impact of the deficit if you have 
underestimated your current level of spending? Will direct spending 
increase?
    Answer. We have not determined the full impact of underestimating 
the Level of Effort (LOE). We are devoting significant efforts to 
ensure the accuracy of our LOE. We remain committed to making the most 
of our scarce medical resources and enhancing the quality of health 
services to all eligible beneficiaries.

                             Accreditation

    Question. The Joint Commission for Accreditation of Health 
Organizations (JCAHO) is the leading accrediting body in the world. 
JCAHO accreditation is recognized as a ``seal of approval'' and 
provides a level of assurance that quality standards are being 
attained. In 1996 JCAHO surveyed 16 military hospitals and identified 
five specific problem areas:
          1. Medication Use--that safe prescribing, dispensing and 
        administration of medications;
          2. Competence--assessing the competence of hospital and 
        clinic staff;
          3. Management of the Environment of Care--the condition of 
        hospitals, equipment and processes used to ensure a safe and 
        effective environment of care;
          4. Patient Data and information--effective and accurate 
        record keeping of patient data, and
          5. Special Treatment Procedures--the use of restraint and 
        seclusion.
    In 1996 JCAHO identified several areas where military hospitals did 
not score well. One of these areas was Medication Use, that is the safe 
prescribing, dispensing and administration of medication to patients. 
Exactly which hospitals were deficient in this area?
    Army Answer. The hospitals which were found deficient in this area 
were:
    (1) Womack Army Medical Center, Ft. Bragg, NC--Received One Type I 
and II Supplemental Recommendations in this area. The Type I 
Recommendation (TX3.5) identified medications the organization policy 
indicated to be maintained in a container with two locks were 
maintained in a container with only one lock. Supplemental 
Recommendation (TX3.4) requires that Chemotherapy Fume Hoods be 
certified on an annual basis by an approved agency. The last 
certification was more than one year old. Supplemental Recommendation 
(TX3.5.5) requires that a system be developed to check the breakaway 
locks on emergency medicine containers on a daily basis. Some of the 
locks were not checked on a daily basis.
    (2) Patterson Army Health Clinic, Ft. Dix, NJ--Received a 
Supplemental Recommendation (TX3.4) which indicated a lack of 
standardized procedures throughout the facility regarding the manner to 
mark the expiration dates on multiuse medication vials.
    (3) USA Hospital--Heidelberg--Received one Type I (3.5). They did 
not follow their established policy regarding obtaining two signatures 
required for wastage of narcotic drugs. Only one signature was being 
obtained on the destruction documentation.
    (4) USA Regional Medical Center, Landstuhl, Germany--Supplemental 
Recommendation (TX3.5.6) identified that there were no procedures 
developed for recall of medications dispensed afterhours in one 
outpatient clinic.
    (5) Walter Reed Army Medical Center, Washington, DC--Supplemental 
Recommendation (TX3.5) indicated that the areas used for dispensing 
medications were not sufficiently secure to preclude entry by 
unauthorized personnel.
    Navy Answer. Five Navy facilities completed the JCAHO survey in 
1996, three Naval Hospitals and two Naval Ambulatory Care Centers. All 
facilities scored average or better in the area of medication use. 
Naval Hospital Cherry Point was the only facility that received a Type 
I Recommendation. The Type I recommendation at Naval Hospital Cherry 
Point was due to:
          (a) One of three narcotic logs reviewed did not have a dual 
        signature for accounting for narcotic medications and
          (b) a refrigerator temperature log was not maintained in one 
        clinical area.
    Air Force Answer. The following four medical facilities had 
``Medication Use'' discrepancies during the 1996 Joint Commission of 
Accreditation of Healthcare Organizations surveys: 48th Medical Group, 
RAF Lakenheath, England; 42nd Medical Group, Maxwell AFB, Alabama; 
375th Medical Group, Scott AFB, Illinois; and the 72nd Medical Group, 
Tinker AFB, Oklahoma. However, the management of those facilities took 
prompt action to resolve systemic, education or oversight problems 
responsible for these discrepancies.
    Question. What specifically has been done at each of these 
hospitals to correct this deficiency?
    Army Answer. Each MTF is required by JCAHO to submit evidence that 
they have corrected all deficiencies discovered during the survey. This 
can be in a written report or by actual focused surveys by another 
survey team at a later date. All facilities that received either Type I 
or supplemental recommendations during the CY1996 survey year have 
corrected all deficiencies to the extent that JCAHO has acknowledged 
the extent of their efforts and removed all Type I findings.
    Navy Answer. Naval Hospital Cherry Point has, through departmental 
meetings, reemphasized to all staff the importance of complying with 
hospital policies and established protocols.
    Air Force Answer. The following actions were taken by the four 
hospitals that had medication use deficiencies identified during their 
1996 JCAHO survey:
48th Medical Group, RAF Lakenheath, England
      Deficiency Identified: Locks to the emergency response 
carts, which store medications, were stored in patient care areas of 
the hospital, versus being stored in a secured place, thus compromising 
the control and security of the emergency drug supply.
      Corrective Action Taken: A system was devised during the 
survey and corrected before the team departed. Replacement locks for 
emergency carts are now secured in the pharmacy. Now, each time the 
emergency cart is used and medications/supplies replenished, a new 
numbered lock must be obtained from the pharmacy and signed for by the 
staff member. This process was well accepted by the Joint Commission.
42nd Medical Group, Maxwell AFB, Alabama:
      Deficiency Identified: Controlled drugs were not being 
checked and counted at the beginning and end of the shift in the Post 
Anesthesia Care Unit (PACU), even though a hospital policy required 
this activity.
      Corrective Action Taken: Hospital policy was reinforced 
and Registered Nurses assigned to the anesthesia unit are counting/
accounting for all controlled drugs at the beginning and the end of the 
8-hour shift, which is the total time the unit is open.
      Deficiency Identified: In one area of the hospital, 
access to replacement locks for the emergency response carts were not 
controlled, they were stored in the crash cart.
      Corrective Action Taken: A hospital policy was developed 
that addresses stringent control of controlled medications and cart 
locks. Replacement locks are now stored in the pharmacy and must be 
signed for.
375th Medical Group, Scott AFB, Illinois
      Deficiency Identified: An emergency drug kit located in 
the chemotherapy clinic was not secured and contained medications that 
were outdated.
      Corrective Action Taken: The discrepancy was corrected 
during the survey. The emergency drug kit was added to the list of 
stock medications within the clinic requiring routine checks per 
established policy.
72nd Medical Group, Tinker AFB, Oklahoma
      Deficiency Identified: The keys to the medication 
cabinets in one area of the hospital were left in the locks during 
normal duty hours.
      Corrective Action Taken: Medication cabinets are now kept 
locked with the keys held by the clinic supervisor. As a second 
security measure, the door to the treatment room, which contains the 
medication cabinets, is kept locked when not in use. All clinic 
personnel have been briefed on this policy; and all new personnel are 
briefed upon arrival/orientation to the clinic.
    Question. Have hospital commanders made efforts to improve the safe 
prescribing, dispensing, and administration of medications?
    Army Answer. Each hospital commander has provided sufficient 
evidentiary data to JCAHO to convince them to remove all Type I 
findings. This action required sufficient corrective processes to 
assure JCAHO that all standards are now being adhered to.
    Navy Answer. The only identified concern was the area mentioned in 
Q. 44 and corrective action was taken.
    Air Force Answer. Yes. There are Operating Instructions in place at 
all Air Force medical facilities that address these issues. These 
operating instructions, which are developed by senior level management 
and other subject matter experts, establish guidelines that direct 
clinical practice and ensure a safe environment of care for patients 
and staff alike. New staff members are briefed on hospital/clinic 
operating instructions as part of their newcomer's orientation and are 
then responsible to conform to the guidelines established. 
Additionally, problems identified with security of crash cart 
medications at the four hospitals previously mentioned, and the 
corrective actions taken, were shared with staff across the Air Force 
Medical Service. Such information is disseminated to medical service 
personnel in a number of ways: via a ``Clinical Alert'' message to 
medical facilities and intermediate commands worldwide; on the Air 
Force Clinical Quality Management Website HOMEPAGE; and at the annual 
Clinical Quality Management Conference, which is attended by senior 
physicians, nurses, medical technicians, credentials monitors and other 
Quality Services personnel from Air Force medical facilities worldwide.
    Question. Have commanders seen to it that providers who are not in 
compliance with these standards have been retrained, disciplined or 
fired?
    Army Answer. Requiring all providers to meet the JCAHO standards in 
their day-to-day practice and having JCAHO acknowledge the efforts made 
by each House individual MTF to eradicate all deficiencies is evidence 
that commanders have taken corrective action. We cannot guarantee that 
all individuals have been retrained, disciplined or fired; however, the 
requirements of the accrediting agency have been satisfied and will 
remain under close scrutiny. In addition, classes have been added to 
numerous courses offered by both the MEDCOM and AMEDD Center & School 
staff to all levels of MTF staff in this area.
    Navy Answer. Not applicable at Navy facilities.
    Air Force Answer. Yes, if an individual is identified as having 
difficulty with medication administration or any other clinical skill, 
they receive additional training until they are assessed to be 
competent to safely carry out the tasks required. Should the individual 
continue to have difficulty, despite additional training, and it is 
felt that such difficulty could result in a bad patient outcome, then a 
review of that individual's practice by a panel of peers is conducted 
and recommendation made to the hospital/clinic commander and corps 
chief, to limit the person's clinical privileges or remove them from 
clinical practice.
    Question. Have you reviewed the performance of other hospitals to 
see that this is not a problem elsewhere?
    Army Answer. Yes.
    Navy Answer. In 1997, eleven facilities completed the JCAHO survey; 
two facilities did not have co-signatures by the anesthesia staff when 
narcotics were destroyed. The standards were reinforced to all staff.
    Air Force Answer. Yes. All other Air Force facilities surveyed have 
received top scores in the category, ``Medication Use.''
    Question. Another problem area according to the JCAHO report is the 
ability of the system to assess the competence of hospital and clinical 
staff. Which hospitals are having problems in this area?
    Army Answer. The Army Medical Treatment Facilities (MTFs) are: 
Patterson Army Health Clinic, Ft Dix, NJ; Heidleberg, Germany; 
Wuerzburg, Germany; Walter Reed Army Medical Center, Washington, DC; 
Madigan Army Medical Center, Ft Lewis, WA.
    The major deficiencies in this area involved the requirement that 
staff be appropriately trained and maintain current competency to work 
with the specific age groups to whom they provide services. The 
standard also required that their job descriptions reflect this 
requirement and that their performance in this area be evaluated on a 
periodic basis to reflect their competency. All of the facilities 
surveyed had developed an elaborate system to ensure that staff were 
qualified for the age specific requirements shown in their position 
descriptions. However, they had not developed a system to ensure that 
the age specific competency skills of the staff were assessed on an 
ongoing basis. Each facility has now provided JCAHO sufficient data to 
indicate that they are now meeting this standard and JCAHO has revised 
the Accreditation Grids to reflect these updates.
    Navy Answer. Of the five facilities surveyed in 1996 only one 
(Naval Hospital Cherry Point) scored average. The other four facilities 
were in substantial or significant compliance with the standards. The 
JCAHO identified that the assessment of staff based on age of patients 
served was not documented in all staff files. This area is being 
addressed by Naval Hospital Cherry Point.
    Air Force Answer. Seven (7) Air Force medical facilities received a 
JCAHO survey in 1996: 436th Medical Group, Dover AFB, Delaware; 96th 
Medical Group, Eglin AFB, Florida; 48th Medical Group, RAF Lakenheath, 
United Kingdom; 42nd Medical Group, Maxwell AFB, Alabama; 375th Medical 
Group, Scott AFB, Illinois; 72nd Medical Group, Tinker AFB, Oklahoma; 
60th Medical Group, Travis AFB, California.
    The overall survey score received by these 7 facilities ranged from 
89 to 97, 100 being the highest possible score.
    Question. What is being done to assess the competence of staff at 
all military facilities?
    Army Answer. Each staff member's competence is assessed upon entry 
into the system using the assessment criteria developed by JCAHO and 
DODHA. Prime source verification of credentials and a query to the NDPB 
is accomplished. Current competency is also ascertained and for the 
majority of the functional areas an extensive orientation program has 
been developed with associated competency evaluations. References are 
also required for the majority of the positions.
    Air Force Answer. The category, ``Competency Assessment,'' falls 
under the area of Management of Human Resources in the Joint Commission 
survey standards. Scoring in this category is based on how well the 
hospital's or clinic's leaders carry out the following processes and 
related activities to ensure competency of their staff: planning; 
providing competent staff; assessing, maintaining and improving staff 
competence; and promoting self-development and continued learning.
    Planning addresses the processes in place to define the 
qualifications, competencies and staffing necessary to fulfill the 
hospital's mission.
    Providing competent staff addresses whether a program is in place 
to confirm the experience, education, and abilities of a staff upon 
entry and orientation to a new work environment.
    Assessing, maintaining, and improving staff competence addresses 
whether or not the organization has an ongoing competency assessment 
process in place that evaluates staff members' continuing abilities to 
perform throughout their association with the hospital/clinic.
    Promoting self-development and learning: evaluates whether 
leadership has created a culture that fosters learning and professional 
development, and encourages staff to provide feedback about the work 
environment to leaders.
    Staff education and training programs that include the above 
standards are in place at our Air Force hospitals and clinics. The 
response provided to Question HC-06-016 addresses the current process 
in place for evaluating the competence of our staff.
    Question. What is the current process for evaluating the competence 
of staff?
    Army Answer. Each facility has the requirement to accomplish annual 
performance evaluations of all staff. The specific procedures are 
contained in AR 40-68. In addition each facility must meet the 
standards established by JCAHO for evaluating staff and professional 
competence.
    Air Force Answer. Standard processes in place at Air Force medical 
facilities to assess the competence of staff include the following:
     New medical personnel, at a minimum, meet with the Chief 
of the Medical Staff to be briefed on the facility's Medical Bylaws, 
operating instructions, clinical practice/medical ethics issues, and 
the individual's provider responsibilities.
     New medical accessions are initially placed on supervised 
privileges until their practice is adequately observed/evaluated by 
their supervisor and a recommendation made to the hospital commander to 
award the provider regular privileges to practice independently. 
Providers' clinical privileges are reviewed every two years. The 
renewal of clinical privileges is based on a report of his/her ongoing 
clinical performance, thus privileges are performance-based.
     Competence of privileged providers is also assessed 
concurrently through medical staff peer review functions. Examples of 
such functions include: Hospital Tissue and Transfusion Committee; 
Infection Control Committee; Executive Committee of the Medical Staff; 
and the Quality Assurance Committee.
     New nursing personnel are oriented to their clinical work 
area under the tutelage of an experienced preceptor. During the 
orientation process, the new staff member's clinical skills are 
assessed for the ability to perform both basic and critical tasks 
independently. Only after exhibiting the ability to safely and 
competently complete the task is the individual given the ``Go Ahead'' 
to perform the task independently. At that time, that skill on the 
individual's orientation checklist is checked off indicating successful 
completion. Moreover, nurses additionally undergo skills competency 
assessment in five critical areas which include: Emergency Response, 
Infection Control, Medication Administration, and Blood Administration.
     Performance Feedback sessions take place every six months 
between the individual and his/her supervisor to discuss the 
individual's clinical performance; and an annual performance evaluation 
is written, which is filed in their military personnel folder.
     Practice deficiencies/unfavorable outcomes are addressed 
via the Peer Review process and are tracked through the hospital's 
Incident Report/Risk Management Program; lessons learned are shared to 
staff meetings and incorporated into the facilities' practice 
guidelines.
     Significant clinical competency issues, as they pertain to 
an individual, can be addressed through a number of avenues, which 
range from verbal/written counseling, to removal from clinical 
practice, to removal of clinical privileges when the individual is a 
provider.
    Question. If periodic reviews are now in place, what is wrong with 
the current system that leads to the inability to judge staff 
competence of staff? If this problem was identified in 1996, why 
haven't Military Treatment Facility Commanders examined and corrected 
the problem?
    Army Answer. We are confident that our current policies and 
regulations address this problem. As with any set of policies or 
regulation, the implementation may vary. Through vigorous education and 
training we are striving for minimal deviations; thus, perhaps 
improving the identification of incompetence but be aware that no 
health care system has taken this to the point of perfection.
    Air Force Answer. All Air Force medical facilities have operating 
instructions to identify staff competence.
    In 1996, the following seven (7) Air Force medical facilities 
received a JCAHO survey: 436th Medical Group, Dover, AFB, Delaware; 
96th Medical Group, Eglin, AFB, Florida; 48th Medical Group, RAF 
Lakenheath (England); 42nd Medical Group, Maxwell AFB, Alabama; 375th 
Medical Group, Scott AFB, Illinois; 72nd Medical Group, Tinker AFB, 
Alabama; 60th Medical Group, Travis AFB, California.
    All seven of these facilities were awarded the highest possible 
JCAHO score (``1'') in the area of Assessing Staff Competence during 
their 1996 JCAHO surveys. Moreover, our medical facilities continue to 
excel in this area. In 1997, several of our facilities scored ``100'' 
on their survey and received ``Commendation,'' JCAHO's highest 
recognition, for their organizations' outstanding patient and staff 
education/training programs.
    Question. The Bethesda Naval Hospital recently was forced to close 
down its blood bank due to incompetence among the staff. Could the 
problems at the Bethesda Blood Bank have been avoided if commanders had 
paid more attention to the competence of their staffs?
    Navy Answer. The National Naval Medical Center Blood Bank 
(consisting of the transfusion center and the blood donor center) was 
not forced to close. The Commander voluntarily ceased donor operations 
on the same day as the Food and Drug Administration (FDA) reported its 
findings. At the time leading up to the FDA observations of non-
compliance, the Commander of the National Naval Medical Center assessed 
competency based on educational achievements and national accreditation 
certifications. The root causes of the problems were: lack of process 
control in procedures, training and documentation; failure to follow 
Standard Operating Procedures; and lack of adequate supervision.
    Question. The JCAHO reported to DoD in 1996 that the condition of 
hospitals, equipment and processes used to ensure a safe and effective 
environment of care were substandard in several military hospitals. 
Please elaborate on this issue. Which hospitals currently have safety 
problems due to poor buildings, equipment and or processes?
    OSD Answer. Although our facilities meet basic JCAHO standards, 
many of our facilities continue to be substandard. With an aging 
medical inventory, we have numerous facilities in need of utility 
systems upgrades or replacements, functional renovations, expansions, 
or total replacement to make them effective and efficient healthcare 
environments.
    Five Air Force medical facilities at USAF Academy, Andrews, 
Barksdale, Luke, Vandenberg AFBs have been recommended by JCAHO for 
correction of Life Safety code deficiencies. Army has only one 
hospital, the 121st General Hospital in Seoul, Korea that is currently 
not JCAHO accredited. For Navy, in 1996, JCAHO did not report any major 
Life Safety deficiencies that would have caused non-accreditation of 
Navy Hospitals. Starting 1 Jan 1995, all medical facilities were 
required to provide JCAHO Surveyors with a Statement of Conditions 
(SOC) which identifies all significant Life Safety deficiencies and 
provide a Plan for Improvement (PFI). The SOC and PFI are established 
processes for insuring that a safe and effective environment of care is 
provided. All DoD medical facilities comply with this process 
directive. This procedure is an ongoing and continuous effort to 
identify Life Safety deficiencies and correct them in a proactive and 
advertised manner with the full cooperation and knowledge of the JCAHO. 
Any significant changes to the SOC and PFI are immediately identified 
to the JCAHO for review and approval. Because of rapid process changes 
in medical treatment delivery, facility and equipment changes and 
replacements are necessary on a continuous basis. Therefore, a SOC and 
PFI process was established as well as an Interim Life Safety 
Management program to manage Life Safety deficiencies in a manner 
consistent with customer safety requirements and resources.
    Navy Answer. There were no substandard U.S. Navy, Bureau of 
Medicine and Surgery (BUMED) Hospitals reported by JCAHO in 1996. 
Starting January 1, 1995 all medical facilities were required to 
provide JCAHO Surveyors with a Statement of Conditions (SOC) 
identifying all significant Life Safety deficiencies and a plan for 
improvement (PFI).
    All Navy medical facilities comply with the SOC/PFI process 
directive in an ongoing and continuous effort to promptly identify Life 
Safety deficiencies and expeditiously correct them with the full 
cooperation and knowledge of the JCAHO. Any significant changes to the 
SOC and PFI are immediately identified to the JCAHO for review and 
approval. Because of dynamic changes in medical treatment processes, 
facility and equipment, revisions to the SOC and PFI occur on an almost 
continuous basis, and are closely monitored.
    Question. What is being done to correct these problems? Do you have 
funds in the budget identified to fix those facilities cited by JCAHO? 
If so, how much, and for which facilities?
    OSD Answer. The medical facilities at Andrews AFB, MD; Barksdale 
AFB, LA; Luke AFB, AZ and Vanderberg AFB, CA are being corrected 
through MILCON projects currently under construction, totaling $33.4 
million. The AF Academy Hospital will be corrected through O&M repair 
efforts, estimated at under $1 million. The Army is addressing 
accreditation of the Korean hospital with an $8.75 million MILCON 
project in FY00 and a $61 million O&M funded facility upgrade in FY00 
through FY05. All DoD medical facilities, because of the SOC and PFI 
process, explained previously, have a verifiable plan to correct 
identified Life Safety deficiencies. Life Safety deficiencies receive 
the highest funding priority within the Offices of the Service Surgeons 
General and OSD Health Affairs. Adequate funding is provided to correct 
these deficiencies through the O&M and MILCON process.
    In FY 1997, Navy programmed the following projects for correction 
of Life Safety (LS) deficiencies:

                                            [In thousands of dollars]
----------------------------------------------------------------------------------------------------------------
                   MTF                              Proj No.                    Project title            Funding
----------------------------------------------------------------------------------------------------------------
NNMC BETH................................  R3-96....................  Repair elevators, B.1...........      $425
NH BREM..................................  R2-96....................  Fire protection system upgrade         434
                                                                       B.HPO1.
NH CPEN..................................  R1-95....................  Cross connection/backflow              130
                                                                       prevention.
NH CPEN..................................  RC9-94...................  Repair/upgrade electrical              411
                                                                       system, H-100.
NH CORPUS................................  R6-96....................  Elevator system upgrade, B.H100.       695
NH GITMO.................................  R1-95....................  Install sprinkler system, B.H1..       245
NH GUAM..................................  R1-95....................  Replace elevators, B.1..........      2240
NH GUAM..................................  R34-93...................  Replace transformers/                  319
                                                                       distribution panels (Phase II).
NH JAX...................................  R3-98....................  RPR elevator controls, B.2080...       376
NMC PTSMHC...............................  R1-95....................  Install sprinkler sys, B.104....       277
NH ROOSRDS...............................  R2-96....................  Correct life safety code def/         1197
                                                                       provide sprinklers, B. 1790.
NH ROOSRDS...............................  R13-96...................  Correct NEC Deficiencies/RPL           931
                                                                       lightning protection, B.1790.
NMC SDIEGO...............................  R17-95...................  Upgrade secondary electrical           129
                                                                       wiring (BEQ), B.41.
NH 29-PALMS..............................  CX-97....................  Electrical system additions.....       150
NMC SDIEGO...............................  R13-95...................  Upgrade secondary electrical           620
                                                                       wiring (BEQ), B.26.
----------------------------------------------------------------------------------------------------------------

    Navy Answer. All BUMED medical facilities, because of the SOC and 
PFI process explained in a previous question, have a variable plan to 
correct identified Life Safety deficiencies. Life Safety deficiencies 
receive the highest funding priority. Adequate funding is provided to 
correct these deficiencies through the Special Projects Program and 
MILCON process. Special Project Funding was allocated in fiscal year 
1997 for the following Life Safety (LS) deficiency projects:

                        [In thousands of dollars]
------------------------------------------------------------------------
                                                                   LS
             MTF                       LS project title          Funding
------------------------------------------------------------------------
NNMC BETH....................  R3-96  Repair elevators, B. 1..      $425
NH BREM......................  R2-96  Fire protect SYST              434
                                upgrade B. HP01.
NH CPEN......................  R1-95  Cross connection/              130
                                backflow prevention.
NH CPEN......................  RC9-94  Repair/upgrade                411
                                electrical system, H-100.
NH CORPUS....................  R6-96  Elevator SYST upgrade,         695
                                B. H100.
NH GITMO.....................  R1-95  Install sprinkler SYST,        245
                                B. H1.
NH GUAM......................  R1-95  Replace elevators, B. 1.     2,240
NH GUAM......................  R34-93  Replace transformers/         319
                                distribution panels (Phase II).
NH JAX.......................  R3-98  RPR Elevator controls,         376
                                B. 2080.
NMC PTSMH....................  CR1-95  Install sprinkler SYS,        277
                                B 104.
NH ROOSRDS...................  R2-96  Correct life safety code     1,197
                                def/provide sprinklers, B.
                                1790.
NH ROOSRDS...................  Correct NEC Deficiencies/ R13-        931
                                96 RPL lighting protection, B.
                                1790.
NMC SDIEGO...................  R17-95 Upgrade secondary              129
                                electrical wiring (BEQ), B. 41.
NH 29-PALMS..................  CX-95  Electrical system              150
                                additions.
NMC SDIEGO...................  R13-95  Upgrade secondary             620
                                electrical wiring (BEQ), B. 26.
------------------------------------------------------------------------

    Fiscal year 1997 MILCON funding was allocated for the following 
Life Safety deficiency projects:

------------------------------------------------------------------------
               MTF                 LS Project title       LS  Funding
------------------------------------------------------------------------
NavHosp Lemoore.................  Hospital            Total $38 million
                                   replacement.
Med/Den Clinic Key West, FL.....  Clinic replacement  Total $13.6
                                                       million
Troop Med Clinic Edson Range,     Clinic replacement  Total $3.3 million
 Camp Pendleton, CA.
------------------------------------------------------------------------
NavHosp Portsmouth, VA Phase VIII/Acute Care Phase VIII $24M Facility
  (new facility).

    Question. Do you have funds in the budget to purchase new 
equipment? If so what type of equipment?
    OSD Answer. The increasing Other Procurement threshold is driving 
the need for an increased level of O&M equipment funding. We are trying 
to budget enough funds to meet this demand. This funding has not 
benefited from the $750 million alluded to earlier. Funds are budgeted 
for equipping new facilities and for normal replacement of equipment. 
The equipment type includes medical care support equipment (e.g. 
surgical drill sets, scope sets, radiographic/flouroscopic systems, 
nurse call systems, dental operating systems, etc.).
    Navy Answer. The following amounts for equipment procurement were 
included in the FY99 President's Budget:
    In house care (Within the Continental United States): $118.7 
million
    In house care (Outside the Continental United States): $10.9 
million
    The above amounts are for TRISERVE distribution and are to be 
utilized for direct patient care equipment only. The specific amount 
for each Service was not specified.

                      Patient Data and Information

    Question: Effectively managing patient information is absolutely 
vital to improving patient outcomes and hospital performance. Patient 
records should properly identify the patient, support the diagnosis and 
treatment, document results and promote continuity of care. 
Unfortunately, this has been a continuing source of error. Often, 
important data is missing from a patient's record, verbal orders are 
not recorded properly, and ancillary and important information is not 
tracked. What is being done to shore up this area? Please explain how 
automation programs will help this process.
    OSD Answer. With the Computer-based Patient Record (CPR), we will 
achieve comprehensive clinical information management, including 
simultaneous automated transmission and documentation in the patient's 
CPR. Tightly integrated orders management, results reporting, 
documentation and follow-up functions will assist patients in receiving 
seamless, quality care. The CPR, with data standardization, will enable 
a comprehensive measurement of patient outcomes, including disease 
status, health status, satisfaction with healthcare services, and 
health status outcomes.
    The CPR will require registration only once in a beneficiary's 
career, instead of at each facility visited. Orders management will be 
directly linked to the scheduling function, which will support real-
time scheduling of patient appointments, procedures, staff, and 
facilities through links with the order entry and documentation 
functions, thus enhancing patient's access to care. Most coding and 
grouping will occur automatically, based on key words. Quality 
management and utilization management processes will have available 
comprehensive aggregated clinical data, including outcomes of care 
plans and clinical pathways. This will result in a decrease of repeat 
procedures, thus decreasing costs and increasing patient satisfaction. 
The CPR will maintain the security and confidentiality of all patient 
and provider data through physical and electronic safeguards and user 
training. This will provide a comprehensive, longitudinal patient 
record spanning an individual's lifetime.
    Army Answer. The computerized patient record (CPR) will contribute 
to the effective management of patient information management and to 
the improvement of patient outcomes and hospital performance. The 
Department of Defense (DOD) relies on several computerized information 
management systems for capturing some of the information listed in the 
question above. These include the major DOD Ambulatory Data System, the 
Composite Healthcare System (CHCS) I (in existence now in at least 421 
clinics and hospitals), CHCS II, which will be undergoing alpha testing 
in the National Capital Region in August this year, the Clinical 
Information System, which is the predominant inpatient CPR system at 
several military hospitals, and the Corporate Executive Information 
System (CEIS), which examines patient outcomes at different military 
hospitals and overall hospital performance (undergoing testing at 
several sites).
    The CPR effectively manages patient data and information in many 
ways: records are always legible; lost documents are no longer a 
problem, since there is always soft copy of that document in the 
patient's CPR; results notification is readily available making it 
easier for the health care provider to make a decision on the type of 
health care to provide; data is available to more than one authorized 
user at a time making performance of patient care more efficient. Dual 
entry of data is eliminated or minimized resulting in a decrease of 
repeat procedures, improved patient satisfaction, and decreased costs. 
Coupled with this are internal validity and integrity checks, which are 
programmed into the system during the development of the CPR. Validity 
checking makes sure that value of the data element belongs to the 
correct data set (for example, the item male cannot be given a 
diagnosis assigned for a female), and integrity testing protects the 
data from unauthorized tampering into the CPR. Additional record 
keeping of patient data is manifested by registration of patient data 
and the linkage of some types of patients' orders to the patient 
scheduling appointment system and procedures. With the full deployment 
of CHCS II, which will take place over the next several years, this 
will bring in the full documentation of the health care provider's 
treatment to the patient. This system will couple problem lists and 
coding of diagnoses based on the International Classification of 
Disease-Ninth Revision-Clinical Modification and Current Procedural 
Terminology codes. Some of this coding information for diagnoses will 
be linked automatically to key documentation functions in the CPR.
    With the deployment of CHCS II, decision support modules will 
provide auditory and electronic alerts and indicators needed in the 
care of patients. These decision support systems will scan data for 
medical alerts, contraindications, and overdue examinations. These 
alerts, for example, will be helpful in minimizing errors due to 
incorrect medications and will encourage the safe and correct 
administration of drugs.
    In the areas of competence and assessing the management of the 
environment of care, the deployment of the CEIS will examine the care 
delivered by health care providers on a certain disease population of 
patients and the outcomes of that care. This will assist in identifying 
areas where more effective quality management might need to be 
utilized, and identify problem areas before they become serious 
problems. In addition, as part of the CPR, clinical guidelines in the 
form of clinical pathways are being developed for ambulatory and 
inpatient settings as well. These guidelines serve as cornerstones for 
quality management and ensure that the best possible patient outcomes 
are being met.
    Through the development of a CPR, the DOD will be able to shore up 
its current and proposed automation program and provide a 
comprehensive, longitudinal patient record spanning an individual's 
military career and retirement years. While it is unrealistic to assume 
that it will be error free, the opportunities for introducing errors 
will be significantly reduced.
    Navy Answer. A consortium has been formed with Department of 
Veterans Affairs, Indian Health Services, and Louisiana State 
University Medical Center to develop a Government-Computer-Based 
Patient Record (G-CPR). The group met in February 1998 to begin 
development of this program.
    The CPR will be an interactive and virtual data repository that 
provides a comprehensive, life-long medical record of an individual's 
health care. Appropriate portions will be easily accessible to 
authorized users when and where needed. The CPR will facilitate the 
worldwide delivery of health care, will assist individuals and 
clinicians in making health care decisions, and support leaders in 
making operational and resource allocation decisions.
    Air Force Answer. The Military Health Services (MHS), in a 
partnership with the Department of Veterans Affairs, Indian Health 
Service, and Louisiana State University Medical Center, is developing 
requirements for a Government Computer-based Patient Record (G-CPR). 
The G-CPR is intended to provide automated capture and maintenance of 
patient-centered information over the patient's life cycle. The Air 
Force Medical Service is deploying interim information systems to 
capture data to support force protection, readiness, and disease 
management activities. These systems include the Military Immunization 
Tracking System (MITS), SmartTerm Buttons, Clinically Integrated 
Workstation (CIW) Lite, and Desert Care.
    MITS is fully deployed to Air Force sites. Data that is collected 
in MITS will be interfaced with the MHS Preventive Health Care System 
(PHCS) when it is ready for deployment.
    SmartTerm Buttons is an automated tool allowing providers to 
capture ICD-9 and CPT codes at the point of care versus manually 
filling in optical character recognition (OCR) scanning sheets (the 
standard test form you need a #2 pencil for), which then have to be 
scanned into the system. SmartTerm Buttons data is then sent to the 
Ambulatory Data System (ADS) database using an interface. The interface 
also performs edit checks using business rules to check the quality of 
data being passed between the systems.
    CIW Lite is a provider workstation designed to give clinicians a 
graphical user interface (GUI) to the Composite Health Care System 
(CHCS). Functionality includes order entry, automated summary of care, 
command interest flags, as well as ICD-9 and CPT coding.
    Desert Care tracks the encounters of Air Force service members 
during their tours of Southwest Asia. All medical diagnoses and 
injuries are coded to allow tracking, follow-up, and prevention 
measures.
    Question. Do you agree that software programs will not completely 
solve problems of inaccuracy with respect to patient records?
    Answer. We agree. Whenever human intervention occurs, there is 
always the possibility of errors or inaccuracies being introduced into 
patient records. There is also the possibility of inaccuracy in records 
when the data collection is not automated or is omitted altogether, or 
when paper records have to be used. These facts are taken into account 
in all of our automation planning, system design, and risk mitigation 
strategies.
    For example, one risk is that software designed to mirror a manual 
or previous automated solution to a problem may be keystroke intensive 
or perpetuate inefficient business practices. Obviously, training is 
key to ensuring an accurate patient record. Users must know and be 
adequately prepared to input and retrieve data.
    To address these areas, we have taken a number of proactive steps:
     Extensive use of work groups to identify user requirements 
and interfaces and incorporate end user feedback into the development.
     Business process engineering efforts to identify best 
practices.
     Configuration and system capacity planning and management.
     Transition planning to specifically address patient record 
accuracy.
     Extensive test and evaluation to verify data quality.
     Traning throughout the life of the system.
    Question. What have you done to reiterate to providers that 
accurate record keeping is essential to proper patient diagnosis and 
care?
    Answer. Accurate record keeping, essential to proper patient 
diagnosis and care, is reiterated to providers on a regular basis at 
meetings such as the monthly Clinical Staff Meeting, monthly Quality 
Management Meeting, and the annual Medical Legal Briefing. Providers 
are well aware of their responsibility to maintain accurate, legible 
documentation in patient's records because it is in the patient's best 
interest as well as theirs.
    Question. Are providers evaluated on the basis of proper record 
keeping?
    Answer. Providers are evaluated on their record keeping when 
routine records reviews are performed, which is generally on a monthly 
or quarterly basis. Proper record keeping is one of many items looked 
at during a records review. Information from records reviews is 
documented and forwarded to the facility quality management coordinator 
for inclusion in the provider's credentials file. Providers can be 
denied leave and temporary duty for training if records are not up to 
date.
    Question. Do you have funds in the budget to help improve record 
keeping?
    Answer. Yes. There is $94 million in FY 99 for Development and 
Deployment in the Composite Health Care System program to improve 
automation of patient records.
    Question. JCAHO also cited Special Treatment Procedures--the use of 
restraint and seclusion--as a problem area. What is being done to 
ensure that these procedures are used appropriately? What policy is in 
place to help protect the patient?
    Answer. For the survey year 1996, JCAHO found 62.4% of the military 
hospitals in substantial or significant compliance with Special 
Treatment Procedures. In the civilian sector, 51.7% of the hospitals 
were in substantial or significant compliance. Policy and procedures 
are being addressed by all Services, but especially by those facilities 
that were deficient in this grid element. Actions by the Services have 
included notifying quality managers of current requirements, 
standardized flow sheets to facilitate more complete documentation of 
patient restraint, and staff training in patient restraint. Other 
actions to improve compliance include after action reports from 
surveyed hospitals to facilitate improvements at other facilities, 
Service level Quality Management meetings with Military Treatment 
Facilities addressing problematic JCAHO standards, pre-JCAHO site 
surveys for facilities with upcoming surveys, and dissemination of the 
DoD Quality Management Report to the field.
    JCAHO is also working their position on the issue of Special 
Treatment Procedures. Originally the policy was directed at in-patient 
mental health facilities but was expanded to hospitals. Scoring 
guidelines from the JCAHO will change in this area.

                Outcomes of Patient Care and Evaluation

    Question. The 1996 Quality Management Report also cited problems 
with military hospitals and their inability to track and evaluate the 
outcomes of patients. The use of quality reviews and performance 
measures should help providers achieve a higher standard of care. What 
are you doing to increase the use of quality reviews to improve patient 
outcomes?
    OSD Answer. The 1996 Quality Management Report (QMR) introduced the 
Special Studies component of the National Quality Management Program as 
a replacement for the old Civilian External Review Program (CERP). The 
CEPRP was initiated in 1986 in response to allegations of substandard 
care in military treatment facilities (MTFs). The CEPRP successfully 
documented that the quality of medical care delivered in the MTFs was 
not only equivalent to care provided in the civilian sector, but 
surpassed it in various instances. Under the CEPRP, cases were reviewed 
on a case by case basis against a recognized standard of care for that 
disease or procedure. While the CERP reports provided useful feedback 
on the cases reviewed, the program was designed to find substandard 
individuals and not to address quality improvements in the system.
    The ``special'' product line studies are designed to evaluate the 
quality of care (outcomes) provided across the system and the resources 
(cost) expended to achieve those outcomes. The Quality Management 
Reports, generated by the special studies, identify ``best clinical 
practices'' which are defined as the best outcomes achieved with the 
most effective use of resources. These studies have received national 
recognition by the Joint Commission for Accreditation of Healthcare 
Organizations (JCAHO) as leading the healthcare industry in outcomes 
research.
    The annual Quality Management Reports are distributed to the 
Surgeons General offices and to each MTF. In an effort to increase the 
visibility of these studies at the MTF provider level, we have 
undertaken several initiatives:
     The Special Studies are a part of the agenda for the 
Medical Executive Training Seminar (this course is designed for senior 
level staff at the MTFs). In FY 1999 we hope to initiate a similar 
program, in cooperation with USUHS faculty whereby the target audience 
will be the MTF Major/LtCol clinical service chiefs. The focus of this 
program will be helping providers use the data from the Quality 
Management Reports and ORYX program to improve care at the bedside.
     DoD(HA) made a decision to address a new Joint Commission 
accreditation requirement, called ORYX, from an MHS corporate 
perspective by using the processes already in place from the NQMP 
``special studies'' program to address the ORYX requirement. By linking 
these programs together we've given our providers greater visibility to 
both programs. (Both programs focus on patient outcomes and quality 
improvement).
     We are also conducting a pilot test of a special web site 
designed to provide an education and communication forum for providers 
on topics related to the special studies and ORYX programs.
    Question. The 1996 Quality Management Report also cited problems 
with military hospitals and their inability to track and evaluate the 
outcomes of patients. The use of quality reviews and performance 
measures should help providers achieve a higher standard of care.
    To date, a few quality reviews have been completed. However, the 
quality review process is inconsistent. Furthermore, there is little 
evidence that hospitals are changing their practices in response to the 
recommendations of these reviews.
    What are you doing to increase the use of quality reviews to 
improve patient outcomes?
    Navy Answer. In order to increase the use of quality reviews to 
improve patient outcomes, Navy Medicine is:
     Implementing the new JCAHO ``ORYX'' quality monitoring 
criteria at all naval hospitals and clinics beginning July 1998. These 
will provide quality performance measures to help improve outcomes.
     Continuing to participate with the Forensics Medical 
Advisory Service Corporation and Vector Research, Inc., which conduct 
``Best Clinical Practice'' studies for the National Quality Monitoring 
Program.
     Providing ``Lessons Learned'' to commanders of medical 
facilities when patient outcomes may be improved as a result.
    Question. What are the Services doing to follow up on clinics and 
hospitals that do not have adequate performance standards?
    Army Answer. Army medical treatment facilities, on average, 
outscore civilian institutions on overall JCAHO grid scores. Those 
receiving Type 1 or supplemental findings are not currently required to 
provide our office copies of the follow-on documents validating that 
the deficiencies have been corrected.
    Navy Answer. Navy Medicine is unaware of any naval facilities that 
do not have adequate performance standards. When an adverse outcome 
occurs, which suggests possible deviation from the accepted standard of 
care, an investigation is undertaken. If the investigation reveals a 
problem, corrective action may be recommended (if applicable), the 
provider's privileges are subject to review and modification, and the 
commander of the facility is directed to report to the Navy Surgeon 
General that compliance with recommendations has been achieved. If the 
problem is found to be systemic, the issue may be referred to the 
Medical Inspector General for surveillance. If the problem is one which 
might occur in another facility (e.g., the problem is related to drug 
packaging or equipment malfunction), a ``Lessons Learned'' is provided 
for broad dissemination so that corrective action can be taken to avoid 
similar problems in the future.
    Air Force Answer. Combined medical facility JCAHO and Health 
Services Inspection (Air Force Medical Inspector General) survey 
reports are reviewed and kept on file at the Clinical Quality 
Management Division, Office of the Surgeon General. Areas in need of 
improvement, identified by JCAHO as a Type ``1'' Recommendation, as 
well as ``best Practices'' are identified. Respective facilities are 
followed-up with to address their corrective action plans and to put 
them in contact with resources who can assist them in resolving 
deficiencies, if needed.
    In addition, the Joint Commission requires all facilities to submit 
a written progress report, within six (6) months of receiving their 
final survey report, outlining action taken to correct Type ``1'' 
deficiencies. Corrective actions must convince JCAHO that processes 
implemented have resolved the problem(s) identified or risk loss of 
accreditation.
    Question. Do the Services mandate the use of ``Best Practice''?
    Army Answer. Yes. The DOD Utilization Management Directive and the 
DOD National Quality Management Program provide guidance to the 
services in the area of ``best practice''.
    The DOD Utilization Management Directive mandates the 
identification of best practices. Under this directive, the facilities 
identify high cost, high volume, or problem prone diagnoses. The 
facility develops a health care delivery proves utilizing a disease 
management or demand management approach. MEDCOM is tracking diagnoses 
and outcome data by facility.
    The DOD National Quality Management Program identifies best 
practices and outcomes for a select group of high volume, high cost 
diagnoses. The facilities must then develop processes to reach the 
desired outcomes for those diagnoses chosen. The exception is that all 
of our facilities are mandated to implement the National Asthma 
Guidelines.
    Navy Answer. Navy Medicine does not mandate the use of ``Best 
practices'' since ``Best Practices'' are continually changing as the 
practice of medicine advances, so any mandate of today's best practice 
may be inappropriate tomorrow. In addition, there is no central 
repository of proven ``best practices'', although some federal agencies 
and specialty organizations are publishing clinical guidelines that are 
available to interested providers. Although the Navy does not require 
the use of best practices, a number of programs are underway to 
encourage and facilitate the adoption of best practices as they evolve. 
Navy Medicine is currently involved in a project focusing on the birth 
product line. Through an inclusive, interactive, iterative process, 
providers from all naval hospitals are working collaboratively to 
establish meaningful metrics, reduce variation in practice patterns, 
and identify policies that need to be changed. Ultimately, this 
approach will improve the quality of care, improve patient 
satisfaction, and reduce resource requirements and/or increase the 
number of deliveries that can be performed. Other product lines (e.g., 
orthopedics, primary care, and behavioral health) will be targeted with 
similar approaches. In addition, specialty leaders in the various 
medical specialities share best practices with their colleagues as they 
learn of valid research supporting changes in practice patterns. For 
example, the specialty leader for pediatric pulmonary disease has 
disseminated the pediatric asthma practice guidelines put forth by the 
National Heart, Lung, and Blood Institute.
    Air Force Answer. The Air Force does not mandate the use of best 
practices but highly recommends it. Initiatives launched to ensure our 
beneficiaries quality care include:
      Active participation in the DoD Quality Management 
Program through participation in Advance Medicine Clinical Studies.
      Air Force hospitals have additionally been participants 
in the Maryland Hospitals Association Quality Indicator Project (QIP) 
for over seven (7) years. The QIP focuses on measurement and comparison 
of patient outcomes. This project parallels the Joint Commission and 
the Health Care Financing Administration's (HCFA's) efforts and 
research into developing performance measures. Indicators provide a 
focus for the organization's peer review process by ``flagging'' 
instances of apparent substandard care or outcomes as well as favorable 
outcomes. Of note is the fact that Air Force inpatient facilities have 
maintained significantly better rates than the aggregate average of 
over 1,000 participating inpatient facilities nationwide on six 
clinical indicators which include: inpatient mortality, neonatal 
mortality, perioperative mortality, unscheduled readmissions, 
unscheduled returns to the operating room, and unscheduled returns to 
the special care unit.
      Activation of the Air Force Performance Measurement Tool 
(AFPMT). This tool presently includes 27 standardized measurements of 
performance. The performance measures and their automation solutions 
represent a critically important step toward incorporating the 
principles of utilization management/quality management into the Air 
Force Medical Service. The current benchmark for health care plans is 
the Health Plan Employer Data Information Set (HEDIS). The Air Force 
Medical Service PMT establishes the foundation upon which future 
performance assessment enhancements will be built. While our efforts in 
the JCAHO/HSI accreditation process continue, the AF Performance 
Measurement Tool was a crucial step toward meeting our clinical quality 
goals through the identification and sharing of ``best outcomes through 
best practices.''
      Deployment of 3 evidence-based, field-tested clinical 
practice guidelines directed at care of patients with Asthma, Diabetes, 
and Hypertension.

                        Performance Measurement

    Question. Last year, the Department indicated that it would 
establish Performance Measurement and Metrics to improve compliance 
with JCAHO standards. Have these metrics been developed?
    Answer. DoD has established a scientific council that is working 
with the Joint Commission and DoD contractors to incorporate the ORYX 
measures that the Joint Commission is developing. Concurrently, DoD is 
continuing to publish its Military Health System (MHS) Performance 
Report Card which reports JCAHO grid scores and accreditation for all 
MHS facilities.
    Question. How does DoD Health Affairs enforce compliance with JCAHO 
standards?
    Answer. DoD requires all facilities to be accredited by the Joint 
Commission on Accreditation of Healthcare Organizations IAW Department 
of Defense Directive 6025.13, ``Clinical Quality Management Program 
(CQMP) in the Military Health System''. JCAHO conducts surveys on a 
triennial basis to determine facility compliance with accreditation 
standards. Each facility's overall accreditation score (Summary Grid 
Score) is tracked by the parent Service and reported to DoD(HA) 
annually. Services are held responsible for the accreditation status 
and performance of their facilities. DoD aggregates the information on 
facility accreditation status and summary grid scores it receives from 
the Services and publishes it in the annual Quality Management Report.

                             Credentialing

    Question. The Quality Management Report recommended that DoD make 
improvements in tracking malpractice and adverse privileging actions 
against physicians and health care providers. Unfortunately, there has 
been great resistance on the part of hospital commanders and providers 
to reporting instances of questionable practice. How are you changing 
the system of reporting questionable outcomes?
    How will you improve tracking of adverse privileging and 
malpractice?
    Answer. Health Affairs has instituted the Risk Management Committee 
under the TRICARE Quality Council to closely monitor and improve the 
risk management process by providing a forum for communication and 
information sharing between DoD, the Service quality management 
directors/risk managers/general counsel, Department of Legal Medicine/
Armed Forces Institute of Pathology, and the Department of Justice. 
Metrics will be established to monitor the number of malpractice 
payments and adverse actions, the number of reports to the National 
Practitioner Data Bank (NPDB), timeliness of reports, any backlog, and 
any problems with NPDB reporting.
    An external peer review agency is being added to the process to 
review paid malpractice claims that have been categorized as ``standard 
of care met'' or a ``system problem'' by the Surgeons General Office of 
each Service. This mechanism will provide Health Affairs and the 
Services an external second opinion on the determinations made by the 
Surgeons General.
    New automated information software called the Centralized 
Credentials Quality Assurance System (CCQAS) will be a new tool 
available in the Fall of 1998 to facilitate documentation and tracking 
of malpractice and adverse actions world-wide for all Services.
    Question. How many cases of potential malpractice does each Service 
have for review? What are the backlogs?
    OSD Answer. Potential malpractice cases for each Service are: 
Army--1400 open cases, Navy--259 open cases, Air Force--140 open cases.
    The backlogs are: Army--44 cases, Navy--25 cases, Air Force--0 
cases.
    Army Answer. As of April 15, 1998:
    1. 354 paid malpractice claim cases. 109 cases pending HQ, MEDCOM 
Administrative Action.

------------------------------------------------------------------------
                                                   No. of       No. of
                 Admin Action                      cases      providers
------------------------------------------------------------------------
a. Initial Review--Backlog....................           44  ...........
b. Awaiting Provider Response.................           18           21
c. Provider Notification......................           22           29
d. Awaiting Provider Response Review..........            6            6
e. Special Panel Review.......................           10  ...........
f. SJA Adm Review.............................            1            1
g. Initial Review--less than 90 days..........            8  ...........
                                               -------------------------
      TOTAL...................................          109           57
h. Cases closed FY 98.........................           31  ...........
------------------------------------------------------------------------

    2. 245 cases pending documents from MTF (DD Form 2526) and or/ 
CCRB:

        Documents                                           No. of cases
a. MTF DD Form 2526...........................................        48
b. CCRB.......................................................       141
c. CCRB & MTF DD Form 2526....................................        56
                    --------------------------------------------------------------
                    ____________________________________________________

      Total...................................................       245

    Navy Answer. Navy currently has 90 cases in various stages of 
review. Exact number of potential malpractice cases is unknown since 
reviews have not been completed.
    Air Force Answer. The Air Force Surgeon General's Office receives 
approximately 30 malpractice claims each month to complete final 
standard of care review. We maintain a balance of 100 to 150 cases open 
in various stages of review. The Air Force closes 20 to 30 cases each 
month.
    The backlog of paid malpractice claims which require closure and 
potential reporting to the National Practitioner Data Bank (NPDB) are 
part of this total number of open claims. As of April 1, 1998, the Air 
Force has a balance of 51 paid malpractice claims that require final 
standard of care determination and potential NPDB Reporting. Of theses 
51 cases the majority (38) have at least one determination that 
Standard of Care was not met. These 38 cases are in the process of 
being closed by the Air Force which involves: (1) notification of the 
involved provider(s) to respond to the claim, (2) Air Force Clinical 
Review/Medical Practice Review Board and (3) Air Force Surgeon General 
review.
    The remaining 13 backlog cases include 8 cases where standard of 
care is met, 1 case where standard of care is indeterminate, and 4 
cases that have not been received by the AF Surgeon General's Office 
for review.
    The balance of backlog cases fluctuates each month for the Air 
Force, as legal closures are reported to the Surgeon General every 
month. For example, in January 1998, six Air Force claim payments were 
reported and in February 1998, seven payments were reported.
    Question. Why do we still have backlogs? When do you plan to have 
these cases completed? What are the impediments to doing so?
    Answer. We have backlogs for many reasons. Processing time from 
when a claim is filed until it is closed may take many years. Most risk 
management departments at the Surgeons General Office are only 1 or 2 
people deep. Communication between the Department of Justice, Service 
Judge Advocate General's Office, and the Service Risk Management 
Department is disjointed since they are all separate from each other. 
(The contractor cleaning up the backlog for Army and Navy, started work 
at the end of March 1998.)
    Army anticipates their backlog will be completed by the end of 
August 1998 and Navy by the end of June 1998.
    The impediments to cleaning up the backlog include old cases with 
no first hand historical knowledge of events, records, not available 
for review, incomplete records missing documents, tracking down 
documents, tracking down providers who may have transferred to another 
base, separated from the Service, or retired.

Status of Physicians and Providers Cited for Malpractice in the Dayton 
                                 Series

    Question. In October of 1997, the Dayton Daily News, published a 
series of articles on military medicine. The paper reported that 
several doctors in the military health system were allowed to practice 
even though they had been involved in or linked to malpractice.
    According to the Dayton Daily News, Dr. Thomas J. Conage, an Air 
Force Colonel, ``used someone else's license, and continued as Chief 
Flight Surgeon'' at Tinker Air Force base in Oklahoma for six months. 
According to the story, he was reprimanded but continued to practice 
medicine for a year after that. Will you please explain the nature of 
Dr. Conage's reprimand. Was he allowed to retire? Was the disciplinary 
action in this case sufficient to guard against this type of problem?
    Air Force Answer. Please see the response to Mr. Hobson for the 
record for the specific timeline of events regarding this issue, which 
answers the first two questions above.
    There was never a concern about Dr. Conage's clinical performance; 
he provided good quality medical care. ------. We have no evidence of 
incompetence or negligent treatment of any patient by Dr. Conage.
    Question. Dr. Jerry Mothershead, a physician at Portsmouth Naval 
Hospital, was allowed to work in an emergency room ``after he had been 
drinking''. The article says that he had at least a dozen episodes of 
drinking that lasted ``three to four days each'' between 1991 and 1994. 
Nevertheless, the articles report the Commander of the Navy Medical 
Corps, Dr. W.A. McDonald, wrote to the Virginia Medical Board saying 
that: ``I have seen no evidence that Dr. Mothershead's alcoholism has 
any current impact on his ability to practice medicine.''
    The articles say that Dr. Mothershead is still at Portsmouth Naval 
Hospital. Is this true? Was Dr. McDonald reprimanded for his letter on 
behalf of Dr. Mothershead? What are you doing to get the message out to 
hospital commanders that this sort of situation will not be tolerated? 
How do you intend to enforce his policy?
    Navy Answer. Dr. Mothershead currently holds a full, unrestricted 
Virginia medical license and holds emergency medicine privileges at NMC 
Portsmouth. He also serves as the Navy Surgeon General's specialty 
leader for pre-hospital emergency care and is a nationally recognized 
expert in the field.
    To our knowledge, Dr. McDonald was not reprimanded for his letter. 
Thorough review indicated there was no evidence that Dr. Mothershead's 
alcoholism ever affected his professional responsibilities. He has not 
been the subject of any medical malpractice complaints.
    The Navy Medical Department is responsible for providing care to 
all of its beneficiaries, including its staff. When Dr. Mothershead 
sought rehabilitation treatment, the medical department provided that 
support and assisted him through a difficult time. Subsequently, he 
continues to be a valuable asset to the Navy Medical Department.
    All of our MTF commanders are aware of the ``Zero tolerance'' 
policies. The DoD and Service policies provide specific guidelines for 
actions to be taken in these types of cases. The guidelines were 
established to protect the Government, as well as the individual.
    Air Force Answer. Air Force Instruction 44-119, Medical Service 
Clinical Quality Management, published in October 1995, provides 
guidance to commanders on malpractice claims and adverse privileging 
actions. Commanders are required to take an adverse privilege action 
(suspension, restriction, revocation) when a provider's conduct, 
impairment or professional competence impacts patient care or could 
adversely affect patient care. This policy further defines an impaired 
provider as ``a provider who by reason of alcohol or drug abuse, 
emotional disturbance, or medical condition has exhibited 
unprofessional conduct, substandard medical practice or professional 
incompetence, which is, or is reasonably probable of being, detrimental 
to patient safety or the proper delivery of quality patient care.''
    Question. According to the Dayton Daily News, Dr. Edner C. 
Monsanto, a pediatrician at Kings Bay, was involved in two cases of 
malpractice. One involved the misdiagnosis of a child who had 
meningitis, and resulted in permanent disability. A judgment of $1.9 
million was paid. A second case resulted in permanent damage to an 
infant. A judgment of $4.2 million was paid according to the Dayton 
Daily News. Dr. Monsanto is still practicing at Kings Bay.
    What, if anything, was done in the aftermath of these judgments to 
ensure that other patients were not put in jeopardy? Is Dr. Monsanto 
being supervised? Has he had limits put on his privileges because of 
these recent malpractice cases? If not, why not?
    Navy Answer. The two cases mentioned in the articles occurred six 
to seven years ago. There are no other instances where CDR Monsanto's 
care has been found to be below the required standard. In November 
1997, CDR Monsanto underwent extensive Peer Review and was found to be 
a safe, capable provider. There is no basis to limit or revoke his 
privileges.
    Question. According to the Dayton Daily News, one of the most 
troubling cases cited in the Dayton Series is that of Dr. Gary Davis. 
Apparently, Dr. Davis had a history of malpractice before he entered 
the Army. Did the Army review Dr. Davis history prior to assigning him 
to be Chief of Obstetrics in Fort Benning? Was Dr. Davis' truthful 
about his professional history during his initial interviews?
    Army Answer. The standard physician procurement process was used to 
bring Dr. Davis into the Army. This process includes: verifying all 
graduate medical training, verifying that all licenses were 
unrestricted and that at least one license was current, obtaining 
letters of recommendation, obtaining an interview letter from a senior 
OB/GYN physician on active duty, obtaining Officer Evaluation Reports 
from prior military service, obtaining a current curriculum vitae, and 
filling out a health and profession status statement. All of these 
documents and verifications were obtained for Dr. Davis prior to his 
appointment.
    As with any process that relies in part on self-reported 
information, the accession procedures are vulnerable to willful deceit. 
Measures to assure the accuracy of self-reported information, including 
notifying the applicant in writing of the consequences of making false 
official statements are a part of the accession process. Dr. Davis 
answered in the negative to the question asking if he ever had 
professional privileges denied, withdrawn or restricted by any 
healthcare facility. In fact, his privileges had been suspended and 
never restored at Baptist Hospital in Arkansas (1979). On his C.V., he 
accounted for the period of time in 1978 by saying that he did locum 
tenens and a ``brief'' fellowship at the University of Alabama. We now 
know that time was spent on the housestaff at the Baptist Hospital 
where his privileges were suspended.
    Although Idaho verified his license as being current and 
unrestricted, we now know that he was under investigation in Idaho at 
the time of accession into the Army Medical Corps. There was no way for 
the Army to have known this at that time since Idaho would not release 
such information until action was completed. As a direct consequence of 
the Army's discoveries regarding Dr. Davis' inaccurate reporting of his 
own professional history, he was placed before an Army ``Show Cause'' 
board. The purpose of a show cause board is to recommend whether or not 
an officer should be retained in the face of certain negative 
performance criteria, which can include substandard performance of 
duty, misconduct, moral or professional dereliction, or actions clearly 
inconsistent with national security. After considering all of the 
evidence in Dr. Davis' case, the board, comprised of and presided over 
by line officers, recommended that Dr. Davis be retained on active 
duty.
    Question. Has the Army reviewed Dr. Davis' professional 
qualifications--particularly in light of the Dayton Daily News 
articles?
    Army Answer. The Madigan Army Medical Center Credentials Committee 
has fully reviewed Dr. Davis' professional qualifications and 
competency, both in light of the Dayton Daily News articles and as part 
of regular review, and cannot justify any adverse privileging actions. 
Dr. Davis' professional record since entry on active duty is totally 
devoid of any adverse findings.
    Question. How and why was Dr. Davis assigned as Chief of Gynecology 
and Urogynecology at Madigan Army Hospital?
    Army Answer. Dr. Davis was assigned as the Chief of Gynecology and 
Urogynecology at Madigan Army Medical Center due to his experience and 
his qualifications in the area of gynecologic and especially pelvic 
floor reconstructive surgery. Dr. Davis has done solid research in the 
area of pelvic floor injuries and pelvic floor reconstruction. This 
research is directly related to pelvic floor injuries that are much 
more common in females on active duty in the Army and are especially 
related to the achievement of airborne qualifications. This research is 
especially pertinent to women's health in the Army but has much broader 
general implications in the treatment of pelvic floor injuries and 
their sequelae.
    Question. The Dayton Daily News articles say that Dr. Davis was 
able to obtain the rank of full Colonel. Is this true?
    Army Answer. Dr. Davis was promoted to full Colonel while at 
Fitzsimons Army Medical Center. Given that there is no adverse clinical 
or military information in Dr. Davis, Army file, since his entry into 
Army active duty, withholding a promotion could not be justified.
    Question. Does the Surgeon General and the Army Medical Command 
make decisions about the promotion of its providers?
    Army Answer. Officer promotions in the United States Army are 
granted on the recommendation of a duly constituted board under 
provisions of Army regulations. These boards consider information in 
the officer's official personnel file for their recommendations. The 
Board's recommendation for promotion must then be approved by Congress 
and the president. Medical Command's input into this process is by data 
entered into the record, which accurately reflects an individual's 
professional and military performance.
    Question. Is Dr. Davis still assigned to Madigan? Did the 
credentialing committee review his professional story?
    Army Answer. Dr. Davis is currently assigned to Madigan Army 
Medical Center. His full clinical record was most recently reviewed on 
8 January 1998. Based on that review, the Credentials Committee 
continued Dr. Davis' full clinical privileges in obstetrics and 
gynecology.
    Question. According to the Dayton Daily News articles, Dr. Andrew 
Curtis Faire was linked in malpractice lawsuits to the deaths of four 
patients at William Beaumont hospital in Texas. Is he still practicing? 
Has he been disciplined? Have his clinical privileges been limited, 
suspended or revoked? What were the problems associated with these 
deaths? Has an external review group reviewed these cases?
    Army Answer. William Beaumont Army Medical Center (WBAMC) has 3 
documented cases in which Dr. Faire was involved where a death 
occurred. In 1984, Dr. Faire did not recognize the significance of an 
abnormal blood test, and the patient's eventual diagnosis of chronic 
leukemia was delayed. The Risk Management Committee determined that the 
delay in diagnosis did not change the patient's treatment or outcome. 
The second case involved a 67 year old retired soldier who died 
suddenly. He had been under Dr. Faire's care for ten years. In the 
months before the patient's death, Dr. Faire had treated him for muscle 
pains in the arms and shoulders. With the benefit of hindsight, the 
pains may have been due to angina pectoris, but this is speculative. In 
the third case, an abnormal chest x-ray was misinterpreted, leading to 
a delay in diagnosis of lung cancer. Dr. Faire's care of these three 
patients was fully evaluated by the Risk Management Committee, and the 
Committee decided that Dr. Faire had met the standard of care in each 
case. Dr. Faire continues to practice in the Adult Primary Care Clinic 
at WBAMC.

               Plan To Improve the Quality of Healthcare

    Question. In November, the Acting Assistant Secretary of Defense 
for Health Affairs (ASD/HA) Dr. Edward Martin, proposed a 13 point plan 
to fix the problems identified in the Dayton Daily News articles. In 
January, the plan was adopted and established as Department policy. The 
Services have been notified of the new policy and are working toward 
achieving the objectives of the plan.
    The plan includes the following objectives:
          1. Improve Reporting to the National Practitioner Data Bank 
        (NPDB);
          2. Eliminate the use of providers who do not have valid 
        medical licenses (such as the Oklahoma license);
          3. Establish Healthcare Consumer Committees;
          4. Improve communication with beneficiaries;
          5. Provide a Patient Handbook to inform beneficiaries about 
        the qualifications of healthcare providers;
          6. Improve Customer Satisfaction;
          7. Reestablish use of the Quality Management Report;
          8. Establish Centers of Excellence;
          9. Pursue full implementation of TRICARE;
          10. Phase out the use of General Medical Officers (recent 
        medical school graduates with only one year of training);
          11. Evaluate the Military Health Services System (MHSS) 
        weaknesses on a continual basis;
          12. Strengthen the National Quality Management Program; and
          13. Improve automation.
    The Dayton Daily News series criticized the Military Health 
Services System (MHSS) for not reviewing malpractice cases 
expeditiously and for blaming malpractice on the system in order to 
protect individual providers and doctors.
    Dr. Martin has acknowledged these weaknesses. His plan includes a 
three pronged approach to address the problem: (1) conduct an internal 
DoD Inspector General audit to determine the extent of the problem, (2) 
insist that the Services retire their backlog of cases, (3) use an 
external civilian panel to determine whether or not malpractice has 
occurred. So far, none of these goals have been accomplished. Moreover, 
the Services still have large numbers of cases requiring review.
    The Army has a backlog of 131 malpractice cases. Of these 131 
cases, 91 are awaiting external peer review and 40 are in final 
processing. The Navy has a backlog of 130 cases. The Air Force has no 
backlog at this time.
    How many medical complaint cases are currently pending? What is the 
size of the backlog of cases for the Army?
    Army Answer. There are 109 cases pending MEDCOM administrative 
processing as of April 15, 1998. MEDCOM has a backlog of 44 cases as of 
April 15, 1998 awaiting initial review.
    Navy Answer. Navy currently has 90 cases in various stages of 
review. By strict DoD definition there is no longer any backlog, as all 
cases are in some stage of review.
    Air Force Answer. The Air Force has a current balance of 51 paid 
malpractice claims that require final standard of care determination 
and potential NPDB reporting. Of these 51 cases, the majority (38) have 
at least one determination that Standard of Care was not met. These 38 
cases are in the process of being closed by the Air Force which 
involves: notification of the involved provider(s) to respond to the 
claim, Air Force Clinical Review/Medical Practice Review Board and Air 
Force Surgeon General review. The remaining 13 backlog cases include 8 
cases where standard of care is met, 1 case where standard of care is 
indeterminate, and 4 cases that have not been received by the Air Force 
Surgeon General's Office for review.
    The balance of backlog cases fluctuates each month, as legal 
closures are reported to the Air Force Surgeon General every month. For 
example, in January 1998, six Air Force claim payments were reported, 
and in February 1998, seven payments were reported.
    Question. Of the cases that have been completed, how many instances 
of malpractice can be attributed to an individual provider?
    Army Answer. Under the DOD agreement with National Practitioner 
Data Bank only those who also did not meet standard of care can be 
reported. This currently is 18 Health Care Providers of 46 cases closed 
since 15 Jan 98. In the process, either awaiting a response from the 
provider, or awaiting locating the provider we have identified 56 more 
providers to be reported to the National Practitioner Data Bank in 55 
cases. Remember that cases of either ``system'' error or standard of 
care met can be closed quickly while the NPDB process allows providers 
time to respond to a proposed submission, this necessitates a delay.
    Navy Answer. There are two documented instances where a provider 
has been the subject in more than one malpractice case.
    Air Force Answer. Approximately 40 to 50 percent of paid 
malpractice claims identify individual providers who breached the 
standard of care in a way relevant to the cause of the complaint. Of 
130 paid claims that have been closed since 1996, 46 cases (35 percent) 
identified providers who breached the standard of care, 81 cases (62 
percent) identified providers who met the standard of care and 3 cases 
(2 percent) were found to be indeterminate. Indeterminate means 
information was insufficient to make a standard of care determination.
    Question. Aside from reporting a practitioner to the national data 
bank, what disciplinary or remedial actions are taken to guarantee that 
the provider does not cause further harm? Who makes these decisions?
    Army Answer. In accordance with Joint Commission guidelines these 
decisions are local and reviews completed by the local Credentials 
Committees and Privileging Authority. These groups function the same as 
in a civilian hospital to limit privileging and thus practice of 
Providers who do not meet standard. The Joint Commission oversees this 
in all Army hospitals and all are in compliance.
    Navy Answer. The Navy does not wait until a malpractice claim is 
paid to take action. Any time a potentially serious incident occurs, a 
thorough investigation is done. If the investigation reveals that a 
provider's care deviated from the standard, the provider's actions are 
reviewed to determine why the breach occurred. If the deviation was 
because of lack of training, the provider is referred for training and 
supervised until competency is demonstrated. If the situation cannot be 
corrected through training or supervision, an appropriate privileging 
action is taken. All of this occurs usually before a claim is made and 
well before any payment is made. The MTF/DTF commander is responsible 
for initiating these actions.
    Air Force Answer. Reporting to the National Practitioner Data Bank 
(NPDB) for malpractice payment is not intended as a punitive event and 
does not require disciplinary action. The intent of reporting 
malpractice payments to the NPDB is to alert credentialing agencies, 
licensure boards and privileging entities of the provider's malpractice 
history. This information must be considered along with other relevant 
data when evaluating a practitioner's credentials. In addition, a copy 
of each NPDB report made by the Air Force is forwarded to the state 
licensing board(s) for the involved provider. These state licensing 
boards may conduct their own investigation and take a licensure action 
against the provider as they deem appropriate.
    Commanders at each medical treatment facility are expected to 
initiate appropriate administrative or military justice action when any 
adverse professional action involved illegal or unprofessional conduct 
that violates the Uniform Code of Military Justice.
    In addition to the above actions, Air Force headquarters notifies 
our medical treatment facility if a provider is found to have deviated 
from acceptable standards in more than two malpractice claims over a 
three-year period. The medical treatment facility commander is asked to 
review the practice of the provider and determine if further action is 
warranted. The commander is required to provide a report of actions 
taken to the Clinical Quality Management Division at the Air Force 
Surgeon General's Office.
    The Air Force has an effective program of peer review, credentials 
and privileging, a requirement for providers to receive continuing 
education, and a mechanism for removing providers from practice if 
needed. Commanders at each Air Force medical treatment facility grant 
privileges to providers and are authorized to initiate an adverse 
privilege action as needed. These actions may include complete removal 
from patient care duties (revocation of privileges) or a reduction or 
restriction of some patient care duties. Final review of adverse 
privileging actions lies with the Air Force Surgeon General. Adverse 
privileging actions are also reported to the National Practitioner Data 
Bank.
    Question. Of the cases that have been completed, how many instances 
of malpractice can be attributed to ``system'' problems?
    Army Answer. In 6 cases of 46 closed since mid January 1998 we have 
attributed the cause to a ``system'' error.
    Navy Answer. Less than 20 percent of malpractice cases completed 
are related to ``system'' problems.
    Air Force Answer. Very few cases of malpractice are attributed 
exclusively to system problems. A review of closed claims from 1996 to 
1997 revealed three cases of malpractice that were attributed solely to 
system problems. However, each claim is reviewed from a systems 
approach at the medical treatment facility, major command, and 
Headquarters Air Force to identify and analyze system problems that may 
have impacted the quality of patient care given. The identification of 
system concerns is in addition to the obligation to identify individual 
providers who are significantly involved in care at issue in the claim.
    Question. Who is accountable when it is deemed that the ``system'' 
is to blame? How do you correct problems in these instances?
    Army Answer. The commander is responsible. Current NPDB guidelines 
do not allow for the CEO of a civilian hospital, and thus by extension 
a military commander, to be entered for system errors. The NPDB was 
designed to prevent practitioners from escaping consequences of their 
actions by frequent relocations, thus it is a system designed for 
practitioners. The Joint Commission envisioned system errors in their 
mandate for a Risk Management process. They require all hospitals to 
review untoward events and seek to establish a pattern requiring 
change. The new Joint Commission requirement for ``Sentinel Event 
Monitoring'' will be even more helpful to the public at large in 
minimizing system errors and providing a safer environment in which to 
receive Health Care.
    Question. Who is accountable when it is deemed that the ``system'' 
is the blame? How do you correct problems in these instances?
    Navy Answer. Commanding Officers (COs) are accountable for what 
occurs within their facilities. System failures are investigated like 
any other incident. Once a determination is made that a problem is due 
to a ``system error'' the CO takes appropriate corrective action. All 
``system error'' investigations are reported to the Bureau of Medicine 
and Surgery (BUMED), if there is any chance that such an error could 
occur at another facility, BUMED takes steps to alert all COs of the 
potential problem and how to prevent it. Lessons Learned and Risk 
Alerts are disseminated to every Navy military treatment facility to 
prevent recurrence of any systems problems.
    Air Force Answer. A final review of all malpractice claims is 
conducted by the Air Force Surgeon General's Office. System problems 
are identified, if present, in addition to individual providers names. 
If all individual providers were found to have met the standard of 
care, then the system problems identified are analyzed to determine if 
they contributed to the harm the patient suffered. A medical treatment 
facility Quality Assurance review accompanies each claim. In this 
review, the hospital examines the case and identifies opportunities for 
improvement and lessons learned. These reviews assist in policy 
development. System problems identified, lessons learned, risk 
prevention strategies, and clinical alerts are disseminated frequently 
to all medical treatment facilities for education, risk prevention 
purposes, and to facilitate continuous quality improvement.
    Question. How many providers who currently practice in the Military 
Health Services System (MHSS) have been reported to the National 
Practitioner Data Bank?
    Army Answer. Provider reported to NPDB for adverse action--as of 29 
Apr 98: 94 total providers reported; 9 listed in the Centralized 
Credentials Quality Assurance Systems House; 1 Still on Active Duty; 8 
civilians.
    Providers reported to NPDB for malpractice--as of 29 Apr 98: 54 
total providers reported; 8 listed in the Centralized Credential 
Quality Assurance Systems; 7 still on active duty; 1 civilian.
    Navy Answer. The Navy has reported 78 physicians to the National 
Practitioner Data Bank for malpractice. 92 providers have been reported 
for Adverse Privileging Actions.
    Air Force Answer. 125 providers who have a National Practitioner 
Data Bank (NPDB) report currently practice in the Air Force Medical 
Service. This number was obtained from the Centralized Credentials 
Quality Assurance System which tracks when the medical treatment 
facility queries the NPDB and if the NPDB has information on file. 
There are 5,257 physicians and dentists on active duty, therefore 2.3 
percent of our current providers have been reported to the NPDB.
    Question. Has an audit by the DoD Inspector General been completed?
    Answer. The audit has been completed and the DoD Inspector General 
issued a ``Draft of a Proposed Evaluation Report'' on April 6, 1998. 
The DoD response to the report is due June 6, 1998.

      Eliminate the Use of Providers With Invalid Medical Licenses

    Question. The Dayton Daily News identified 77 doctors in the 
military with a special Oklahoma License. The license was issued to 
doctors who could not even meet the minimum requirement required to 
practice on civilians. According to the Dayton Daily News, ``Nearly all 
of the 77 military special licensees either failed the state licensing 
exam . . . or had no evidence that they ever took it.'' One military 
doctor, Dr. Dae Oh Kang, failed the U.S. Medical Licensing Exam (USMLE) 
30 times.
    Prior to the publication of the articles, was DoD aware of the 
existence of the special Oklahoma license?
    Answer. Prior to the publication of the articles, DoD was not aware 
of the continued existence of the special Oklahoma license.
    Question. What has been done or is being done about the special 
Oklahoma license?
    Answer. Providers with the special Oklahoma license have been 
removed from clinical practice or practice under direct supervision of 
a licensed physician. Providers have been given until April 1999 to 
obtain an unrestricted license from Oklahoma or from another state.
    Question. How many of these doctors are still in service? Are they 
supervised? Have they been removed from clinical practice?
    Army Answer. The Army Medical department has eight (8) physicians 
with Oklahoma Special licenses. None of these physicians practice 
medicine in any capacity at this time. All are in non-clinical duties. 
DOD (HA) has issued a policy to begin removal of these physicians from 
the service if they have not completed ordinary licensure by 30 April 
1999.
    Navy Answer. Seven Navy physicians with a special Oklahoma License 
remain on active duty. One out of the seven has requested retirement 
effective December 1, 1998.
    Yes, all seven are practicing medicine under a written plan of 
supervision, in accordance with Department of Defense and Bureau of 
Medicine and Surgery directives.
    No, the seven Navy physicians with a special Oklahoma License have 
not been removed from clinical practice.
    Air Force Answer. I presume you are referring to those physicians 
with an Oklahoma ``Special'' license. Currently, there are six (6) Air 
Force physicians with this license. The four that are in clinical 
positions were placed on supervised privileges, which means a fully 
licensed physician-supervisor is responsible for the medical care 
provided by the supervisee. The remaining two physicians are in full-
time administrative duties and are not treating patients.
    All Air Force physicians with the Oklahoma ``Special'' license are 
to obtain full licensure no later than April 30, 1999. This timeframe 
was established in order to allow for the minimal amount of time 
necessary to take all three parts of United States Medical Licensing 
Exam (USMLE), a requirement for full licensure.
    Question. What changes are being made to ensure that all physicians 
in the military medical system have a valid and unrestricted medical 
license?
    Answer. Policy memorandum ``Management of medical Licensure & 
Modifications of Reporting Procedures Regarding the National 
Practitioner Data Bank'' was signed and promulgated February 3, 1998. 
The memorandum restates DoD policy that all health care personnel must 
have a current, valid, and unrestricted license. The license issue has 
been discussed at the TRICARE Quality Council, the Risk Management 
Committee, and will be discussed at the Military Health System 
Executive Committee May 6, 1998. The Oklahoma Licensing Board decided 
not to convert any of the ``special'' military licenses to regular 
unrestricted licenses.

            Establishment of Healthcare Consumer Committees

    Question. Under DoD's new policy, Military Treatment Facility (MTF) 
commanders will establish committees of health care consumers. The 
purpose of these committees will be to assist the MTF commanders in 
identifying and solving problems. Special attention will be given to 
the needs of enlisted personnel. What is the Healthcare Consumer 
Committee? How do you expect the Healthcare Consumer Committee to 
improve quality and solve problems at the local level?
    Answer. The Healthcare Consumer Committee is composed of 
representatives from the military community served by the MTF. The 
purpose of the committee is to: 1) provide a forum for beneficiaries 
using the MTF to raise issues or provide feedback to the facility 
commander; and 2) enable the MTF commander and staff to inform the 
community of new programs, issues or proposed changes that may impact 
healthcare services at the MTF. Input from consumers is an essential 
component of consumer satisfaction. Without this input, those providing 
healthcare services will not know if they are successful in meeting the 
expectations of the consumers they serve.
    Question. Do you expect that these Committees will enhance the 
accountability of hospital commanders and providers?
    Answer. Yes. In facilities where this committee has been active 
we've found that the members take their position as representatives of 
the healthcare consumer community seriously. They actively solicit 
complaints and questions from their neighbors and coworkers and bring 
their concerns to the meeting. The membership expects answers that they 
can take back to the community. The MTF commander has the opportunity 
of hearing, first hand, how his beneficiaries or consumers feel about 
the facility's performance and where improvements in the system might 
be made.
    Question. What is being done to accommodate the concerns of the 
beneficiaries, particularly the enlisted community?
    Answer. Before concerns can be addressed they have to be brought to 
the attention of those, in authority, who are able to take action. The 
military rank structure does not normally lend itself to a free 
exchange of dialogue between officers and enlisted, particularly if 
they are assigned to different commands. Forums such as the Health Care 
Consumer Committee give the enlisted member a voice to express concerns 
and suggestions he/she may have about the healthcare system. Other 
forums for consumer input will vary depending upon the Service, and the 
command policy at the specific facility. Facilities usually have a 
designated patient representative officer (PRO) or ombudsman who serves 
as the consumer's advocate on a case by case basis. In addition to 
working with consumers individually, the PRO provides the command with 
a monthly summary of any trends or significant issues relating to 
consumer dissatisfaction. The advent of TRICARE has brought a renewed 
interest in consumer education. Consumers are asking for more 
information about their medical benefits, how to access the healthcare 
system, and how to take responsibility for maintaining their health.

               Improved Communication With Beneficiaries

    Question. DoD believes that open communication with its 
beneficiaries will improve the quality of care that is delivered. As 
part of this initiative, DoD plans to issue a ``Report Card'' on the 
quality of care being delivered at specific facilities. The Report Card 
information will also be posted on the Internet. DoD hopes to restore 
some confidence in the military medical system by using these measures.
    The Dayton Daily News series called into question the competence of 
the military medical system and eroded consumer confidence in the 
system. How do you intend to rebuild consumer confidence in the system?
    Answer. Educating consumers is the best way to restore confidence 
in the healthcare system. The educated consumer is better able to 
discern objective evidence of healthcare quality and put media 
allegations into their proper perspective. Evidence of quality may 
include: report cards, satisfaction surveys, facility accreditation, 
and board certification. Quality measurement is ongoing in the Military 
Health System (MHS). New initiatives, such as the MTF report card and 
the Healthcare Provider Directory will bring these measures to the 
consumer. Additionally, the Healthcare Consumer Committee will provide 
a forum for the consumer's concerns or complaints.
    In addition, with the creation of the TRICARE Management Activity, 
a special office dealing with Communications and Customer Service has 
been created. One of the principal functions of this office is to 
answer customer inquiries and examine trends in beneficiary concerns to 
effect rapid program corrections. While we have for several years had a 
Home Page with large volumes of TRICARE Program information available 
to our beneficiaries, we are redesigning it to allow a separate and 
specific entry point for beneficiaries to access important information 
on the TRICARE Program. I expect this redesign to be complete this 
summer and anticipate that the Internet address will be www.tricare.mil 
for those who desire to access it.
    Question. How do you plan to increase accountability and provide 
incentives to improve the quality of care? How will you hold hospital 
commanders and providers accountable for their actions? How will you 
provide information to the beneficiaries about the quality of their 
care? Will you explain the concept of the Report Card?
    Answer. To increase accountability and provide incentives to 
improve the quality of care, a Healthcare Consumer Committee will be 
established at all facilities to meet monthly with the hospital 
commander. The majority of representatives on the committee will be 
consumers and a priority will be placed on enlisted personnel issues.
    Hospital commanders are accountable for their actions based on many 
factors which include patient satisfaction, performance on Service 
specific Inspector General surveys, and performance on Joint Commission 
on Accreditation of Healthcare Organizations (JCAHO) surveys. Provider 
accountability is also based on multiple factors to include patient 
satisfaction, privileging based on past performance, quality of care 
reviews, and attendance of continuing education to maintain licensure.
    The MTF Report Card will be posted in a conspicuous place at the 
facility to enhance communication between patients and the MTF. The 
report card will address facility performance in key areas such as 
waiting times for major services, patient satisfaction, JCAHO survey 
results, and four of the grid element scores from the JCAHO survey. The 
Healthcare Provider Directory will also be available to patients to 
read about the qualifications and background of the provider they are 
seeing for their care.

                            Patient Handbook

    Question. The Dayton Daily News articles criticized the military 
for failing to provide information to patients about the qualifications 
and background of its doctors and providers. The Patient Handbook will 
include basic data on each provider, such as where they attended 
medical school, their licensure and board certification information.
    What will you do to increase confidence of beneficiaries regarding 
the qualifications of those who are providing their care? Will you 
please explain the idea behind the Patient Handbook? What kind of 
information will it provide? How will it help beneficiaries?
    Answer. The Healthcare Provider Directory (patient handbook) will 
be standardized throughout all DoD facilities. Although each MTF may 
include additional information, all MTFs must use the DoD prescribed 
template for the directory's cover and healthcare provider listing. The 
standardization is designed to assist consumers in recognizing this 
reference and encourage its use once matched with a PCM, referred to a 
specialty clinic, or assigned to a new duty and MTF location. The 
directory will provide the following information on each healthcare 
provider: name; medical school and year of graduation; residency 
location, specialty and year of completion; board certification; States 
where licensed; practice specialty; clinic where provider is located 
and clinic phone number. Through the use of the Healthcare Provider 
Directory, consumers will see that military physicians are highly 
educated and meet or exceed the qualifications of their civilian 
counterparts.

                     Improve Customer Satisfaction

    Question. DOD will continue to evaluate data such as access 
standards and customer satisfaction survey results to try to improve 
customer satisfaction. Specific data will be posted in medical 
facilities so that beneficiaries will understand what they can expect 
from their health care system. What measures are you taking to increase 
customer satisfaction with their health care?
    Answer. The Healthcare Consumer Committee has been established to 
give the hospital commander direct input from patient representatives 
about their concerns. The Annual Health Care Survey of DoD 
Beneficiaries is used to collect worldwide data from all beneficiaries 
eligible for military healthcare on access, satisfaction, health status 
and use of services. The Customer Satisfaction Survey is used to 
collect data monthly and focuses entirely on patient satisfaction at 
the military treatment facility level.
    Question. TRICARE should help manage resources better but what 
specific things do you intend to do to increase patient satisfaction on 
a facility to facility basis?
    Answer. To increase patient satisfaction on a facility to facility 
basis, limits on waiting times for acute, routine, and specialty 
appointments have been established to maintain reasonable access times 
for patients. Patients are also assigned to a primary care manager to 
facilitate continuity of care. The Healthcare Information Line has been 
instituted to allow patients to call in about healthcare topics, 
healthcare maintenance/guidance, or for advice when they or a family 
member are ill. As previously mentioned the MTF Report Card, Provider 
Directory, and Healthcare Consumer Committee have all been established 
as other means to increase patient satisfaction and communication.
    Question. What type of information will be posted in Military 
Treatment Facilities to help beneficiaries understand what they can 
expect with TRICARE?
    Answer. Military Treatment Facilities will post the MTF Report Card 
addressing waiting times for appointments, patient satisfaction results 
from surveys, the Joint Commission on Accreditation of Healthcare 
Organizations (JCAHO) Summary Grid Score, and four grid element scores 
from the JCAHO survey. Provider Directories will also be available for 
patients to review the qualifications and background of the providers 
they see.

                       Quality Management Report

    Question. DOD will reestablish the use of the Quality Management 
Report (QMR) to help evaluate the Military Health Services System 
(MHSS). A QMR that was published in 1996 was very effective in 
identifying weaknesses in the system. When will you reestablish the use 
of Quality Management Reports?
    Answer. The next Quality Management Report is anticipated to be 
published at the end of June 1998.
    Question. What type of evaluations will be done to identify quality 
problems? Will you please provide some examples?
    Answer. The Quality Management Report evaluates the areas 
comprising the National Quality Management Program for the Military 
Health System. Specifically the areas evaluated are licensure of 
providers, accreditation status and aggregate Joint Commission on 
Accreditation of Healthcare Organization (JCAHO) scores for medical 
treatment facilities, credentials and privileging issues, medical 
readiness, utilization management, National Practitioner Data Bank and 
Defense Practitioner Data Bank issues, and Special Studies for 
determining best practice at military treatment facilities.
    Quality problems are identified in the Annual DoD Quality 
Management Report by evaluating: licensure status of all practitioners, 
board certification rates for physicians, dental readiness for 
personnel based on oral health, the summary grid score average for DoD 
and problematic grid elements for DoD, JCAHO accreditation of hospitals 
and clinics in the Services, mammography certification in the Services, 
results of the Special Studies, access to care, patient satisfaction, 
and reporting to the National Practitioner Data Bank.
    Question. How do you intend to follow up on problems identified in 
these QMRs?
    Answer. Problems identified in the QMR are followed up with the 
Services three to six months after it's published to find out what 
actions the Services have taken to address the problems.
    Question. Is there a tendency at lower levels to ignore the results 
of these reports? What incentives are there for facility commanders to 
correct deficiencies or weaknesses in the system?
    Answer. The MTF commanders should be aware of the problems that 
exist at their level. The report puts the results in a more aggregate 
DoD perspective for them. The incentive for facility commanders to 
correct deficiencies or weaknesses in the system is based on 
accountability. Results of JCAHO survey are reported from the MTFs to 
their Surgeons General Office for review and monitoring. Health Affairs 
also receives reports from the JCAHO annually to monitor the summary 
grid score average for DoD and how compliant MTFs are with grid 
elements. This data is also shared with the Services. Commanders whose 
JCAHO survey results are poor will come under the scrutiny of their 
Surgeons General Office.

                         Centers of Excellence

    Question. The Dayton Daily News series identified several cases 
where mistakes were made because of a lack of experience--particularly 
with complicated procedures. (For example, Dr. John Owen Colonna, was a 
trainee at Walter Reed when he mistakenly severed a patient's vein 
during gallbladder surgery and the patient died. This was only the 
second time Dr. Colonna had performed the operation on a human being.)
    DOD intends to limit the number of complex procedures being done at 
small hospitals--where doctors cannot remain proficient in certain 
areas. Complex procedures will be done at Centers of Excellence where 
providers will have sufficient workloads to maintain competency.
    A significant number of malpractice cases involve more complex 
medical procedures. What are you doing to alleviate the risk associated 
with complicated medical procedures? Will you explain the concept of 
Centers of Excellence?
    Answer. Centers of Excellence are academic medical centers 
designated to perform complex procedures based on evaluation of their 
past performance and quality indicators, case volumes, and 
certification as a residency training facility. These facilities and 
those designated as Specialized Treatment Services facilities are the 
ONLY facilities permitted to perform procedures delineated in the 
January 24, 1997 HA policy Memorandum restricting the provision of care 
for specific complex DRGs. Among the procedures restricted by the 
January 24, 1997 memorandum are open heart surgery, neurosurgical 
procedures, total joint replacements, radical head and neck resections, 
major ovarian cancer operations, solid organ transplantation, and major 
abdominal surgical procedures. Centers of Excellence and STSs will 
concentrate the case volumes at a small number of facilities insuring 
larger case volumes at teaching facilities where the rigors of academic 
medicine promote practice at the highest intellectual and technical 
level. These facilities will be staffed to assure adequate training and 
supervision while providing valuable readiness training for all 
involved practitioners.
    Question. How may Centers of Excellence will be established? In 
what specialties?
    Answer. The total number of Centers of Excellence has not been 
determined, however, there are 9 established STSs and there will 
probably be only an additional 6-8 Centers of Excellence. The major 
difference between an STS and a Center of Excellence is the catchment 
area, STSs serve a 200 mile catchment area, Centers of Excellence have 
Non-Availability authority for only a 40 mile catchment area although 
they may take referrals from further away on a space available basis.
    The DRGs involved in Centers of Excellence designation are the same 
as for STS excepting solid organ and bone marrow transplantation, and 
major burns.
    Question. Will you maintain all specialties in-house or will you 
purchase certain capabilities from civilian providers?
    Answer. The DoD's primary medical mission is to maintain a medical 
force prepared for war. To that end we will maintain all specialties in 
house for which there is a wartime requirement. That requirement has 
been defined and redefined by the 733 study and update. We are 
currently analyzing our military medical manning to determine how best 
to train and maintain the force dictated by that study and will use 
those parameters to size our training programs and academic healthcare 
facilities. Clearly some capabilities will be available in only one or 
two locations and will be purchased from civilian providers in all 
other locales.

                       Implementation of TRICARE

    Question. Beginning this spring, TRICARE will be in effect in all 
regions of the country. Enrollees will be assigned to a Primary Care 
Manager (PCM) or a team of primary care managers. This should solve or 
improve issues of access, cost, continuity of care and portability of 
the TRICARE benefit.
    How will full implementation of TRICARE help solve the issue of 
access? What are the access standards under TRICARE?
    Answer. The full implementation of TRICARE will help solve the 
issue of access through availability of a network of civilian providers 
who augment the providers assigned to military treatment facilities 
(MTF). Establishment of the TRICARE Prime benefit offers guaranteed 
access to Prime enrollees within specific contractually mandated 
standards. These access standards apply to all enrollees, whether their 
Primary Care Manager (PCM) is assigned to the MTF or is a member of the 
civilian provider network.
    TRICARE Prime enrollees must have access to Primary Care Manager 
(PCM) services on a same-day basis. Access shall be available, by 
telephone or appointment, 24 hours per day, seven days per week. The 
wait time for an appointment for a well visit shall not exceed four 
weeks. The wait time for routine visits shall not exceed one week, and 
the wait time for acute illness shall not exceed one day. Beneficiary 
travel time shall not exceed 30 minutes from home to the site of care.
    TRICARE Prime enrollee travel time to speciality care shall not 
exceed one hour from home to the site of care (except for specialized 
treatment services (STS)). In the case of STS, beneficiaries must be 
informed of the requirements to use them prior to enrollment. The PCM 
making the referral will determine the appropriate waiting time for 
specialty care appointments. In no case, however, should appointment 
waiting time exceed four weeks.
    Question. How will the full implementation of TRICARE enhance the 
continuity of care (i.e., enabling a provider or team of providers to 
care for a patient over time)?
    Answer. TRICARE was designed to enhance continuity of care, 
especially for TRICARE Prime enrollees. It is based on a family 
practice/primary care model which permits a provider or team of 
providers to establish a long-term relationship with an individual, 
monitor that individual's health status over time, promote healthy 
lifestyles and wellness activities, as well as proactively address 
ongoing health concerns.
    Question. How will the full implementation of TRICARE help service 
members when they are required to make a permanent change of station? 
Will portability be an issue?
    Answer. Full implementation of TRICARE will improve service to 
active duty families when they are required to make a permanent change 
of station move. With the implementation of enrollment portability, we 
believe we took a major step in meeting the health needs of our 
families by permitting the active duty family members to remain 
enrolled while they are in transit. They retain a primary care manager, 
health care finder, information phone number, and TRICARE Prime cost 
shares from the time they leave their old duty station until they 
arrive at their new duty station and can be enrolled to a new PCM.
    Question. How will the full implementation of TRICARE help 
beneficiaries in getting information and assistance with their care?
    Answer. Each Managed Care Support contractor has established a 
nationwide toll-free telephone number that beneficiaries may call to 
obtain information and assistance. These toll free numbers are staffed 
around the clock, seven days per week. TRICARE Prime enrollees are 
issued a TRICARE Prime identification card that has the toll free 
telephone number printed on it. In addition, a toll-free Health Care 
Information Line is available to provide information on a broad variety 
of health related topics.
    Question. How will the full implementation of TRICARE improve 
quality of care?
    Answer. TRICARE will improve the quality of care our beneficiaries 
receive on several levels. First, providers must meet high credentials 
standards to be included in our networks. Our contractors must verify 
provider credentials before beneficiaries may be referred to them for 
care. Lead Agents can, and do, perform random provider credentials 
verification. Second, providers agree to participate in ongoing quality 
assurance programs in order to remain in our networks. Providers are 
also subject to monitoring by an independent national Quality 
Monitoring Contractor. Third, TRICARE Prime enrollees benefit from 
enhanced continuity of care, which permits a provider or team of 
providers to establish a long-term relationship with an individual, 
monitor that individuals' health status over time, promote healthy 
lifestyles and wellness activities, as well as proactively address 
ongoing health concerns.
    Question. What are your customer surveys saying about TRICARE? Do 
the beneficiaries believe that they are getting better service, care, 
and access?
    Answer. The Annual Beneficiary Survey is sent to all eligible 
beneficiaries each year. Early indications from the Annual survey show 
improvements in satisfaction with access to appointments, access to 
resources, and overall satisfaction. We also conduct a monthly 
Outpatient Customer Satisfaction Survey which is sent to individuals 
who visited a Military Treatment Facility (MTF). The monthly MTF survey 
is fairly new and it is too early to identify trends. The results 
received so far, however, are positive. They suggest that DoD's 
patients are at least as satisfied with care and access as patients 
enrolled in civilian HMOs. As directed by Congress, an independent 
study of this is underway and will be reported as soon as available.
    Question. Is the cost of TRICARE still at issue?
    Answer. The Department believes TRICARE is the most effective means 
of providing healthcare.

         Phase Out of General Medical Officer (GMO) Accessions

    Question. Over the next 3-4 years, DoD plans to phase out the use 
of General Medical Officers (recent medical school graduates with only 
one year of training). Historically DoD has used GMOs to fill the 
requirements of outpatient clinics and in branch clinics serving line 
units. The Navy, for example, uses GMOs extensively on ship. Fully 
trained physicians (medical school graduates with at least three years 
of post graduate training) will now be used to fill these billets. This 
is important because GMOs are often responsible for poor outcomes due 
to a lack of experience.
    To what extent have General Medical Officers (GMOs) been used to 
fill requirements in the past?
    Navy Answer. Currently, General Medical Officers (GMOs) with one 
year postgraduate training represent 19.9 percent of the Navy medical 
corps. Historically, the GMO percentage has ranged from 17 percent to 
20 percent. These GMOs fill 471 fleet marine and ship positions, 230 
flight surgery positions, and 60 undersea medicine positions.
    Question: What difficulties and problems have you had with respect 
to GMOs and adverse actions? Are they responsible for more malpractice 
cases than fully trained doctors?
    Navy Answer. This data is not routinely tracked in a manner that 
distinguishes between GMOs and specialty trained doctors regarding 
number of problems, adverse actions, and malpractice cases.
    Question. How do you plan to change the use of GMOs?
    Navy Answer. GMOs in isolated duty sites will be given priority for 
replacement by residency-trained primary care specialists as the GMOs 
rotate to graduate medical education or leave the Navy. The replacement 
of these GMOs has been directed to take place over four years. To 
accomplish this goal additional assets are required, including funding 
of the new Loan Repayment Program (LRP) and an increase in the number 
of Financial Assistance Program scholarships. These instruments will 
help to provide the Navy with fully trained physicians to serve in 
operational billets, training, comparable to their civilian 
counterparts. There will still be a few supervised GMO positions for 
individuals with only one-year postgraduate training. These positions 
will be used for medical corps members currently serving as GMOs and 
who wish to continue in that capacity and for individuals that leave 
residency training before completing the training program, but who 
still have obligated service time.
    What difficulties will this cause for the Services?
    Army Answer. Facts of Interest. GMOs have yet to complete residency 
training. They are roughly divisible into two broad groups: Those with 
short term obligation (2-4 yrs, mostly HPSP and ROTC) and those with 
long term obligation (4-11 yrs, mostly USUHS or combinations of 
obligations).
    Physicians who drop out of residency training after their 
internship, physicians who choose to forego residency training in favor 
of paying back their existing obligation, and unsuccessful intern 
applicants for residency training are the contributing factors 
increasing the number of GMOs.
    Accepting GMOs for residency training and separation of GMOs when 
payback of their obligation is complete are the primary mechanisms to 
reduce GMO numbers. Competition for residency training positions is 
very keen. Very qualified applicants are not always successful on their 
first try for residency.
    In the last few years, medical education has changed to specialty 
focused training requiring at least 3 years post graduate training 
(e.g., Family Practice). The Army does not make direct accessions of 
general medical officers. There will be increased costs subsidizing GME 
from 4-5 years to 6-7 years. More training programs for Primary Care 
Providers are needed.
    Summary. We need appropriate management of the ongoing pool of GMOs 
in the present system (residency drop-outs, physicians not wanting a 
residency, and unaccepted residency applicants). We need an increase in 
Primary Care residency training positions to replace the manpower 
shortage that is created. GME costs will increase. Recruitment will be 
more difficult. Remote areas will have fully trained/board eligible 
physicians.
    Navy Answer. The Navy has a greater percentage of GMOs than the 
other services; so more difficulties are expected as we replace 19.9 
percent of our Medical Corps. Some difficulties anticipated are:
     Rank Inversion: The initial replacement specialists will 
be a more senior rank than the current GMO.
     Increased Cost: GMOs are not entitled to specialty bonus 
pay. The replacement specialists will be entitled to more pay due both 
to rank and specialty bonuses.
     Recruiting: The replacement program will depend on the 
recruitment of a significant number of new civilian-trained 
specialists. Historically, recruiting utilizing Financial Assistant 
Programs (FAPs) has been adequate but there is no data to predict the 
performance of the Loan Repayment Program (LRP) as a new recruiting 
tool.
     Excess Endstrength: As new physicians are recruited while 
current GMOs still have a service obligation, temporary endstrength 
excess is projected. The degree of excess can be mitigated by phased 
and prioritized replacement of GMOs.
     Training: Graduate Medical Education will require 
infrastructure modification, while still complying with Residency 
Review Committee accreditation requirements, to accommodate the maximum 
number of trainees. Consideration will need to be given to greater use 
of full time out service training (FTOS) and fully deferred training 
positions; the latter will assist in reducing the endstrength excess. 
Provisions will be needed for military and medical indoctrination of 
the newly acquired civilian-trained physicians before they enter the 
fleet. Additionally, refresher training will be needed for providers 
returning from duty assignments where they have not had the opportunity 
to practice a broad range of care delivery in their specialty.
    Air Force Answer. Of the three Services, the Air Force has the 
highest proportion (86 percent) of physicians that are residency-
trained, and we're taking steps to further increase that proportion. 
Air Force discontinued recruiting General Medical Officers (GMOs) in 
FY97. However, we continue to access approximately 70 training-
obligated Health Professions Scholarship Program (HPSP) or Uniformed 
Services University of the Health Sciences (USUHS) GMOs per year 
because they fail to match, don't desire or resign from residency 
training. With respect to these training-obligated GMOs only, we do not 
concur that their practice is problematic. In our experience, HPSP and 
USUHS physicians are well qualified and highly successful in serving an 
initial tour as a GMO. This group is too valuable an asset in meeting 
our operational requirements for us to either waive or recoup training 
costs.
    We do intend to phase out career GMOs. A revised HPSP scholarship 
contract specifying a requirement for full residency training is being 
developed for implementation in FY99, with phase-in to be complete in 
FY03. Decisions to require recoupment or alternative service should be 
made on the basis of Service staffing requirements and the individual's 
circumstances. Additionally, beginning with Specified Period of Time 
Contracts and Career Reserve appointments executed in FY00, GMOs will 
not be extended beyond their initial training obligation except to 
enter residency training. Since even with recoupment, funds are not 
returned to our O&M account, we've projected a requirement of $880,000 
for HPSP/FAP scholarships and loan repayment grants to offset losses 
due to this change.
    The Air Force has already ensured that GMOs are not permanently 
assigned to bases without a colocated residency trained physician. 
However, GMOs frequently deploy in small units as the leader of a 
Squadron Medical Element. GMOs constitute nearly 30 percent of our 
force of Flight Surgeons, the physician specialty with the highest 
operational deployment tempo. This career field is understrength 
approximately 100 officers, and that situation will worsen by FY99. 
Thus, Air Force will definitely be unable to comply with any directive 
making GMOs nondeployable after 1999. By policy, we compel officers who 
fail to match, don't desire or resign from a residency program to enter 
the workforce as GMOs--approximately half are physically and clinically 
qualified and opt to serve as Flight Surgeons. We are and will continue 
to be heavily dependent on that source of physicians to support both 
peacetime and contingency operations. This source could be replaced 
with 70 four-year HPSP/FAP scholarships or loan repayment grants 
($6.16M per year) in FY04 in funding starts in FY99, however, we 
believe that the elimination of training-obligated GMOs is not in the 
best interest of the Service or our patients. In a general sense, we 
are concerned this could be used as a loophole to avoid federal 
service.

       Evaluate Military Health Services System (MHSS) Weaknesses

    Question. DOD feels that it can and must do a better job to 
evaluate the MHSS and correct weaknesses. One tool that will be used to 
help identify and evaluate the system is the Quality Management Report. 
How do you intend to improve DoD's methods of evaluating the Military 
Health Services System? What tools will help you evaluate the 
performance of the system? Are there new tools which you will use?
    Answer. DoD intends to improve its methods to evaluate the Military 
Health Services System (MHSS) using many tools. The newly instituted 
Risk Management Committee will monitor malpractice and adverse actions 
quarterly to keep a pulse on the number of malpractice payments, the 
number of reports submitted to the National Practitioner Data Bank 
(NPDB), timeliness of reports, any backlogs, and any problems reporting 
to the NPDB.
    The new External Peer Review Agency will review malpractice cases 
where a payment was made and the Surgeons General determination was 
standard of care met or a system problem.
    Quality Management Reviews from the Special Studies will continue 
to discover and provide detailed information on ``best practices in the 
MHSS'' and be distributed to the field in hard copy and a summary 
report on the Web.
    The Annual DoD Quality Management Report will be reestablished.
    The MHSS Performance Report Card will be used to continue to 
improve military treatment facility (MTF) commander's performance by 
monitoring indicators such as JCAHO accreditation/scores, medical 
readiness, and risk management.
    Question. How do you intend to follow up on issues and correct 
weaknesses in the system?
    Answer. DoD intends to follow up on issues and correct weaknesses 
in the system through use of the committees and mechanisms listed in 
question 126 and 127 which provide lines of communication between the 
Services and DoD for action.
    Question. It seems that DoD is reasonably proficient at identifying 
problems in the system. However, DoD seems less successful in 
correcting problems. What tools would help you to enforce corrective 
decisions and demand accountability in the system?
    Answer. The new Risk Management Committee, the new External Peer 
Review Agency mechanism, the MHSS Performance Report Card, and the 
Healthcare Consumer Committees will provide oversight to allow 
accountability and enforcement of corrective action.

           Strengthen the National Quality Management Program

    Question. Another way DoD hopes to improve quality is to cooperate 
with civilian health organizations and other government providers to 
determine the ``best clinical practices''. Under the National Quality 
Management Program, the best techniques and procedures (``best clinical 
practices'') are identified and guidelines are developed to help 
physicians enhance their skill and improve care.
    How do you plan to use quality management programs to identify 
``the best clinical practices'' and help physicians improve their 
skills?
    Answer. Each QMR portrays MHS performance in a specific product 
line (e.g., birth, cardiovascular, etc). The product line studies 
examine the processes of care across the MHS and the outcomes generated 
from these processes. Outcomes are measures of: the clinical outcome; 
the patient's functional status; patient satisfaction and cost. Best 
clinical practices are defined as the best outcomes achieved with the 
most effective use of resources. The medical treatment facilities 
(MTFs) with the best clinical practices for that product line (top 5%) 
are designated as ``best clinical practice MTFs''. The QMR compares the 
performance of each MTF to the performance of all other MTFs (and 
civilian facilities within that region); the DoD average performance; 
the Service average performance, and the performance of the best 
practice MTFs. Providers in one facility are encouraged to compare 
their processes of care to those in facilities having better outcomes. 
Providers can then contact those facilities to compare patient 
management practices, and use information they obtain to improve their 
practices and processes.
    Question. Once these best clinical practices have been identified, 
how do you make sure that hospital commanders and providers are 
following these procedures?
    Answer. Product line studies are published annually in the Quality 
Management Reviews and distributed to each Service, TRICARE Region and 
MTF. The facility commanders, and quality improvement coordinators get 
the information to the physician serving as the product line clinical 
service chief who in turn shares the information with his/her staff. 
We've found that getting the information down to the clinical service 
chief and staff physician level and also getting them to use the 
information was problematic in some facilities. The bedside/clinic 
physicians were either not receiving the information or, when they 
received it, they had difficulty interpreting the study findings and 
applying the information to their practice. Several initiatives begun 
during the past year have improved this situation: (1) DoD stepped up 
its physician education efforts through the combined efforts of DoD 
clinical staff, USUHS faculty and the National Quality Management 
contractor. Information on the NQMP studies have been presented at DoD 
TRICARE conferences, the TRICARE Quality Council, Regional TRICARE 
conferences, as a part of the Medical Executive Training Program and at 
facilities upon invitation from the MTF. In FY 1999 we hope to expand 
our physician education efforts by providing courses on using clinical 
performance outcomes data in the physician's practice. (see questions 
14 and 64); (2) We have linked the Joint Commission Accreditation 
requirement, ORYX, to the NQMP studies. (the DoD National Quality 
Management Contractor is also a Joint Commission approved ORYX 
Performance Measurement System vendor and the work done for the NQMP 
studies is also being used to meet the ORYX accreditation requirement) 
This has greatly increased the exposure of the NQMP studies and 
heightened interest from facility providers. (Both the NQMP studies and 
the ORYX initiative examine the patient outcomes generated as a result 
of the processes engaged to provide medical care. Under the ORYX 
program the procedures used to generate annual NQMP studies will also 
provide the facilities with quarterly feedback about their processes of 
care and the resulting outcomes. These outcomes are also submitted to 
the Joint Commission under the requirements of the ORYX program; (3) 
We've established several Joint-Service committees to direct the ORYX/
NQMP study programs, giving the Services & MTFs more ownership of the 
process and thus more ``buy-in'' into the process in return.
    Question. What teaching and training mechanisms, if any, do you 
have in place to encourage doctors to use best clinical practices?
    Answer. The MHS has several teaching/training mechanisms currently 
in place to encourage doctors to use best clinical practices: (1) The 
information is disseminated to each facility via the publication of the 
``Quality Management Review'' (QMR); (2) QMR findings are discussed at 
medical department and clinic level meetings within the facility; (3) 
Discussions of best clinical practices and the QMRs are often presented 
during regional TRICARE conferences and at the national TRICARE 
conference; (4) Each facility can contact FMAS, the external contractor 
performing the product line studies, for assistance in understanding 
the study report findings and their implications for physician 
practice; and (5) Educational sessions via VTC with the staff from 
USUHS.

                               Automation

    Question. DOD has been criticized often for its antiquated patient 
record keeping system which has led to improper or adverse care. 
However, DOD recognizes the problem and has budgeted nearly $275 
million for information systems management in Fiscal Year 1999. 
Advancements in Computerized Patient Record (CPR) keeping and data 
collection are key aspects of understanding a patient's needs and 
improving their care. The ability to send x-rays or other images via 
computer has also improved readiness. How much funding is in the budget 
to improve automation of patient records?
    Answer. There is $94 million in FY 1999 for Development and 
Deployment in the Composite Health Care System program to improve 
automation of patient records.
    Question. How much funding is in the budget to improve automation 
and enhance administrative functions for hospitals and clinics?
    Answer. There is $91.217 million in FY 1999 for three major 
programs to improve automation and enhance administration functions for 
hospitals and clinics.
    The Corporate Executive Information System has $36.0 million for 
delivering analytical decision support and executive information tools. 
This includes data warehousing, comparing and benchmarking between 
facilities, and conducting extensive research on at risk populations.
    The Health Standard Resources System has $6.716 million for Expense 
Assignment System IV deployments and $20.701 million for Defense 
Medical Human Resources System deployments. These include tools 
supporting medical personnel functions, labor costing, education and 
training, and readiness deployability tracking.
    The Tri-Service Infrastructure Management Program Office has $22.4 
million for Local Area Network upgrades and $5.4 million for system 
drops within facilities. This provides a standard, unified backbone 
capable of delivering connectivity to required users' desktops. It 
establishes LANs in medical facilities to support web-based 
applications and migrates facility networks from local-only systems to 
systems capable of handling standard Internet protocols.
    Question. How much funding is in the budget for telemedicine 
initiatives?
    Answer. The FY 1999 budget contains $1.4 million for telemedicine.
    Question. How will advanced communication and computer 
infrastructure improve readiness?
    Answer. The MHS must maintain a high state of medical readiness to 
support joint operations in a dynamic global environment. Requisite to 
providing health support is the ability to capture, maintain, and 
provide comprehensive, relevant, and accurate patient-centered 
information to support delivery of health service to the right person, 
at any time and at any location over the patient's lifetime. 
Telemedicine will be one of the key enablers. Our objectives include:
           Keep active duty forces on the job;
           Enhance and measure the health and fitness of the 
        fighting force;
           Reduce the forward-deployed medical footprint to 
        support lightning strike operations;
           Modify the MHS staffing model.
    As a direct result of the President's directive to create a new 
Force Health Protection Plan, Public Law 105-85 established the 
requirement for an improved medical tracking system for service members 
deployed overseas in contingency or combat operations. In response to 
this directive, a Personal Information Carrier (PIC) was identified. 
Successful implementation and utilization of the PIC will depend on the 
availability of an advanced communication and computer infrastructure 
worldwide.
    Advanced communications and computer infrastructure will enable 
medical units to improve force health protection by automated 
monitoring of the health risks of our deployed service members. In 
addition, when the Global Combat Support System becomes operational and 
available to medical units, they will have the capability to 
communicate with command and medical echelons vertically within their 
Service and horizontally across all Services.

                Uniformed Services Treatment Facilities

    Question. There are 10 Uniformed Services Treatment Facilities 
(USTFs), former public hospitals, that have agreed to provide health 
services on behalf of the Department of Defense. The budget provides 
for $380 million in spending for USTFs in 1999. This is a 4% increase 
over 1998 spending for USTFs. In general, DoD has not encouraged USTF 
enrollment to grow significantly because of two factors, both related 
to the high cost of USTFs.
    The first issue relates to ``unnecessary'' costs to the government 
that are incurred when a USTF member goes outside the USTF for care. 
(Service members who are enrolled with a USTF agree not to use other 
government health care services such as Medicare, CHAMPUS and MTFs. If 
they do, the government incurs additional and unnecessary costs. GAO 
estimated that unnecessary costs to the government could be as high as 
$38 million.
    The second issue relates to the higher per capita cost incurred 
when USTFs are used as opposed to CHAMPUS, TRICARE or Medicare. (For 
example, DoD estimates that the government will pay $6.5 million more 
for beneficiaries under 65 and $8 million more for Medicare-eligible 
beneficiaries who are enrolled in a USTF).
    Despite these factors, USTFs continue to press for additional 
annual enrollment allocations from DoD. This is primarily due to the 
fact that DoD contracts are not competitive and that DoD pays them a 
higher per capita rate than other plans do.
    The Department has had some trouble integrating USTFs into its 
system of TRICARE providers. How has this relationship changed with the 
advent of TRICARE?
    Answer. The Department and the USTFs worked jointly to develop 
Guiding Principles as a framework for the new contracts and supported 
the legislative language reflected in the statute. The Department 
developed a request for proposal (RFP) that incorporates the Guiding 
Principles, the statutory requirements, and many additional 
recommendations subsequently made by the USTFs. All the USTFs have 
entered into new contracts with the Department. The new contracts will 
enable enrolled beneficiaries to continue their current relationship 
with the USTFs and will more closely integrate the USTFs into TRICARE, 
offering a standard national benefit to all of our beneficiaries.
    The start of health care services for the designated providers' 
(formerly called USTFs) implementation of TRICARE Prime is as follows:
    Sisters of Charity of the Incarnate Word, Houston, TX, April 1, 
1998.
    Pacific Medical Clinics, Seattle, WA, April 1, 1998.
    Fairview Health System, Cleveland, OH, May 1, 1998.
    Johns Hopkins Medical Services Corporation, Baltimore, MD, June 1, 
1998.
    Martin's Point Health Care, Portland, ME, June 1, 1998.
    Brighton Marine Health Center, Boston, MA, June 1, 1998.
    Bayley Seton Hospital, Staten Island, NY, August 1, 1998.
    Question. Do USTFs abide by the same guidelines and rules as other 
TRICARE providers? What are the similarities? What are the differences?
    Answer. Although a single request for proposal was issued, each 
designated provider had the opportunity to negotiate different terms 
and conditions according to commercial items acquisition guidelines. 
Therefore each designated provider contract is different from the 
managed care support contracts and from other designated provider 
contracts.
    The designated providers' contracts all contain the same TRICARE 
Prime benefit and cost share structure, TRICARE Prime access standards, 
portability from one TRICARE Prime contractor to another, TRICARE Prime 
appeals and grievance procedures, and TRICARE Prime quality of care 
review requirements.
    The most visible difference is that the designated providers 
provide care to Medicare eligible beneficiaries electing to enroll, 
while other TRICARE contractors cannot. The designated providers are 
paid on a per member per month capitation, while the TRICARE managed 
care support contractors are paid a fixed price per year with a bid 
price adjustment. The MCS contractor is responsible for all CHAMPUS 
eligible beneficiaries in the MCS region while the designated provider 
is only responsible for beneficiaries that are enrolled in the USFHP. 
As a result, retirees and their dependents can enroll and disenroll in 
the designated provider program once per year during an open season, 
while the MCS contractors continually enroll members. Although these 
terms and conditions are the major differences in the programs, there 
are other minor differences in administrative terms and conditions as 
negotiated by each designated provider that do not affect the overall 
TRICARE program.
    Question. Is there a difference in cost per beneficiary? Are USTFs 
more expensive to the government?
    Answer. The USTF capitation rates reached under the new USTF 
designated provider contracts are markedly more cost effective for DoD 
than the rates in the previous agreements. However, for a variety of 
reasons, the capitation rates are still significantly higher than the 
amounts the government would have paid for these beneficiaries under 
the Managed Care Support (MCS) contracts or that Medicare would have 
paid under its managed care (risk HMO) program.
    First, as required under Section 726 of the FY 1997 Defense 
Authorization Act, DoD is required to pay each USTF an amount that 
reflects a blend of fee-for-service costs and managed care costs. 
Specifically, for the under age 65 beneficiaries, DoD's calculation of 
the USTF capitation rates blends the historical costs of Standard 
CHAMPUS with the historical costs of Managed Care Support contracts. 
Including the Standard CHAMPUS costs increases DoD's costs because the 
Standard CHAMPUS costs are higher than the MCS contract costs. 
Similarly, for Medicare beneficiaries, DoD's calculations of the USTF 
capitation rates blend the costs of beneficiaries in Medicare's fee-
for-service program with the costs in Medicare's managed care program 
(the Medicare risk HMO program). Again, because the costs in the fee-
for-service program are higher, this raises DoD's cost of providing 
benefits to Medicare beneficiaries in USTFs above what a Medicare risk 
HMO would have been paid. In short, DoD is paying more for the USTF 
managed care program than it would pay its MCS contractors or Medicare 
would pay a Medicare risk HMO because of the blending of fee-for-
service and managed care costs required under Section 726.
    Second, the USTF rates for Medicare beneficiaries exceed the costs 
Medicare would pay because DoD pays the USTFs an additional amount to 
provide outpatient prescription drugs for USTF Medicare beneficiaries. 
In addition, DoD is able to purchase drugs at very low prices (``DAPA'' 
prices). Because the USTFs are unable to purchase all of their drugs at 
DAPA prices, DoD is able to purchase drugs more cheaply than the USTFs. 
Thus, DoD must pay the USTF more for some drugs than it would have to 
pay for those drugs if they were purchased at an MTF. DoD also pays 
more at some USTFs than Medicare because DoD bases part of the 
capitation payment on Medicare's AAPCC level for the county of the USTF 
facility rather than on the AAPCC in the county of residence, which 
Medicare uses. Because the county of residence AAPCC is lower than the 
county of facility AAPCC at these USTFs, this means that DoD pays more 
than Medicare would.
    As a consequence of all these factors, the government pays the 
USTFs more for health care services than it pays the MCS contractors or 
Medicare risk HMOs. DoD estimates that it will pay an additional $6.6 
million for persons under age 65 and the government will pay an 
additional $15.2 million for persons age 65 and over during the first 
option period of each of the USTF contracts (generally May 1, 1998-
April 30, 1999). DoD will pay an additional $193 million for persons 
age 65 and over during the first option period of the USTF contracts. 
If the USTF programs did not exist, Medicare would pay the health care 
costs of these beneficiaries, not DoD. Thus, the additional amounts 
that DoD would pay are equal to the total capitation payment paid by 
DoD.
    Question. Some USTFs believe they should be able to enroll as many 
military beneficiaries as possible. What is your view?
    Answer. The Department must operate all programs within 
constraints, including the designated provider program. One of those 
constraints is the availability of funding. The Department is allowing 
each designated provider to market and enroll all current enrollees and 
all other eligible beneficiaries electing to enroll in the designated 
provider program. Although we are allowing market conditions to dictate 
enrollment, we also require the designated provider to obtain approval 
of the applicants prior to enrollment as a safety measure to ensure 
there is funding available for all applicants and current members. The 
Department believes that the contract and market conditions provide 
sufficient controls on enrollment, but believes the statutory 
limitation of 10 percent growth per year is necessary to ensure that 
the Department is not placed in an anti-deficiency situation as 
occurred with open enrollment in October 1996. The statutory limitation 
could allow for a potential growth of 50 percent over the five-year 
life of the designated provider contracts.
    Question. Some USTFs believe they should have a specific 
appropriation. What is your view? Should USTFs be guaranteed a certain 
amount of funding? If now, why not?
    Answer. The designated providers have each signed new contracts to 
provide the TRICARE Prime benefit and compete with the managed care 
support contractors and the military treatment facilities for a share 
of the beneficiary population in those geographic areas serviced by the 
designated providers. It is the Department's position that the Defense 
Health Program Budget (without a separate line items for USTFs) is the 
appropriate vehicle to fund the TRICARE program. As the market share of 
the MTFs, the MCS contractors, and the designated providers change, 
funding resources can be applied as needed to ensure the beneficiaries 
receive quality care under the TRICARE program.
    The original intent in creating the USTFs was to provide them the 
opportunity to compete as private entities in the health care market 
place. The Department has entered into contracts, not to exceed 60 
months, with each designated provider allowing them the opportunity to 
openly market and enroll beneficiaries under the TRICARE program. 
Enrollment with those designated providers that have completed the 
process has resulted in a decrease in enrollment for some designated 
providers and an increase in enrollment for others. To guarantee 
specific funding for the designated providers would remove the ability 
of the Department to manage the Defense Health Program and allocate 
resources where they are most effective for the beneficiary population. 
It is the Department's intent to allow the designated providers to 
compete with other contractors and it is our intent to allocate the DHP 
budget allowing beneficiary choice. The designated providers will be 
funded for all beneficiaries electing to enroll in their program, 
within the limitations agreed to in the contracts.
    Question. What is your current estimate regarding the amount of 
double billing that is going on? Will that continue with the 
implementation of TRICARE? How can these costs be avoided?
    Answer. The Department matched Defense Enrollment Eligibility 
Reporting System (DEERS) records on enrollment in the USTF program 
against the Medicare files for the period of October 1, 1993 through 
December 31, 1995. The results indicate that Medicare paid $30.7 
million in care for enrollees of the USTF, while DoD was paying a 
capitation to the USTF for the enrollee's comprehensive care. The 
Department and the USTFs are in the process of analyzing the data match 
to determine which Medicare billings were authorized and which Medicare 
billings for care were inappropriate.
    The Department has placed provisions in the designated provider 
contracts to manage the Medicare leakage within their networks, but 
this will not stop leakage by enrollees who go out of network to a 
Medicare provider for their care. We do expect the leakage to be 
reduced as a result of the contract provision. To completely stop the 
Medicare leakage problem, the Health Care Financing Administration 
(HCFA) would need to flag the Medicare file to ensure that care 
provided designated provider enrollees and billed to Medicare is 
appropriate prior to the release of payment by HCFA.

                Sierra Health Services Tricare Contract

    Question. There has been some concern about the recent award of a 
$1.3 billion contract to Sierra Health Services, a Nevada based 
company. Concern stems from two matters that have received attention 
since the contract award.
    First, according to an article published in the Las Vegas Review 
Journal, the CEO of Sierra Health Services (SHS), Dr. Anthony Marlon, 
was convicted of fraud in connection with a contract to provide 
healthcare coverage to federal employees under the Federal Employees 
Health Benefit Plan (FEHBP).
    Second, after the award for Region 1 was announced, Dr. Marlon was 
quoted in the Las Vegas Review Journal stating that: ``One of the 
reasons we [submitted a bid], quite frankly is we have no business on 
the East Coast . . . the government will fund our expansion. . . .''
    He went on to say: ``If it costs more to treat the CHAMPUS 
beneficiaries than is anticipated, the government will pick up 80 
percent of the cost overrun.''
    There has been some concern about the fact that DoD awarded a $1.3 
billion dollar contract to Sierra Health Services, a company whose CEO 
has, according to an article in the Las Vegas Review Board, been 
convicted of fraud in connection with another federal contract. Is this 
true? If true, is this consistent with Administration efforts to crack 
down on Healthcare and Medicare fraud? Why should DoD award a $1.3 
billion contract to a company that has been convicted of defrauding the 
federal government?
    Answer. In September of 1997, DoD awarded the TRICARE Managed Care 
Support contract for Region 1 (11 northeastern states, the District of 
Columbia, and portions of Virginia/West Virginia) to Sierra Military 
Health Services, Inc. (Sierra Military). Dr. Anthony Marlon serves as 
the Chairman of Sierra Military's Board of Directors, and has been the 
CEO and Chairman of the Board of the parent company, Sierra Health 
Services, since its inception in June of 1984.
    During 1988, the Office of Personnel Management (OPM) conducted a 
routine audit of Sierra Health Services' Health Maintenance 
Organization (HMO), Health Plan of Nevada, Inc., regarding its contract 
to provide health care coverage to federal employees in Nevada under 
the Federal Employees Health Benefits Program (FEHBP) for contract 
years 1984-1988. The audit included a finding which questioned 
approximately $515,000 of the HMO charges. In addition, a separate 
investigation was conducted by the U.S. Attorney for Las Vegas into 
allegations that false and misleading information had been provided to 
OPM during 1988.
    In February of 1991, the U.S. Attorney's investigation ended with 
an agreement that Dr. Marlon plead guilty to a misdemeanor offense of 
knowingly causing to be provided to OPM a false certificate that the 
HMO was utilizing community rating in setting the rates of the 1988 OPM 
contract. Dr. Marlon was sentenced to 24 months probation and fined 
$25,000. He was also sanctioned by Sierra Health Services and 
relinquished 6 months compensation with the company.
    Sierra Health Services agreed to pay OPM $434,000 in overcharges 
and to provide free medical services having a value of $500,000 to the 
indigent and uninsured population in the Las Vegas area. No other 
criminal charges were filed against Sierra Health Services or its 
employees. Neither Sierra Health Services nor any of its subsidiaries 
has been the subject of contract suspension or debarment proceedings by 
the federal government. In fact, both OPM and the Health Care Financing 
Administration (HCFA) have renewed contracts with Sierra's HMO, Health 
Plan of Nevada, Inc., on a regular basis and it remains one of the 
largest FEHBP insurers in Nevada. Also, effective October 1, 1996, it 
was one of 6 HMOs in the country to be selected by HCFA to operate a 
second generation social HMO program designed to provide enhanced 
health care services to certain Medicare Risk enrollees. Finally, the 
Office of the Inspector General of the Department of Health and Human 
Services determined that the 1991 misdemeanor plea did not preclude the 
State of Nevada from contracting with Sierra's HMO for the Medicaid 
program. Therefore, effective April 1, 1997, it began providing 
services under Nevada's Managed Medicaid Program.
    All of the above information was furnished to DoD and reviewed 
during the evaluation of competitive proposals for award of the TRICARE 
Region 1 contract. In addition, Sierra Health Services has implemented 
a Federal Healthcare Contract Compliance Policies and Procedures Manual 
to ensure contractual, statutory, and regulatory compliance with all 
federal health benefits contracts. It has also adopted a Code of Ethics 
applicable to all company employees that requires compliance with the 
letter and spirit of all laws and regulations designed to ensure 
integrity in contracting with governmental customers at the federal, 
state, and local levels. In view of the totality of the circumstances, 
it was determined that no legal basis existed to exclude Sierra 
Military, a subsidiary of Sierra Health Services, from consideration of 
contract award.
    Question. Dr. Marlon is quoted in the Las Vegas Review Journal as 
saying that he viewed Sierra's TRICARE contract as a means to fund 
``our expansion to the East Coast.'' Does it concern you to hear these 
comments?
    Answer. The comments have to be assessed in context of the 
competitive process under which the TRICARE contract was awarded. 
Because price was a significant factor in distinguishing between 
competitive proposals, DoD was assured of awarding a contract with 
reasonable costs. In fact, Sierra Military Health Services, Inc., 
submitted the lowest evaluated contract price. Obviously, most 
companies achieve benefits in commercial business from economies of 
scale resulting from performing government contracts. The same 
economies of scale, in return, tend to produce lower contract prices 
for the government. Therefore, the cited comments could apply to the 
potential expansion of business for any awardee of a government 
contract.
    Question. Dr. Marlon also stated in that article that the 
government would incur all or most of the risk of a cost overrun. Does 
this disturb you?
    Answer. The government's risk of a cost overrun for the TRICARE 
Region 1 contract is the same as under all other TRICARE Managed Care 
Support contracts. Under the full and open competition process used to 
select the contractor, the proposed health care costs of each competing 
offeror were subjected to a cost-realism analysis to determine the 
ability of the offeror to perform the contract and to project the most 
likely actual health care costs that each offeror would incur under 
pricing assumptions suggested by the offeror and validated by the 
government as reasonable and realistic. Once the reasonableness and 
realism of each offeror's price was determined, the sensitivity of each 
bid price to potential cost overruns and underruns was assessed an 
estimated risk premium. That risk premium, among other factors, was 
added to the offeror's bid to establish the adjusted proposed health 
care price. Therefore, an offeror's price had to be determined to be 
realistic and the contractor had to be determined reasonably capable of 
performing the contract as bid in order to qualify for contract award.
    Because of the high level of financial risk, along with the 
rapidity of change in the health care services environment, the 
government established a tiered risk sharing feature which is common to 
all TRICARE Managed Care Support contracts. Under the contractual 
provisions, the contractor and DoD share in both gains and losses; 
i.e., the difference between the costs proposed by the contractor and 
determined by the government to be reasonable and realistic and the 
actual health care costs experienced under the contract. Any contract 
period resulting in a cost underrun of 20 percent or less will result 
in the government sharing 80 percent of the underrun; any cost underrun 
in excess of 20 percent will result in a government share of 90 
percent. Alternatively, any cost overrun will be covered by the 
contractor's forfeiture of its profit and incurring all losses up to 
101 percent of the contractor's adjusted proposed health care price. 
Any overrun exceeding the 101 percent threshold will be additionally 
shared 20 percent by the contractor until all cumulative gains under 
the contract and all equity committed under the contract have been 
forfeited by the contractor.
    Excluded from the above risk sharing arrangement is any 
``capitated'' costs in a contractor's proposal. In Region 1, Sierra 
proposed a significant amount of health care costs under capitated 
rates. Therefore, any gains or losses resulting from the guaranteed 
capitation portions of the contract are not shared by the government.
    Question. I understand that the Sierra award has been protested. 
What is the nature of the complaint? Is it routine?
    Answer. The TRICARE contract award for Region 1 was protested to 
the General Accounting Office (GAO) by an unsuccessful competitor, 
Foundation Health Federal Services, Inc. Given the significant dollar 
value of the TRICARE contract, protests of contract award are routine 
business practice. On February 12, 1998, GAO issued a decision 
sustaining the protest. The major finding by GAO was that DoD failed to 
adequately disclose the weights of the significant evaluation factors. 
Although additional minor findings were made, such findings were not 
determinative of the outcome. Under GAO procedures, DoD will file a 
request for reconsideration of the protest decision, seeking reversal 
or modification of the decision based on cited factual and legal 
errors. No time period is established for GAO's response to the request 
for reconsideration.

         Regions 2 and 5 TRICARE Contract Award Anthem Alliance

    Question. Anthem Alliance was awarded a $3 billion TRICARE contract 
to provide health care for regions 2 & 5. The contract was protested 
and GAO made a preliminary ruling against Anthem Alliance. A final 
determination has not yet been made.
    Dr. Martin, will you please tell us about the protest? Which 
company protested the award and why? Is there anything unusual about 
this?
    Answer. Award of the TRICARE contract for Regions 2&5 to Anthem 
Alliance for Health, Inc. was protested to the General Accounting 
Office (GAO) by two unsuccessful competitors, Foundation Health Federal 
Services, Inc., and Humana Military Health Services, Inc. Given the 
significant dollar value of the TRICARE contract, protests of contract 
awards are an expected business practice.
    Question. When do you expect GAO to make a final decision on the 
award?
    Answer. On February 4, 1998, GAO issued its decision sustaining the 
protests. The major finding by GAO was that DoD failed to adequately 
disclose the weights of the significant evaluation factors. Although 
additional minor findings were made, such findings were not 
determinative of the outcome. Under GAO procedures, DoD will file a 
request for reconsideration of the protest decision, seeking reversal 
or modification of the decision based on cited factual and legal 
errors. No time period is established for GAO's response to the request 
for reconsideration.
    Question. How long will TRICARE be delayed if the protest is 
upheld?
    Answer. The Department is working to complete nationwide 
implementation of the TRICARE program while being responsive to any 
final GAO decision. Anthem will complete contractual tasks for 
transitioning Regions 2&5 to the TRICARE managed care program as 
originally scheduled. Actual delivery of health care by the contractor 
will commence May 1, 1998. Following receipt of the GAO reconsideration 
decision, DoD will make a reasoned analysis and undertake appropriate 
action regarding any remaining GAO recommendation. While the 
possibility exists that a transition to another contractor may occur 
within 2 years should GAO not act favorably on DoD's request for 
reconsideration, interim contract performance will avoid delaying 
TRICARE implementation in Regions 2&5.

                 TRICARE Contract ``Resource Sharing''

    Question. As a means of maximizing resources, TRICARE contractors 
initially agreed to provide supplemental civilian personnel, equipment 
and supplies to military hospitals and clinics. This concept, called 
resource sharing, was supposed to provide about $700 million in savings 
over 5 years.
    However, because of a lack of clear program policies, neither DOD 
nor its contractors now believe that these savings are possible. This 
means that the original contract bid prices were too low and that DOD 
will need to make upward price adjustments.
    DOD estimated that resource sharing would account for approximately 
$700 million in savings over 5 years. Are these estimates still valid? 
Why is the Department unable to count on these savings?
    Answer. Prior to the award of the MCS contracts for Regions 7 and 8 
in April 1997, DOD estimated that over the five year life of the MCS 
contracts then in operation, resource sharing would result in nearly 
$700 million in cost avoidance. This estimate was based on the 
assumption that resource sharing opportunities of the magnitude 
experienced during California/Hawaii CHAMPUS Recapture Initiative would 
be the norm in future contracts. The MCS contractors also believed this 
to be the case and committed aggressive savings levels, with the 
assumption that resource sharing would be the primary vehicle for the 
Government to recapture CHAMPUS. Cost saving investments for all 
operating TRICARE regions less Regions 7 and 8, currently amount to 
over $82 million annually (which equates to $410 million over five 
years), and resource sharing investments continue to grow. However 
resource sharing remains only one of many tools to recapture CHAMPUS 
costs and MTFs had already taken many managed care steps to recapture 
CHAMPUS costs even before the MCS contracts began. TRICARE continues to 
save money, but through different mechanisms than initially 
anticipated.
    Question. What are some of the problems with resource sharing? What 
is being done to adjust current and future contracts? Will you explain 
alternative financing?
    Answer. Part A--The return on a resource sharing initiative is tied 
to the Bid Price Adjustment (BPA) process within the MCS contracts. 
This is a complicated process that must balance an uncertain level of 
risk associated with current proposals with a long-term payoff. 
Resource sharing agreements also depend on mutual agreement between the 
MTF commander and the contractor. In an effort to gain more confidence 
in the expected results of an agreement, proposals have often been 
over-analyzed and agreements delayed for lack of complete data. In 
Regions 3 and 4, MTFs embraced managed care by trying to recapture 
CHAMPUS costs on their own (mainly through direct contracting efforts) 
without waiting for the MCS contract to begin. In these cases, doing 
the right thing had the unexpected impact of reducing resource sharing 
opportunities for the contractor because MTF CHAMPUS savings 
initiatives preempted what could have otherwise been resource sharing 
savings.
    Part B--DOD is making changes to current and future MCS contracts 
regarding resource sharing. The TRICARE Lead Agents and the contractor 
for Region3/4 have entered into a process to maximize current resource 
sharing opportunities within the region. Part of this process involves 
reviewing individual direct contract initiatives designed to recapture 
CHAMPUS to see if they are appropriate for resource sharing. The MCS 
contracts for Regions 1, 2 and 5 will have far less emphasis on 
resource sharing than earlier contracts. The next generation of MCS 
contracts, MCS 3.0, will have no resource sharing provisions; instead 
there will be a simplified form of resource support whereby MTFs can 
obtain needed manpower through a streamlined task order process that 
does not require detailed analysis or savings goals on the part of the 
contractor.
    Part C--Revised financing (previously referred to as alternative 
financing in its development stage) is an approach to managed care 
contracting that gives MTF Commanders in TRICARE Regions 1, 2 and 5 
more flexibility and responsibility regarding beneficiaries who chose 
to enroll in TRICARE Prime with an MTF Primary Care Manager.
    There are four goals to the MCS revised financing approach:
           Enabling MTFs to manage their own Prime enrollees 
        (i.e., those with military PCMs) without concern for Bid Price 
        Adjustment interactions;
           Providing MTFs with all funding to invest in the 
        care of their Prime enrollees, in return for assuming full risk 
        for these enrollees;
           Maintaining the overall MTF-contractor partnership 
        through a continued sharing of risk for all CHAMPUS eligibles 
        not enrolled with MTF PCMs; and
           Improving the ``real-time'' cost impact of 
        management decisions through more frequent formal bid price 
        adjustments.
    Under revised financing, the MTF will receive funding for those 
CHAMPUS eligibles who enroll in Prime with an MTF PCM, and the MTF will 
have sole financial responsibility for these CHAMPUS eligibles (i.e., 
the MCS contractor will not be at risk for the MTF's enrollees). For 
any civilian care required for the MTF's enrollees, the MTF will pay 
the contractor at the individual network providers' rates (i.e., the 
discounted rates). The contractor will track those claims paid for the 
MTF's enrollees separately from other TRICARE claims, and the MTF will 
reimburse the contractor on a monthly basis.
    The contractor will continue to be at risk for all other CHAMPUS 
eligibles (those who enroll in Prime with civilian PCMs and all 
beneficiaries in Extra and Standard), with bid price adjustments and 
risk sharing provisions applicable only to these non-MTF-enrollees. 
From a budgetary perspective, initially the MTF's budget will include 
O&M, MILPERS, and the portion of TRICARE (CHAMPUS) associated with the 
MTF's Prime enrollees.
    Quarterly bid price adjustments will account for changes in the 
contractor's at-risk population and MTF utilization by that at-risk 
population.
    Question. Will alternative financing provide any savings? If so, 
what are your estimates?
    Answer. The TRICARE MCS contracts are projected to reduce costs in 
Regions 1, 2 and 5. In accordance with Congressional cost certification 
requirements for expansion of DoD's Managed Care Support (MCS) program 
into Regions 1, 2 and 5, DOD analyzed the cost impact of the MCS 
contract on both CHAMPUS costs and direct care costs over the life of 
the contract. This analysis indicated that the Region 1 MCS contract 
will reduce overall MHS costs in the region by approximately $20 
million over the life of the contract, relative to MHS costs in the 
absence of the contract. The same analysis for Region 2/5 indicated 
that the Region 2/5 MCS contract will reduce overall MHS costs in the 
region by approximately $190 million over the life of the contract. 
These revised cost estimates have been incorporated in the POM 
requirements for the TRICARE program.

     Food and Drug Administration Investigation of Navy Blood Bank

    Question. According to the Washington Post, after a three month 
investigation, the Food and Drug Administration (FDA) forced the 
closure of Bethesda's blood bank due to ``sloppy management practices 
and rampant bookkeeping errors that sent suspect blood into the 
military blood supply, including units not thoroughly tested for the 
AIDS virus.''
    Among other things, the FDA reported that two patients receiving 
transfusions received the wrong type of blood last year. The FDA also 
reported that 126 units of blood were left in the blood bank even 
though they had not been fully screened for the AIDs virus. The mistake 
was not noticed for nearly a year, and 33 units of blood remain 
unaccounted for today.
    Admiral Koenig, what happened that caused the closure of the blood 
bank at Bethesda Naval Hospital?
    Navy Answer. The FDA conducted the annual inspection of the 
National Naval Medical Center Blood Bank in September through November 
1997 and cited 77 observations in reference to compliance issues. 
Analysis of these observations identified: (1) lack of process control 
in procedures, training, and documentation (2) failure to follow 
Standard Operating Procedures, (3) lack of adequate supervision. The 
Commander, National Naval Medical Center discontinued all blood 
collections on the same day that the FDA reported its finding. A new 
management team has established a plan of action and is currently 
achieving milestones to correct the problems.
    Question. Why did it take the FDA to identify and uncover the 
``sloppy management and rampant bookkeeping errors'' that sent suspect 
blood into the military blood supply? Why didn't the Commander of the 
hospital and the senior staff know about these serious problems?
    Answer. The FDA's observations of non-compliance reflected issues 
previously identified. These issues were being addressed by the senior 
management at the time of the FDA inspection. Correction of the process 
problems required time and dedication of resources to properly correct 
the root cause. There was no ``suspect'' blood placed into the military 
blood supply. There are currently two tests required by the FDA for the 
early detection of Human Immunodeficiency Virus (HIV), i.e. HIV 
antibody and antigen. The frozen blood units, which were not tested by 
the newly licensed (March 1996) HIV antigen test, were restricted for 
use. All these units, however, had been tested for HIV antibody and 
found to be negative.
    Question. What is being done to correct the situation? Will the 
blood bank remain closed?
    Answer. The Commander, National Naval Medical Center discontinued 
all blood collections on the same day that the FDA reported its 
finding. A new management team has established a plan of action and is 
currently achieving milestones to correct the problems. The blood bank 
consists of the Transfusion Service and the Blood Donor Center. The 
majority of the FDA's observations were in the Blood Donor Center. The 
Blood Donor Center will remain closed until all process problems have 
been corrected. The Transfusion Service has remained operational during 
this period by obtaining blood products from other sources.

                            Anthrax Vaccine

    Question. On December 15, 1997, Secretary of Defense Cohen 
announced a plan to systematically vaccinate all U.S. military 
personnel against the biological warfare agent anthrax. The 
vaccinations will begin in the summer of 1998 and will be administered 
to approximately 100,000 military personnel assigned to high threat 
areas. According to DOD, the vaccine is FDA licensed and has fewer side 
effects than the flu or typhoid vaccines. However, there have been 
questions about the safety of administering the vaccine.
    The Defense Health Program does not include funding for vaccinating 
our troops to protect them against anthrax. Funding is included in the 
Chemical and Biological program.
    Is there any reason to be concerned about the Anthrax vaccine? Is 
it safe?
    Answer. There is no valid reason to be concerned about the safety 
of the anthrax vaccine. The anthrax vaccine is a licensed vaccine, 
approved by the U.S. Food and Drug Administration (FDA) since 1970. It 
is a formalin-inactivated vaccine, which means that it used dead or 
killed bacteria as opposed to live bacteria, which have a higher risk 
of side effects. In this respect, it is very similar to the Diphtheria 
vaccination (DPT) that all children in the U.S. receive before they can 
enter public school. It has been routinely administered in the U.S. to 
veterinarians, laboratory workers, and livestock handlers for more than 
25 years and has an excellent safety record. No reports of significant 
adverse effects have been reported by the producer of the vaccine, the 
Michigan Biologic Products Institute.
    This same anthrax vaccine was given to approximately 150,000 
military members during the Gulf War. Several national scientific 
groups, to include the Presidential Advisory Committee on Gulf War 
Veterans' Illnesses, have closely examined this issue and found no 
evidence to link the anthrax vaccine with illnesses among Gulf War 
veterans.
    To validate the safety of the Department's Anthrax Vaccination 
Program, an external review of the health and medical aspects of the 
program was performed by an independent expert, Dr. Gerard N. Burrow, 
who serves as Special Advisor for Health Affairs for the President of 
Yale University. Dr. Burrow, who previously chaired the Institute of 
Medicine Committee on Health Consequences of Persian Gulf War Service, 
completed his independent assessment of the program on or about 
February 19, 1998. In his report, Dr. Burrow concluded that the FDA-
licensed anthrax vaccine appears to be safe and offers the best 
available protection against anthrax as a biological weapons agent.
    Question. How many doses are required to protect a soldier?
    Answer. The FDA-licensed anthrax vaccine should be administered in 
accordance with the manufacturer's package insert that specifies that 
the primary series must be subcutaneously administered in a six shot 
regimen. The first three shots are given 2 weeks apart at intervals of 
0, 2, and 4 weeks, followed by three additional shots given at 
intervals of 6, 12, and 18 months. After the primary series has been 
completed, an annual booster shot is required to maintain ongoing 
immunity.
    Question. When will the vaccines be administered and to whom?
    Answer. The total force of approximately 2.4 million, including 
more than 1 million members of the National Guard and Reserves, will be 
vaccinated against anthrax over a 6-7 year period in accordance with 
the Department's time-phased implementation plan. Under the time-phased 
implementation plan, forces expected to deploy to high threat areas 
will be the first to be vaccinated against anthrax. This phase, 
referred to as Phase I (program years 1 and 2), includes service 
members and mission-essential DoD civilians assigned or deployed to 
high threat areas in South West Asia (SWA) and North West Asia (NWA) or 
Korea. Since 3 March 1998, forces assigned to SWA have been receiving 
the anthrax vaccination with forces assigned to NWA scheduled to begin 
vaccinations on or about 1 August 1998. Early deploying forces 
supporting SWA and NWA, to include Active and Reserve Component, will 
constitute Phase II (program years 3, 4, and 5), which is scheduled to 
begin on or about January 2000. Phase III (program years 6 and 7), 
which is scheduled to begin on or about January 2003, will include the 
remainder of the force, both Active and Reserve Component, and 
accessions.
    Question. How much is it expected to cost?
    Answer. The current cost of a single dose at the manufacturer level 
is approximately $3.50. A troop equivalent dose (TED), consisting of 
the full six-dose regimen, cost approximately $21. When all associated 
costs (i.e., transportation, storage, administration, etc.) are 
included, the costs of vaccinating an estimated 2.4 million personnel 
over a 6-7 year period is projected to be approximately $130 million.

                      Medical Deployment to Bosnia

    Question. The Services are each providing medical support to 
deployed forces in Bosnia. The Army has the primary medical mission in 
Bosnia. The average rotation for certain physician and doctors have 
been shorter than anticipated primarily because of the lack of 
casualties. Therefore, surgeons in particular must be rotated in order 
to maintain their proficiency.
    What is the status of our medical deployment in Bosnia? What assets 
are still deployed?
    Answer. We are continuing our medical deployment rotations in 
Bosnia without interruption in order to provide the best medical 
support to our forward deployed forces. Our physicians, nurses, 
enlisted medics and other officers of the Army Medical Department 
(AMEDD) team are doing a superb job in all aspects of health care 
delivery. Our inpatient count remains low and stable. Patients 
requiring definitive treatment and longer hospitalization are evacuated 
as soon as possible to our hospital in Landstuhl, Germany. The current 
Army medical assets include: organic medical elements of the 1st 
Armored Division, the 30th Medical Brigade, the 67th Combat Support 
Hospital (CSH) (-), the 94th CSH(-), the 296th Ground Ambulance 
Company, the 261st Area Support Medical Battalion (-), the 226th 
Medical Logistical Company, the 100th Veterinary Detachment, the 159th 
Air Ambulance Detachment, a Forward Support Medical Team, and the 93rd 
Dental Detachment. These medical units except for the 30th Medical 
Brigade and the 261st Area Support Medical Battalion (-) just arrived 
in April 98. These two units just rotated new personnel from their rear 
assets.
    Question. How long is the average deployment for doctors, nurses 
and medics? Have these deployments been shorter or longer than 
expected?
    Answer. The deployments are for a period of six months. Some 
physicians, nurses, AMEDD officers and enlisted medics have voluntarily 
extended their stay for up to 364 days total for various reasons, 
foremost of which is job satisfaction. Activated U.S. Army Reserve 
physicians were deployed for shorter periods in order to return to 
their positions and/or practices.
    Question. Have medical personnel been able to maintain their skills 
in the field?
    Answer. With the exception of surgeons, the answer is yes, they 
have. Due to the stability of the region and the excellent aeromedical 
evacuation system, opportunities for surgeons to operate are reduced. 
They perform the same procedures normally done in our Army hospitals 
here in the United States, from seeing outpatients, to performing 
special procedures in various specialties found in CSHs, like 
orthopedics, family practice, and obstetrics/gynecology (OB/GYN). As 
you are well aware we have a number of female soldiers deployed and we 
want to provide them the best OB/GYN support wherever they may be. Our 
goal is to continue to hone the skills of our medical personnel 
whenever and wherever we can. Deployments like Bosnia-Herzegovina are 
excellent training vehicles for AMEDD soldiers as well as with other 
branches of the Army.
    Question. What have we learned with the deployment of telemedicine?
    Answer. Lessons learned from deployment of telemedicine in Bosnia 
fall into two categories.
    Technical lessons: High-bandwidth satellite communication for 
telemedicine was not cost-effective in Bosnia. We now look first to 
commercial companies to supply low-bandwidth landlines and if they are 
not available, we turn to commercial satellite links. For the longer 
term, we need to build communications infrastructure for telemedicine, 
along with other medical system requirements, into our deployable 
medical units, thus integrating them into the Signal community.
    Business Process lessons: Even though the use of telemedicine may 
seem intuitive to some people, we found that even highly educated 
clinicians had trouble utilizing the technology without adequate 
training. Training is the key to usability as well as to user 
acceptance. The most effective way to increase the training 
opportunities is to make the use of telemedicine an integral part of 
the business process in our peacetime MTFs. Once it becomes a part of 
everyone's daily practice, it will achieve its maximum effectiveness in 
the field.
    The lack of training and user familiarity resulted in the following 
observation from the data collection team:
    ``We learned that you can't save evacuations if you don't re-
engineer. We didn't re-engineer in Bosnia. Of the 285 evacuations that 
occurred in the last six months of our data collection, a sizable 
number of them (93) were for lab/x-rays/EKG . . . simple, inexpensive 
portable diagnostic equipment far-forward would have provided the 
clinicians in those areas the ability to diagnose the diseases without 
sending the patient for a consult to the `Blue Factory' ''

                            Gulf War Illness

    Question. The Comprehensive Clinical Evaluation Program (CCEP) is 
DOD's primary clinical program for addressing Gulf War Illness.
    Please tell the Committee about your Clinical Evaluation Program 
(sic) (CCEP). What is the process for care for soldiers affected with 
Gulf War Illness?
    Answer. The Comprehensive Clinical Evaluation Program (CCEP), 
developed by a multidisciplinary team of DoD and VA medical 
specialists, was established in June 1994, for Gulf War veterans with 
symptoms or illnesses they perceived were related to their Gulf War 
experience. To date, there is no singular entity that comprises the so-
called Gulf War Illness. Gulf War veterans have experienced a wide 
variety of diagnosed and undiagnosed medical conditions, which span the 
entire range of medical experience. The original CCEP was refined based 
upon recommendations of the Institute of Medicine within the first year 
of the program. This refinement facilitated the completion of most of 
the evaluation services at a local military treatment facility (MTF) 
rather than travel extensively to the larger medical centers. The 
history and medical examination is comparable to an evaluation 
conducted for an in-patient hospital admission. The medical review 
contains questions about family history, health, occupation, unique 
exposures in the Gulf War, and a structured review of symptoms. Health 
care providers specifically inquire about the symptoms and exposures 
listed on the CCEP Provider-Administered Patient Questionnaire. The 
medical examination focuses on patient symptoms and health concerns, 
and included standard laboratory tests (complete blood count, 
urinalysis, and serum chemistries) and other tests as clinically 
indicated. Patients with complex symptoms or whose needs exceed the 
capacity of the local MTF are referred to one of the major military 
medical centers.
    Those with persistent concerns about impaired physical functioning 
are referred to the Specialized Care Center (SCC) and the Walter Reed 
Army Medical Center. The SCC provides an intensive three-week 
evaluation, care, and rehabilitation program for CCEP participants 
suffering from chronic, disabling symptoms. Offering a 
multidisciplinary team of physicians from various specialties, 
behavioral health psychologists, nurses, and physical and occupational 
therapists, the treatment program effectively focuses on functional 
improvement rather than an endless search for etiology.
    Question. How many soldiers have shown symptoms of Gulf War Illness 
(sic)?
    Answer. There is no singular entity that comprises of Gulf War 
Illness. Gulf War veterans have experienced a wide variety of diagnosed 
and undiagnosed medical conditions, which span the entire range of 
medical experience. We reiterate the consensus of the scientific 
community, including prior findings of the Institute of Medicine, that 
Gulf War veterans' illnesses appear to be a heterogeneous group of 
disorders, exhibiting widely varying manifestations and not amenable to 
a single unifying case definition. Therapeutic approaches have been 
tailored appropriately to each individual veteran's needs.
    Question. How many soldiers have been evaluated to date? How many 
soldiers are currently being treated?
    Answer. As of March 31, 1998, 26,698 soldiers have been evaluated 
by the CCEP. An additional 1,499 soldiers are undergoing evaluation. 
Statistics for treatment per se are not collected since the soldiers 
who require follow-up treatment are referred to appropriate providers 
in the general Military Health Systems (MHS).

                  Composite Health Care System (CHCS)

    Question. In 1995, the Defense Health Program completed development 
and deployment of the Composite Health Care System (CHCS), an automated 
medical information system with a life cycle cost of $2.8 billion. The 
Department is proposing to now proceed with CHCS II at a life cycle 
cost of about $7.2 billion.
    What has been the reaction of the people in the medical treatment 
facilities to using the existing CHCS?
    Answer. The reaction has been positive. The following is a list of 
benefits identified by end-users themselves during a survey of 10 CHCS 
sites:
 General
     Avoidance of repeat visits caused by misplaced or 
incomplete information
     Reduced length of stay because of earlier availability of 
diagnostic results
     Increased availability of physician, nurse and support 
personnel time
     Improved documentation
     Electronic mail
 Benefits to Patients
     Responsive scheduling of appointments
     Fewer delays in receiving laboratory and radiology results
     Reduced waiting times at pharmacy
     Fewer repeated tests due to lost or delayed results
 Benefits to Health Care Providers:
     Easier access to complete patient care information and 
administrative data
     Visibility to complete patient care information and 
administrative data
     Visibility to complete pharmacy profile
     Better quality control of health care process
     Immediate access to pertinent patient data
     Transmittal of outpatient orders
     Tracking status of orders
     Display of medication profiles, graphs of lab values, 
patient measurements, and clinical appointments on demand
 CHCS streamlines administrative function such as: patient 
registration/data accessibility; patient/bed management; record & film 
tracking; patient accounting; and work load reports
 Clinical users identified the following as requirements for 
future development:
     Improve documentation for both inpatient and ambulatory 
encounters
     Provide a graphical user interface
     Simplify navigation through screens to enter/access 
information
     Improve provider order entry capability
    Question. What do you see as its (CHCS) strengths and weaknesses?
    Answer. Strengths: The GAO issued a report titled, ``MEDICAL ADP 
SYSTEMS: Defense Achieves Worldwide Deployment of Composite Health Care 
System,'' dated 5 April 1996. It noted that the DoD has successfully 
completed its planned development of the CHCS and is in a position to 
begin realizing the benefits of the system such as improved scheduling, 
greater and quicker access to patient information, and improved 
productivity for health care providers. The report also notes that 83 
percent of this saving is attributed to increased productivity and 
direct cost offsets. The Gartner Group at a December 97 in process 
review noted CHCS as ``a resounding success in world-wide integrated 
health care delivery.''
    CHCS streamlines administrative functions such as:
     Patient registration/data accessibility
     Patient/bed management
     Records & film tracking
     Patient accounting
     Workload reports
     Electronic mail
    Health Care Professionals spend less time collecting, tracking, and 
distributing patient information since CHCS:
     Provides immediate access to pertinent patient data
     Transmits orders
     Assists in formulating multi-disciplinary care plans
     Provides work lists for nurses and ancillary departments
     Tracks the status of orders
     Reports results in a variety of custom formats
     Displays medication profiles, graphs of lab values and 
patient measurements, and clinical appointments on demand.
    Weaknesses: At the time CHCS was deployed many of the weaknesses 
noted were not designated to be a part of the system functionality. 
Noted shortcomings of CHCS and other deployed clinical AIS systems:
     An electronic equivalent of patient records is not 
provided precluding the capability to electronically transmit service 
members' medical records to the theater of operations.
     Consult tracking, many diagnostic tests, and documentation 
of other clinical procedures cannot be performed.
     The comprehensive capture of data and synthesis of 
information regarding findings by physicians and nurses, patient 
complaints, physical exams, differential diagnoses, developing 
treatment strategies, etc. is not provided
     Detailed information concerning health care protocols and 
outcomes is not contained
     Health care providers cannot view patient historical data 
during a patient encounter.
     Support for preventive medicine and dental services is not 
provided
     Numerous computer platforms used are difficult to manage, 
and lack electronic interoperability, integration, and interface with 
other medical systems, the Global Command and Control System (GCCS), 
and the Global Command Support System (GCSS). Input and retrieval of 
data from other systems requires the creation of custom coded 
interfaces. Lack of interoperability results in redundant data storage, 
increases the probability of human error, and increases life cycle 
costs.
    Question. When the original CHCS was fielded, DoD projected that it 
would provide total benefits of $4.1 billion. This included 
productivity by having the patients' medical records on the computer, 
savings from eliminating the paper-based system and an anticipated 
decrease in malpractice claims.
    Do you believe that CHCS is achieving these goals?
    Answer. Yes, CHCS surpassed the goals for which it was designed. 
Specifically it successfully automated:
     Patient administration functions (such as registration, 
admission, and disposition)
     Ordering, processing, and retrieving results of laboratory 
and radiology procedures
     Ordering and recording prescriptions
     Radiology reports
     Patient appointment scheduling.
    Question. Did CHCS successfully automate the medical records, 
eliminating the paper-based system?
    Answer. It successfully automated the functions listed above. CHCS, 
supplemented by numerous stand-alone, specialized, information systems, 
forms the major automated vehicle for supporting the patient care 
process. It was, however, designed to operate within one catchment area 
or facility using 1980s era functional requirements and technical 
architecture. While these stand-alone systems have performed well, they 
were never designed to facilitate the exchange of information from one 
system and/or facility to the next. They do not and were not designed 
to address all the functionalities currently required to obtain a 
completely automated medical record, such as: ambulatory documentation, 
inpatient order entry, and complex decision support. This will happen 
with the CPR.
    Question. Has there been a decrease in malpractice claims?
    Answer. The original CHCS benefit realization work used historical 
malpractice rates and payment figures to predict what future costs and 
case numbers would be. They predicted that 1986 would see an increase 
to 401 claims at a cost of approximately $58.9M. Malpractice 
information for DoD during the period of 1988 through 1995 is 
summarized in Legal Medicine: Characteristics of DoD Medical 
Malpractice Claims: An Update, A Quality Management Tool for DoD(HA), 
the TRICARE Lead Agents and the MTF by Granville, Wiley, Peterson, 
Shutt, and Litts. It reveals that 3,077 claims were filed against the 
DoD for medical malpractice, for a total of $309,158,644 for that 8-
year period. This is an average of 384 claims per year, 17 less than 
what was predicted for 1986 alone.
    Question. Is $4.1 billion still the right number?
    Answer. The correct benefit results are annotated below. The table 
summarizes the benefits, costs, and positive return on investment (ROI) 
for CHCS. Category 1 benefits (Cost Avoidance and Direct Offsets--such 
as reduced malpractice claims) are calculated with the other benefit 
types and also separately since they were determined to represent the 
most tangible and easily realizable of all those attributed to the 
implementation of CHCS.

      Table 1.--CHCS Benefits, Costs, and ROI through October 1996
                         (Figures in $Millions)
------------------------------------------------------------------------
                                                                  All
                                                     CAT 1    Categories
------------------------------------------------------------------------
Benefits.........................................      871.8    1,111.50
Costs............................................      852.5       861.9
Net Benefit......................................       19.3       249.6
ROI..............................................         2%         29%
------------------------------------------------------------------------
A($ are in discounted FY86 dollars).

    Question. In preparation for developing CHCS II, have you 
undertaken a formal after action review of the original CHCS program to 
identify any lessons learned or any shortfalls to be corrected? If so, 
what are those lessons learned?
    Answer. Yes, several efforts were accomplished, and are summarized 
below. These assessments provide valuable information for the present 
CHCS II staff who use these ``lessons learned'' to improve the business 
practices and systems they implement today.
     A detailed mission assessment was completed by the 
functional community to determine if there was a critical mission need. 
This is documented in the CHCS II Mission Needs Statement (MNS). Beyond 
the high level need which is solidly identified in the MNS, the 
functional community, as represented by the Clinical Working Group, 
continues its assessment to determine specific detailed functionality 
requirements and their prioritization.
     The CHCS Benefit Realization Improvement Program (BRIP) 
sponsored a lessons learned project that surveyed multi-disciplinary 
end-users at several sites concerning CHCS and the deployment process 
used. The project separated the information into three essential 
categories: planning core lessons, implementation core lessons, and 
work center considerations. There is also information addressing 
specific CHCS modules, including: Laboratory, Patient Administration, 
Patient Appointing and Scheduling, Pharmacy, Radiology, Managed Care, 
and System Change Requests. This information has been shared with the 
entire MHS community via the BRIP Newsletters available on the CHCS II 
website.
     The Navy Medical Information Management Center sponsored 
an Information Resources Manager's conference to capture CHCS lessons 
learned along with organizational issues specific to the Navy 
information management community. Staff from across the enterprise 
identified not just lessons learned but also solutions, obstacles, and 
alternatives.
     The CHCS Program Office developed the CHCS 
``Implementation Assistance Manual'' which contains a robust section of 
lessons learned during the implementation of CHCS. This manual was 
designed for use by facility staff during implementation of CHCS, and 
provides a valuable resource for the current CHCS II staff.
    Question. What are the major benefits of CHCS II compared with the 
original CHCS?
    Answer. CHCS II will support the creation of a CPR as well as 
integrate pertinent functions that currently exist, are in development, 
or are planned in over 50 separate DoD and Service-specific legacy and 
interim migration systems. As it is envisioned, the CHCS II will 
provide the most feasible functional and technical solution for a 
complete, longitudinal, clinical and preventive record of care for 
every DoD beneficiary.
    The CHCS II Benefits Assessment is presented in the CHCS II 
Benefits Assessment Analysis, dated 15 April 1998. The assessment was 
implemented using the Episode of Care methodology. The majority of the 
projected benefits will be from utilization management (UM), inclusive 
of health care demand reductions and reductions in inpatient length of 
stay. Deployment of the CHCS II will generate the following specific UM 
benefits:
           The substitution of outpatient procedures for 
        inpatient admissions.
           The reduction of the length of stay of inpatient 
        admissions.
           The reduction of the intensity of inpatient care via 
        clinical guidelines and utilization review.
           The ability to monitor cost of care by procedure and 
        provider through utilization review.
           The ability to create and improve community-oriented 
        preventive health programs, including well-baby, health 
        promotion, dial-a-nurse, and immunizations.
    Caregiver timesaving and efficiencies are also anticipated from the 
deployment of the CHCS II. The CHCS II Benefits Assessment projects the 
following timesaving due to the implementation of provider 
workstations, order entry, results retrieval, notewriting, summary of 
care, diagnostic and procedure coding, digital imaging, and vital signs 
capture. The implementation of clinical information systems can improve 
the efficiency of healthcare provider time usage by the following:
           Complete CPRs eliminates redundant intake 
        interviews, chart reviews and testing.
           Instant availability of patient records at any 
        workstation eliminates wait times for laboratory and radiology 
        results.
           Eliminates dictation, transcription, and review of 
        notes.
           Manages clinical information from patient records 
        and medical knowledge databases.
           Direct physician and RN order entry ability 
        eliminates work steps, transcription, and duplicate entries.
           Provides standardized care plans and ``charting by 
        exception''.
    Further benefits from CHCS II will be derived from the following 
cost avoidance:
           The reduction of adverse drug events and adverse 
        drug reactions by having the complete CPR for medical history 
        and allergies, and the electronic order entry function for 
        inpatient and outpatient drug orders.
           The increase in operating room capacity by 
        accelerating the surgical scheduling process, thus increasing 
        the number of surgeries in the facility without increasing the 
        number of staff.
           The reduction of medical malpractice claims.
           The reduction of laboratory and radiology testing 
        costs through universal access to results and digital 
        archiving, as well as providing caregivers the cost of tests at 
        the time the tests are ordered.
    CHCS II will also support the validated requirement for seamless 
medical care for all beneficiaries across the operational continuum. 
Specifically, the CHCS II will allow for timely, pre-, during, and 
post-deployment medical assessment for the active duty population. 
Additionally, when integrated with the Theater Medical Information 
Program, CHCS II will provide the mechanism for computerized medical 
data in the field preventing the problem of dealing with lost or 
missing records within the theater of operations, as well as enhance 
delivery of care. Utilizing the same information system in both peace 
time and theater operations significantly reduces medical staff 
training requirements.
    In compliance with the Clinger-Cohen Acts of 1996, the CHCS II 
Program office accomplished a comparison and ranking of the CHCS II, as 
part of the Analysis of Alternatives (AoA) dated April 17, 1998. 
Appendix C of the AoA reviews the CHCS II along four major areas: risk, 
organization impact, mission effectiveness, and benefit-cost impact. 
This evaluation, in accordance with the GAO/AMIS-10.1.13 (Feb 1997), 
demonstrates the CHCS II as the best investment opportunity for the 
MHS.
    Question. As part of implementing ITMRA, OMB issues a list of eight 
criteria that all major information systems are required to meet. With 
reference to CHCS II, for each criteria could you provide the name of 
the document where you address compliance with that criteria and the 
name of the organization or office that has the responsibility for 
confirming your programs compliance with that criteria.
    Answer. The office responsible for confirming compliance of CHCS II 
with these criteria is ASD(C3I). In addition, the CHCS II program 
receives functional oversight from the MHS Program Review Board and the 
MHS Proponent Committee. It also receives programmatic oversight from 
the TRICARE Management Activity. Furthermore, the CHCS II program has 
had external review from the General Accounting Office and the DoD 
Inspector General.
    Criterion 1: Does the project support core/priority mission 
functions that need to be performed by the Federal government?
    This criterion is addressed in the CHCS II Analysis of 
Alternatives.
    Criterion 2: Can this project be undertaken by an alternative 
private sector or governmental source?
    This criterion is addressed in the CHCS II Analysis of 
Alternatives.
    Criterion 3: Does this project support work processes that have 
been simplified or otherwise redesigned to reduce costs, improve 
effectiveness, and make maximum use of commercial, off-the-shelf 
technology? (OMB recognizes that many agencies are in the middle of 
projects initiated prior to enactment of the CCA, and may not be able 
immediately to satisfy the criteria. For those systems that do not 
satisfy the criteria, OMB will consider requests to use funds to 
support the redesign of work processes, the evaluation of investment 
alternatives, the development of information architectures, and the use 
and evaluation of prototypes.)
    This criterion is addressed in the CHCS II Analysis of 
Alternatives.
    Criterion 4: Does your IT portfolio management and analysis 
demonstrate that the return on investment is equal to or better than 
other bureau IT investments. Does this project demonstrate a projected 
return on the investment that is clearly equal to or better than 
alternative uses of available public resources? Return may include: 
improved mission performance in accordance with GPRA measures; reduced 
cost; increased quality, speed, or flexibility; and increased customer 
and employee satisfaction. Return should be adjusted for such risk 
factors as the project's technical complexity, the agency's management 
capacity, the likelihood of cost overruns, and the consequences of 
under or non-performance.
    This criterion is addressed in the CHCS II Analysis of Alternatives 
and the CHCS II Economic Analysis.
    Criterion 5: Is the project consistent with Federal, Commerce, and 
bureau information architectures which: integrate agency work processes 
and information flows with technology to achieve strategic goals; 
reflect the bureau's technology vision and year 2000 compliance plans; 
and specify standards that enable information exchange and resource 
sharing, while retaining flexibility in the choice of suppliers and in 
the design of local work processes?
    The CHCS II project is predicated upon compliance with the 
appropriate Federal, Commerce, and Health Affairs directives to ensure 
that strategic goals and Year 2000 (Y2K) compliance are achieved, while 
providing essential interoperability and flexibility. CHCS II has been 
developed in response to both National Policy and Public Law. The 
architecture and design comply with standards and directives in the 
areas of Y2K (including FAR Part 39 for COTS products), 
interoperability (such as DII/COE Level 5), and security (C2 level of 
trust), CHCS II is based on the Joint Technical Architecture (Version 
2.0) to provide an open-system infrastructure for evolving system 
requirements and capabilities.
    The CHCS II Test and Evaluation Master Plan (TEMP) provides a 
comprehensive treatment of the architecture and design with respect to 
critical system characteristics and the extent to which they are based 
on compliance with the appropriate Federal, Commerce, and Health 
Affairs directives. The MHS Y2K Plan, the CHCS II Single Acquisition 
Management Plan (SAMP), and the CHCS II Program Office Strategic Plan 
also address compliance with this OMB criteria.
    Criterion 6: Has risk reduction been addressed by avoiding or 
isolating custom-designed components to minimize the potential adverse 
consequences on the overall project; using fully tested pilots, 
simulation, or prototype implementations before going to production; 
establishing clear measures and accountability for project progress; 
and securing substantial involvement and buy-in throughout the project 
from the program officials who will use the system?
    This criterion is addressed in the CHCS II Program Office Strategic 
Plan, the CHCS II SAMP, the CHCS II TEMP, the CHCS II System 
Integration Plan, the CHCS II Analysis of Alternatives, and the CHCS II 
Integration and Migration Plan.
    Criterion 7: Can the project be implemented in phased, successive 
chunks as narrow in scope and brief in duration as practical, each of 
which solves a specific part of an overall mission problem and delivers 
a measurable net benefit independent of future chunks?
    This criterion is addressed in the CHCS II Program Office Strategic 
Plan, the CHCS II SAMP, the CHCS II TEMP, the CHCS II System 
Integration Plan, the CHCS II Analysis of Alternatives, and the CHCS II 
Integration and Migration Plan.
    Criterion 8: Does the project employ an acquisition strategy that 
appropriately allocates risk between government and contractor, 
effectively uses competition, ties contract payments to 
accomplishments, and takes maximum advantage of commercial technology?
    This criterion is addressed in the CHCS II Program Office Strategic 
Plan, the CHCS II SAMP, the CHCS II TEMP, the CHCS II System 
Integration Plan, the CHCS II Analysis of Alternatives, and the CHCS II 
Integration and Migration Plan.

                       Year 2000 Computer Problem

    Question. One of the problems that we face as we enter the next 
century is older computers that are only programmed to remember the 
last two digits in a year. Thus they remember ``1997'' as simply 
``97''. The year 2000, however, will be saved as ``00'', the same as 
the year 1900, leading to serious calculation errors and system 
failures.
    Are you confident of the Defense Health Program's ability to 
correct this problem before the year 2000?
    Anwer. Yes, we are confident that all mission critical Defense 
Health Program systems will be compliant by the year 2000. The Defense 
health Program has established an aggressive approach to addressing the 
Year 2000 (Y2K) problem.
           An Integrated Product Team representing all Business 
        Areas and the three services has been addressing Y2K issues for 
        the MHS systems.
           An MHS Y2K Management Plan has been published and is 
        in use to ensure consistent guidance and action.
           A Compliance Assurance Review, currently being 
        conducted for the Clinical Business Area, is now being expanded 
        to the other business areas. Elements of this activity are:
           Reviews of each system to validate compliance 
        strategy (has been completed for the Clinical Business Area).
           Identification, documentation and reviews of all 
        interfaces within and between MHS and other systems.
           Performance of Independent Verification and 
        Validation for mission critical systems.
    Question. How many systems does the Defense Health Program have to 
evaluate and where do they stand in the process of assessment, 
renovation, validation and implementation?
    Answer. There are 112 Automated Information Systems. In addition, 
there are information system infrastructure components that are being 
evaluated for the need to fix, repair, or replace. Of the 112, 33 have 
been designated for repair or have been repaired. These break down to 
18 systems in renovation, 3 systems in validation, 2 systems in 
implementation and 10 systems that have completed repairs.

    [Clerk's note.--End of questions submitted by Mr. Young.]
                                         Wednesday, March 18, 1998.

                   READINESS OF UNITED STATES FORCES

                               WITNESSES

GENERAL WILLIAM W. CROUCH, VICE CHIEF OF STAFF, UNITED STATES ARMY
ADMIRAL DONALD L. PILLING, VICE CHIEF OF NAVAL OPERATIONS, UNITED 
    STATES NAVY
GENERAL RICHARD I. NEAL, ASSISTANT COMMANDANT OF THE MARINE CORPS, 
    UNITED STATES MARINE CORPS
GENERAL RALPH E. EBERHART, VICE CHIEF OF STAFF, UNITED STATES AIR FORCE

                              Introduction

    Mr. Young. The Committee will come to order.
    As I explained, some of the members are busy meeting with 
the Speaker. Another one of our members is in the Chair 
presiding over this great debate this afternoon on the 
withdrawal of forces from Bosnia. But I expect that shortly we 
will have fairly good attendance.
    We are happy to welcome General William Crouch, Vice Chief 
of Staff of the Army; Admiral Pilling, Vice Chief of Naval 
Operations; General Neal, Assistant Commandant of the Marine 
Corps, and General Eberhart, Vice Chief of Staff of the Air 
Force.
    This afternoon's hearing is closed, so you can be free to 
tell us all of those little goodies that you might not in an 
open session.
    Our topic this afternoon is readiness. We have heard a lot 
of comment on readiness from witnesses who have been here prior 
to your visit. There are some major concerns at the operational 
level, and we are concerned because some of us are not sure 
that this budget actually meets the requirements of the 
services to maintain that readiness and to--not only for those 
who are on the so-called point of the spear, but for those who 
are in a follow-on position.
    We are happy to have you here because we know the important 
role that all of you play in these major decisions. But before 
we start, I would like to yield to Mr. Murtha.
    Mr. Murtha. Nothing.
    Mr. Young. Mr. Murtha has no comment at this point. Your 
entire statements will be placed in the record, and you may 
feel free to summarize them in any way you like, and then once 
we have heard from all of you, we will have some interesting 
questions for you.
    General Crouch, would you like to start, sir?

                  Summary Statement of General Crouch

    General Crouch. Yes sir, thank you, very much. Before I 
begin, let me thank both of you gentlemen personally for the 
many trips that you have made to Bosnia, to all of our training 
centers, and to Korea; and for the intense interest that you 
have shown in the Army, its condition, its readiness, and our 
troopers--where you have made contact with them constantly in 
the field. That is extremely important, and it means a lot to 
us.
    There are four purposes of the Army, as you know--to 
compel, deter, reassure, and support. In Southwest Asia right 
now, we have 9,000 troopers who we have been able to deploy in 
slightly less than five days. It took us almost a month eight 
years ago to be able to amass that amount of combat power. It 
is a tremendous improvement in strategic mobility and 
capability because of prepositioning of equipment and readiness 
of troops.
    In Bosnia, as you all know very well, we have 8,500 troops 
now deployed. By the way, they have not been challenged by any 
of the three former warring factions, who were not ready to 
take them on, and these people were accustomed to 600 years of 
ethnic strife.
    In Korea, the 2d Infantry Division continues to deter 
incursion from the North. For 45 years they have been in 
position to contribute, with their Republic of Korea allies.
    Today, in Houston, gentlemen, as I am sure you know, the 
National Guard and Active personnel are involved in training 
the municipal government in protection from weapons of mass 
destruction. National Guardsmen have been on active duty 
continuously in the Southeast and Midwest over the past few 
months in disaster relief, not to mention what they did in such 
events as Hurricane Andrew in 1992.
    Commanders are accustomed to a balance between training 
readiness and quality of life for their people. That is all 
near-term readiness. They are constantly challenged with 
keeping the amount of resources they are given for tank ranges 
and training, balanced with homes and quality of life on post. 
It is a daily and yearly balance that they go through.
    But contrast that with the Department. I have found the 
same kind of balance, but instead of the near-term training and 
quality of life, it is near-term readiness as opposed to 
modernization. We know that if we resource only near-term 
readiness, we are going to wind up with a readiness disaster 
about 10 years from now in terms of modernization. So we have 
to work that balance, just as finely as a commander does at 
Fort Hood or in Korea, to make sure that we make the proper use 
of those resources.
    What we have tried to do is finely tune the balance with 
this budget submission. We have consciously decided we have to 
invest more in modernization than we have in the past. What 
that has done is stretch us in the only place that we can 
absorb it, which, is of course, in near-term readiness, which 
we have tried to stretch through efficiencies. To a large 
extent, we have had success with that.
    Very frankly, however, the 1998 and 1999 budgets are so 
finely tuned that every single commander has told me personally 
he has no leeway. Therefore, twice I have asked them to come in 
and lay out for me how they are going to deal with 1998 and 
1999. We will make it in terms of readiness, but I am extremely 
concerned. I am concerned enough to have asked them to come in 
and explain twice where we stand and where we are going into 
1999.
    And I don't trifle personally with their time. I have been 
there, and they don't have time to waste.
    I would say with guarded optimism that as far as the future 
is concerned, we have given you the best shot that we could on 
this budget. I am concerned about unintended results of changes 
in the way that we have had to balance this. In other words, if 
there are changes from what we have submitted and the final 
products we could have to deal with unintended results.
    The second thing I am concerned with, of course, is the 
supplemental for Bosnia that we have submitted for 1998. Sir, 
we must have that supplemental without offsets or we are going 
to be in deep trouble later on this year.
    Gentlemen, thank you.
    Mr. Young. General, thank you very much.
    [The statement of General Crouch follows:]

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    Mr. Young. Admiral.

                  Summary Statement of Admiral Pilling

    Admiral Pilling. Mr. Chairman, Members, thank you for the 
opportunity to discuss readiness with you today. I would just 
like to make a few brief remarks.
    Your Navy is the best in the world, and we continue to 
display our relevance on a continuing basis. In November of 
last year, your Navy was called upon to demonstrate American 
resolve in enforcing U.N. sanctions. The Navy-Marine Corps 
team, led by the carriers GEORGE WASHINGTON, NIMITZ and the 
INDEPENDENCE, provided the combat power that led to a 
successful diplomatic outcome in Iraq. Today, Iraq is well 
aware that the JOHN C. STENNIS, the INDEPENDENCE and the TARAWA 
remain on station in the Gulf, ready to respond if needed.
    The recent events surrounding Iraq and our Navy's forward 
presence in the Gulf is a clear example of your Navy and Marine 
Corps team's ability to react quickly in a crisis. Whether 
enabling diplomacy in the Iranian gulf or influencing events 
ashore, from A to Z, referring to Albania and Zaire last year, 
our ability to transition forces quickly between trouble spots 
throughout the world is an inherent quality. It also 
demonstrates your Navy is ready to influence directly and 
decisively events ashore, any time, anywhere.
    But the fragile nature of readiness requires that we remain 
attentive for signs of degradation. Deployed readiness is high, 
and, by design, nondeployed readiness is being maintained at a 
lower level. This cyclical readiness posture has served us well 
in the past, and is the most effective and efficient 
utilization of our resources.
    With reduced budgets and greater efficiency come increased 
risks, which General Crouch addressed. Funding shortfalls 
today, when they occur, have a greater and more rapid impact on 
nondeployed forces than in the past. Our readiness monitoring 
system has proved reliable in identifying deficiencies, and we 
have been quick to take corrective action when they have been 
identified.
    Last year we were faced with an underpricing and resultant 
shortfall in our aviation readiness account. This committee was 
instrumental in obtaining funds to correct this underpricing, 
and I would like to take this opportunity to thank you. Your 
plus-up, in addition to the $2.3 billion the Navy moved into 
our readiness accounts in fiscal years 1999 through 2003, will 
facilitate the procurement of additional resources to enhance 
readiness.
    Specifically, it will allow our maintainers to order the 
necessary parts and perform the essential repairs needed to 
improve material conditions. We have already observed 
improvement in aircraft-mission-capable and full-mission-
capable rates.
    Balancing the fiscal and operational needs of today with 
the defense requirements of tomorrow is a challenging task. At 
the same time, providing our sailors with a quality of life 
commensurate with the sacrifices they make is a necessity. We 
cannot accomplish these alone. We need your continuing support.
    Thank you for the opportunity to testify. I look forward to 
responding to your questions.
    Mr. Young. Admiral, thank you very much.
    [The statement of Admiral Pilling follows:]

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    Mr. Young. General Neal?

                   Summary Statement of General Neal

    General Neal. Mr. Chairman, fellow committee members, we 
appreciate the opportunity to be before you to discuss 
readiness in the Marine Corps specifically.
    Your Marine Corps remains ready today. We take very 
seriously the challenges our Commandant has laid on us to make 
Marines and to win battles. At present, we have over 27,000 
Marines forward deployed around the world, from Haiti to Bosnia 
to Southwest Asia. They are well trained, they are well 
equipped and they are well led.
    Our major problem, as you well know, sir, is the age of our 
equipment. It just takes us longer to maintain and it costs 
more to maintain it, more in precious dollars and also in 
manpower. So our Marines, as they are maintaining this 
equipment, they are losing valuable training time and also they 
are losing quality-of-life time.
    If we are not careful, today's modernization problems may 
well become tomorrow's readiness problems. The solution is 
modernization and continuation of this effort. The actions of 
this committee over the past years have been substantially in 
support of us and have been appreciated by your Corps.
    I look forward to answering your questions.
    Mr. Young. Thank you, General.
    [The statement of General Neal follows:]

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    Mr. Young. General Eberhart.

                 Summary Statement of General Eberhart

    General Eberhart. Sir, first of all, I would like to join 
my counterparts in thanking this Committee for all they have 
done to make sure we have a ready, capable force. Your help 
over the years has led to that situation.
    It is a pleasure to be with you. It is an honor to 
represent the men and women of the United States Air Force. You 
know, from your travels, that they are highly dedicated, very 
motivated, and we owe them nothing less than to make sure they 
are well equipped, properly trained, and ready for any task we 
send their way.
    So as we look at those forces in the field today and, as 
you know from your visits, when we ask them, ``are you ready,'' 
they will tell you, ``yes, we are''; we are making the mark. 
However, they will also tell you it is tougher than it ever has 
been. It is tough to pass that test. Why? Because the equipment 
is aging and the operations tempo is up.
    So those two things certainly complicate that task. That is 
why it is so important to carefully balance modernization, 
readiness, and their Quality of Life, the Quality of Life of 
our soldiers, sailors, airmen, Marines, and their families. And 
we know this Committee is committed to making sure we have a 
ready, capable force not only today, but in the years ahead.
    Thank you very much.
    Mr. Young. General, thank you very much.
    [The statement of General Eberhart follows:]

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                          REMARKS OF MR. YOUNG

    Mr. Young. I think all of you know that members of this 
Committee are pretty aggressive in visiting with our troops, 
not only here at home in the continental United States, but 
overseas as well. In fact, several of us just a week ago were 
in Bosnia for 2 days. We understand the tremendous job that you 
do.
    But what I am hearing from all of you is that while things 
are really good today, readiness is sharp, readiness is up, in 
the future it could not be quite that good because we are 
wearing out people, we are wearing out equipment, we are having 
spare parts problems in some cases.
    And the commanders in the field tell us the same thing, 
that they have the best of what is available. But they express 
concern about what is in the line behind them if they have to 
replace what they have on the front lines now.
    The soldiers, the troops that we see, the men and women, I 
am just amazed at the confidence that they express in 
themselves and their units, the knowledge that they are doing 
something really important and the way, as much as they would 
like to be back home with momma and the kids, they realize that 
they are doing a very important job.
    I say that having just met on this last trip with about 25 
Reservists from my hometown, who really would rather be back in 
our hometown. But they understand they are doing a very 
important mission.

              FISCAL YEAR 1998 SUPPLEMENTAL APPROPRIATIONS

    So this brings us to the subject of the budget. In order to 
do the things that I am reading into what you are telling us, 
we need more money. I am really happy that all of you and the 
witnesses who have preceded you, and the administration this 
year have asked for the contingencies to be considered as an 
emergency and not be offset.
    We tried to get the administration to take that position 
last year, but they wouldn't so our leadership in the Congress 
backed away from that and we had to offset it. The truth is, 
now we have offset a little over $7 billion for Bosnia alone, 
and that will go a long way towards getting you well in some of 
the areas where you are wearing out equipment and where your 
spare parts are not keeping up with the demands.
    Anyway, we think we have a deal this year. This 
subcommittee reported out the supplemental for Defense on 
Thursday of last week without any offsets. We are going to the 
full committee on Tuesday next week, and we hope that we can 
maintain that no offsets, at least from the Defense budget.
    There are those who appear to be demanding offsets of the 
entire supplemental, including the Defense part of it, from 
non-defense areas. While that might work, I think it is 
dangerous, because I think that puts the question of 
survivability of the legislation on the floor.
    So I am not sure where we are going, but the members of 
this committee are doing everything we can not to offset that 
and further shrink what you have available to you.
    I have used my time for questioning to make that very 
profound statement, but we are going to be in a major battle 
here, and we have got to win. Otherwise, we are going to see 
things come to a screeching halt, I am afraid, sooner rather 
than later.

                          FORCE MODERNIZATION

    Mr. Murtha.
    Mr. Murtha. I appreciate what the Chairman is saying, 
because we will not vote for offsets. That means it will be 
vetoed and it will slow up the legislation. So I am hopeful if 
we can get a majority of members to vote this bill out without 
offsets.
    Domestic offsets will not solve the problem. Every agency 
is hurting and there are a lot of people who believe there is 
some easy way to get the money because it comes out of the 
domestic side. I don't believe that. I believe if we start that 
kind of stuff, in the end it will really hurt us.
    What I am hearing you say is a little different than what I 
have heard before--at least I haven't heard it for a long 
time--that modernization is just as important to readiness as 
some of the things that this Committee has been concentrating 
on. They kid me about the HMMWV seats and the boots and so 
forth that we put out there. We know how important those are. I 
know it and the committee does.
    I remember, years ago, 20 years ago, I suggested that we 
ought to be counseling some of our people because of abuse at 
home, because--and everybody laughed at that. But it sounds 
like things are changing right now, where modernization is 
raised to a level much higher than I heard before. No longer 
can we just take care of what we consider the immediate needs 
of the troops; we have to consider modernization or we are 
going to run into a problem.
    For instance, I understand that the Army needs 2,400 of the 
new tanks, and yet every way I look at it, they are only going 
to get 1,100 or 1,200 tanks, the A-1 and A-2. That means the 
Guard will not have any of the new tanks. So we are going to be 
substantially under the number of tanks you really need under 
any circumstances.
    The Navy has had a terrible problem with aircraft. They are 
worn out, they are old, and we have got problems there.
    The Air Force has been, at least I think has been, ahead of 
the modernization thing. With the F-22 they keep themselves in 
pretty good shape. I think we made a mistake when we didn't 
jump over the B-1 and go to the B-2, but that is because the 
Wall came down, and it is easy to say that now. But at any 
rate, I am beginning to see you say that modernization, what 
Shalikashvili said when he left, we need $60 billion a year in 
modernization.
    Would you all agree that is the right figure? Is that the 
figure we really need to get modernization up to the level that 
it should be?
    Admiral Pilling. We think $60 billion is about right, sir. 
We don't get there until about fiscal year 2001.
    General Neal. That was the figure that Shalikashvili, then 
Chairman, had laid out as sort of the mark on the wall, that if 
in fact we made a sustained level of investment at the $60 
billion mark, that in fact the modernization across DOD would 
be satisfied, the requirements.
    I think that is exactly where Secretary Cohen is trying to 
lead us, towards that $60 billion mark on the wall.

                 BALANCING READINESS AND MODERNIZATION

    Mr. Murtha. Should we consider modernization, does it now 
outweigh troop O&B and things like that?
    General Crouch. No.
    Mr. Murtha. In your estimation? We believe this is one of 
the best budgets we have gotten, more balanced, honest. We are 
going to have a hard time changing it.
    Do any of you think that we ought to reduce money for 
troops and put it into modernization?
    General Crouch. As I tried to say earlier, we have tried to 
push that as hard as we can. We have shifted as much as we can 
internally to modernization. I think at this point--and, sir, 
we have worked and stretched this thing about as far as we can, 
and that is the reason why you see the investment in 
modernization that we have made--anything that would further go 
after either base operations, repair and maintenance, or 
operating tempo (OPTEMPO), shifting it out of near-term 
readiness, would really cause us problems.
    Mr. Murtha. So the answer is not in cutting near-term 
readiness. You need modernization, but you need extra money for 
modernization. You can't do it with near-term readiness.
    Admiral Pilling. I would give a slightly different answer, 
sir. The way we look at it, at the top of the pyramid is 
readiness and quality of life for our people. Right after that 
is acquisition, or modernization, the word you are using. And 
right below that is infrastructure. If we were able to reduce 
some of our excess infrastructure, the transfer would be right 
into the modernization account.
    Mr. Murtha. One of the things I learned when I was out 
visiting McDonnell Douglas, they were telling me since Thailand 
cancelled their airplanes, we could get eight airplanes for $80 
million, 8-Ds with the new configuration.
    Does that make sense to make those kind of changes, if we 
could fine the offsets for them, to buy those? I know the 
Marine Corps doesn't need them for a couple of years, but does 
that make sense to buy the eight airplanes at that price if we 
can offset it?
    General Neal. I am not completely familiar with the price, 
but the requirement remains, and I would strongly say that just 
as you had alluded to earlier, the offsets are not resident 
within the Department of the Navy in order to afford those 
aircraft.
    But the requirement, yes, it is a legitimate requirement. 
It seems like it is a good step in the right direction. They 
were probably more affordable back when we programmed for them.
    Mr. Murtha. If we go to OMB and find some offsets someplace 
else, it is a buy, is what you are saying?
    General Neal. Yes, sir. I think what I would say as follow-
on to your question, and my two compatriots here, it is a 
balancing act, and I think all of us would probably step up to 
the table and say a lot of that, puts and takes and trading, 
was done within each of the services in trying to balance the 
modernization account, the quality-of-life account, and the 
readiness account.
    From the Marine Corps' perspective, we have made some tough 
calls, our Commandant has, based on staff input; and 
essentially we have put first priority on readiness, to be able 
to respond when called. And then, of course, we think it is a 
circle. It is almost like a life cycle.
    I think the next step is to try and get your modernization 
account where it is so that in fact you can then be 
contributing to readiness by having newer equipment, which 
frees up your Marines to train and, at the same time, for more 
quality of life.
    Mr. Murtha. It costs more money if you have older 
equipment, because of cannibalization.
    General Neal. Absolutely. And more time, too, which is a 
critical variant, where we tie up our young Marines on the 
flight line, the ramps and the motor pool.
    Mr. Murtha. Thank you.
    Mr. Young. Mr. Skeen.

        MODERNIZATION AND RESEARCH AND DEVELOPMENT REQUIREMENTS

    Mr. Skeen. Thank you, Mr. Chairman.
    Gentlemen, I am sorry I was not here to listen to your 
opening remarks, but I think we are reflecting along--on the 
same lines, I am concerned about the modernization situation, 
particularly with the advancement of technology in the kind of 
atmosphere we have today; it is so rapid.
    You are talking about $60 billion to either maintain the 
forces you have now and also take care of modernization?
    Admiral Pilling. The $60 billion is just procurement, sir.
    Mr. Skeen. What about modernization?
    Admiral Pilling. If your definition is RDT&E----
    Mr. Skeen. Are we talking about the same thing?
    Admiral Pilling. No, sir, we are talking about buying 
hardware with the $60 billion. RDT&E is not in there.
    Mr. Skeen. Is not in there.
    What do you propose in the budget there, or do you have a 
budget for that?
    Admiral Pilling. Well, we do. The Department of the Navy is 
somewhere around $7 or $8 billion this year.
    Mr. Skeen. On modernization?
    Admiral Pilling. On RDT&E.
    Mr. Skeen. Thank you, Mr. Chairman. I yield back.
    Mr. Young. Mr. Dicks.

                            CANNIBALIZATION

    Mr. Dicks. Thank you, Mr. Chairman. I understand our 
surveys and investigation staff has looked at cannibalization. 
The Air Force readiness problems have become steadily worse 
over the past 6 years with the percentage of aircraft reported 
as mission capable dropping each year. Shortages of personnel, 
lack of spare parts, and increased cannibalization are a way of 
life for some units.
    Gentlemen, what is the rate of cannibalization in your 
respective services?
    General Crouch. Sir, we are relying on repair parts supply 
and not cannibalization in the Army.
    Mr. Dicks. For your helicopters, you are not doing ``hangar 
queens''? You have enough spare parts so you don't have to do 
that?
    General Crouch. I am sure that there is movement of repair 
parts in certain units, but we are not relying on 
cannibalization to keep aircraft up.
    Mr. Dicks. Admiral.
    Admiral Pilling. We are sir. Since 1980, our 
cannibalization rates have been going down. We do it in terms 
of per 100 flight hours, how many cannibalizations. Last year 
we had a problem. In fiscal year 1996, our cannibalization rate 
was 8.3 cannibalizations per 100 flight hours.
    In 1997, we had a shortfall in the flying hour program and 
it went to 9.1. But thanks to the efforts of this Committee, we 
had a $322 million plus-up, and we have already seen that rate 
drop down to 8.8 so far in fiscal year 1998. So we did have a 
problem in 1997.
    Mr. Dicks. General.
    General Neal. We had a problem in 1997. We were about 8.2, 
sir. We are down to about 6.7 now.
    Mr. Murtha. Aircraft only?
    General Neal. That is aircraft, yes, sir. We watch it very 
closely, and we don't in fact attempt to go the cannibalization 
route unless it is really necessary to meet the readiness 
requirements.
    Mr. Dicks. General Eberhart?
    General Eberhart. Sir, as you know, our rate was tracking 
about 2.5 in the first part of this decade. Then it went up 
over 4 to about 4.5 about a year ago. This last quarter or the 
first quarter of this fiscal year, it is down to about 3.5. 
That is across our Air Force, and it considers some of the new 
systems we have and some of the airplanes that fly long 
sorties.
    As we look at some of our older systems, such as the F-15, 
we see cannibalization rates that are higher. In fact, I think 
the Chairman is very familiar with the deployment to Southwest 
Asia where we saw rates as high as 18.
    So we are trying to look at this, system by system, and not 
let the overall cannibalization rate give us a false sense of 
security. But with your help--and we have taken steps to add 
more money for spare parts in the 1999 budget to address this 
issue.
    Mr. Dicks. Is it a maintenance problem? Lack of funding? 
What drives this?
    General Eberhart. Sir, I believe for us it is a combination 
of two things. We cut some corners betting on the ``come'' 
that, through efficiencies, that we in fact would continue to 
have the same success that we had earlier in this decade. What 
was working against us was, the airplanes were getting older 
and the ops tempo. So, therefore, we bet on the ``come'' and it 
actually got worse.
    So we now know we can no longer fool ourselves, and we need 
to put more money there. Of course, the long-term solution is 
modernization.

                              SPARE PARTS

    Mr. Dicks. Now, there is a problem with spare parts, isn't 
that right, a lack of spares?
    General Eberhart. Yes, sir, there is.
    Mr. Dicks. And is it a problem in the supply system, depot 
maintenance, or is it the cost? I hear that the cost of spares 
is going up. Is that accurate? If that is accurate, can you 
tell us why you think it is?
    General Eberhart. Sir, first of all, to answer the first 
question, I believe, again it is a combination of things. It is 
older systems breaking more; therefore, our models, the way we 
forecast, how many spare parts we need, are not as good.
    We underfunded. We need to step up and put the right money 
against our spare parts.
    Now, whether or not the spare parts are getting more 
expensive, I think this varies from spare part to spare part. 
For those systems where we are drawing down the system or the 
vendors are drying up, I think the spare parts are in fact more 
expensive.
    But I don't know and I can't tell you. I will have to 
supply for the record, as we look across the board at the spare 
parts problem.
    Mr. Dicks. I would like each of you, for the record, to 
just give us a little summary of that.
    Thank you, Mr. Chairman.
    [The information follows:]

    Navy Answer. The primary cause for insufficient spares in FY97 was 
directly related to the underpricing of the Flying Hour Program. By 
underestimating the growing cost and demand of aviation depot 
repairables (AVDLRS), our Sailors were not provided sufficient OMN to 
order the necessary parts required to conduct all their maintenance. As 
a result aircraft mission capable and full mission capable rates were 
impacted.
    The FY98 Congressional plus-up, in addition to the funds we have 
added to our readiness accounts for FY99-03, will provide our 
maintainers the necessary funds to order parts and help improve the 
material condition of our aircraft.
    While the increasing cost of spare parts is a concern, we are 
working hard with industry to reduce the life cycle costs of our 
weapons systems with improved reliability. Although the individual cost 
of an improved part may increase, improved reliability means we do not 
have to replace it as often and the life cycle costs are reduced.
    Air Force Answer. The cost of repairable spare parts is going up. 
Using FY 94 as a baseline year, Air Force analysis shows that on 
average, the acquisition cost of all Air Force managed repairable parts 
increased 7.4% in FY 95, 6.1% in FY 96 and 7.9% in FY 97. As you can 
see, these cost increases are much higher than the inflation factors 
used in our budget submissions. There are several reasons this is 
happening. Because we are still flying older weapon systems, such as 
the B-52 and the A-10, we must buy or repair parts that are now 
obsolete, or find new vendors to replace those that have gone out of 
business, or modify the parts to newer configurations.

                            CANNIBALIZATION

    Mr. Young. I would like to ask just a quick question on 
this same subject.
    On the cannibalization, is there a procedure where, let's 
say, airplane A is in the hangar because it was cannibalized 
for parts, and then about 25 days into that cannibalization 
period, we cannibalized aircraft B to put the parts back into 
A, so it doesn't become an official hangar queen?
    Question number 2, General Eberhart, you and I have 
discussed this before, but some of your folks who are on the 
flight line have told me and members of this committee that 
some of the parts that they get from the depots don't work. I 
wonder if you would comment on both of those points.
    General Eberhart. Sir, first of all, Air Force-wide, we 
don't have in our Air Force Instructions a policy statement or 
a definition of a ``hangar queen.'' That is a management tool 
that has been used in Commands, it was used in command when I 
was a wing commander. In Air Combat Command, it is defined as 
an airplane that has not flown for 30 days, that is not in 
depot status.
    When you look at United States Air Force Europe, that is 30 
days. When you look at Pacific Air Force command, that is 50 
days. If you go to Air Mobility Command, they don't have a 
definition of ``hangar queen.''
    I personally believe--my philosophy is, this is a good 
management tool because we find, if we just keep cannibalizing 
an airplane and let it sit there for month after month after 
month, pretty soon it is not a very airworthy airplane and you 
essentially don't have anything that resembles an airplane any 
more, so you are fooling yourself.
    But sometimes you do in fact take a part of another 
airplane and put it on another airplane, when you need to get 
that airplane back in service, you need to start putting hours 
on the airplane as opposed to the other airplanes you are 
flying harder.
    The last question, the question I think that you ended 
with, and that is the quality of the parts coming from the 
depot, I can tell you that we are concerned about this as we 
look at the turbulence in our depots, for reasons that we could 
talk long and hard about. But as we track this, the only area 
where we see signs of quality that concern us is in the C-5 
engine.
    Everything else our gut tells us watch out, look out 
because of all this turbulence, you might have quality control 
problems. We don't have the data to support that yet.
    When we look at the parts that are returned to depot 
because they are unserviceable, we find that usually it is 
because there was a breakage that had nothing to do with what 
the depot did to that part or with that part. It had to do with 
shipment or how it was handled at the receiving end.
    But we are looking at that, sir. Our gut tells us that 
might happen, and we are worried about it.
    Mr. Young. Thank you.
    Mr. Hobson.

                        NATIONAL GUARD READINESS

    Mr. Hobson. Thank you, Mr. Chairman. I have three areas I 
would like to discuss and then one general comment.
    For the Army, General, the Army National Guard faces a $693 
million shortfall in your fiscal year 1999 budget. I understand 
the budget was prepared with the assumption that the Army 
National Guard force structure would be cut by 17,000 troops. 
Although the troop cut was avoided, the budget was never 
``fixed.'' The Active Army is at 79 percent, the Army Reserve 
is at 78 percent, but the Army Guard is only at 71 percent of 
required resources.
    It is my understanding that the budget needs the following: 
$156 million so Guardsmen can go to school and special 
training, $10 million for the Active Army Guard and Reserve 
program, $110 million for surface OPTEMPO, $98 million for more 
real property maintenance, and $94 million for depot 
maintenance.
    I guess my question is, how ready is the National Guard? Do 
these shortfalls thwart claims to redesign Guard divisions for 
combat support and combat service support missions; and I 
guess, why does the Army Guard get short shrift in what is 
supposed to be a total force concept?
    General Crouch. The number is $634 million. Now, let me 
translate it for a second to readiness.
    Following a first-to-fight commitment resourcing strategy, 
there are 15, as you know, enhanced brigades that are fully 
resourced in equipment and people. We have not been able to 
give them 100 percent of what they need, but they are in a 
quick deployment readiness band that we can get them ready 
quickly enough.
    We have taken risk in the later deploying National Guard 
units based on defense planning. I would like to have them 
higher, but based on our strategy at this point, we have funded 
them as best we can to be able to perform that mission.
    Can we use more? Yes, sir. And is this figure what I would 
ask for? Of course. And that would help the Guard raise that 
level of readiness.
    Mr. Hobson. Okay. I think it is a problem, and we have to 
look at the problem, because I think if we are going to make 
this a total force and use these forces, we have got to try to 
make sure they are ready to go. Because the Army always gets 
short shrift in the Guard, and then they are not ready to go; 
and then everybody says, they didn't do their job and what are 
we doing.
    Part of it is, I think we have to address some of these 
problems to make the Army, really truly, the Guard part of the 
total force.
    For the Air Force, the Air National Guard fares better than 
the Army with training program needs and how they are funded. 
However, there is a growing and pressing modernization gap that 
needs, I think, to be addressed--between $50 and $100 million 
in modernization upgrades to the F-16, F-15, A-10, KC-135 and 
C-130 fleets. Frankly, is the Guard keeping pace with the Air 
Force and can the Guard support its wartime mission?
    General Eberhart. Sir, I think it is important to note when 
you look at the Guard and Reserve, as we go through our 
corporate process of resource allocation, they are a full-up 
member of the team. They sit at a table just like this as we 
make our presentations, as we make our decisions, and we build 
that budget together.
    When you look at the quality of the forces, the quality of 
the training, if you look at the operational commitments--and 
that is really the key, because they are engaged and employed 
just like their active duty counterpart, so you can go to 
Turkey, you can go to Bosnia, you can go to Southwest Asia; and 
you will see Guard and Reserve fighter units there. You can go 
to the same theaters and see airlift and tanker units there. 
And unless you look at the airplane and know that that insignia 
came from a Guard or Reserve base or organization, you see no 
difference.
    So I believe that they are keeping pace. I don't think we 
are modernizing across the Air Force as fast as we would like 
to, or should, but we are not modernizing and leaving the Guard 
and Reserve behind. It is a total force modernization.
    Mr. Hobson. I want to see the Army--I am picking on the 
Army, but I am trying to help the Army. I hope you realize I am 
not picking on you.
    The Navy does a great job apparently of lobbying. Having 
Wright-Patterson Air Force Base in my district, I understand 
about that.
    I also do worry about the--and I will be pretty quick on 
this--but I do worry about the C-141s, our Reserve units. There 
are a lot of Reserves flying C-141s. They are an old airplane. 
They are going to be around for a little further, but I didn't 
see enough C-17s coming along fast enough, and I worry about a 
bridge.
    So you don't have to answer that now, but I am sure you 
people are looking at it. But sometimes it worries me that we 
are not looking at it.

                                TRICARE

    I have one medical question, and then I want to make one 
other comment. The military health services system is changing 
from a fee-for-service--and you can all answer this--health 
care, CHAMPUS, to a managed care system called TRICARE. TRICARE 
is now being provided in most of the regions of the country, 
including mine. It is just starting.
    This transition caused some anxiety and confusion among 
beneficiaries in all of the services. How satisfied are you 
with the medical care of the service? Do the troops like 
TRICARE? Do you get many complaints from the troops about 
medical care, and what types of complaints? What is your 
impression of the medical care programs for dependents?
    And what kind of feedback are you getting about the new 
dental plan? That is something else.
    General Crouch. TRICARE is still a very new program. One of 
the problems, as far as I am concerned, with TRICARE is that 
the system that we implemented is very, very complex, and it is 
extremely difficult for the trooper to understand, and it is 
extremely difficult for me.
    But for the trooper to understand how the system works and 
what the entitlements are, we need a little bit more 
experience, I think. In fact, we have not implemented it yet in 
the final region. That is yet to come. We need to get through 
that, and I think we should be able to gain a better feel for 
how this is going to work and gain some confidence in the 
system.
    It is too early to tell, as far as I am concerned 
particularly from the troopers' standpoint, how this is going 
to work. There is uncertainty.
    Admiral Pilling. Sir, we have not fully implemented TRICARE 
across the country, but in those regions where it has been 
implemented, we have done surveys to see whether the people 
liked it or not.
    What they most like about TRICARE were four things: access 
to care, customer services, low copayments and choice of 
providers. The biggest complaint: It is a very difficult system 
to understand.
    General Neal. Sir, about the same findings. It suffers from 
an image problem. As you know, it was originally approached 
starting up in the Northwest quadrant of the country and then 
has matriculated around. They expect to open up Norfolk-Camp 
Lejeune, one of our major bases, in May; and then the last 
region will be the Capital District region going up to the 
Northeast.
    The thing I found in my travels, basically to reinforce 
what my compatriots said, is the understanding of it, the 
complexity of it; the different systems under the TRICARE plan, 
which one is best for the individual.
    A second thing I would say, an observation, is that there 
is concern about the folks that are out there in recruit 
billets, I&I staff serving in Reserves, they may be away from 
the medical facilities that are not normally associated with a 
military environment. So trying to figure out what is the best 
system for them.
    A third problem is leadership itself, the folks from myself 
on down trying to understand it and articulate and educate our 
young folks as to what the best system is for them, a big-time 
problem.
    Fourth, a great constituent is the retired community. They 
are worried about it.
    Mr. Hobson. Tell me about it. I have a lot of them.
    General Neal. Any time you have to pay for something they 
rightfully view as a benefit, it brings prickly heat to the 
back of their necks--and to yours, I am sure.
    General Eberhart. Sir, what I would add is that, first of 
all, we as individuals are not very good with change, so in 
most cases people don't like change, and that is directly 
proportional to how long they have experienced the current 
system.
    That is where we get to the retirees. Of course, they are 
very comfortable coming to the base hospital and the system as 
it was. They are less comfortable obviously with a system they 
don't understand. And they have to pay money; maybe it doesn't 
involve the base hospital.
    Secondly, we are finding as we implement this around the 
country, in some areas, it doesn't fit very well because we 
have a hard time getting providers to sign up, so our people 
sign up for TRICARE, but we do not have enough providers sign 
up to provide the health care. So that is certainly 
complicating the issue.
    In some cases, we are our own worst enemy. When we have 
good leadership out there educating people and making sure the 
system works, it is more successful.
    Mr. Hobson. The only comment I will make is that somebody 
finally got the message on readiness on trucks. Mr. Murtha is 
not here now, but it doesn't look like we have to put them in. 
Somebody finally said, we have to have trucks.
    Mr. Young. Mr. Sabo.

                AIR NATIONAL GUARD AND AIR FORCE RESERVE

    Mr. Sabo. Does it make sense in the long term to continue 
to have both an Air Guard and Air Reserve? I have both units, 
and they both do their work well.
    General Eberhart. This is pretty dangerous territory here.
    Mr. Sabo. They do the same tasks and they share some 
facilities.
    General Eberhart. Sir, I think because of law, it does make 
sense, and that is because of the commitment to the governor of 
those militia forces.
    Mr. Sabo. I guess if one made a change, it would have to be 
the Air Guard, because of the commitments to the State.
    General Eberhart. The current system works, it is not 
broken, and it provides the governor with the capabilities our 
Founding Fathers had in mind.

            BALANCING PROCUREMENT AND NEW SYSTEM DEVELOPMENT

    Mr. Sabo. Regarding modernization and procurement, how do 
the services make sure that some of the basics, like Mr. 
Hobson's trucks, are in place versus money for new systems?
    General Crouch. Sir, let me start. That is the balance that 
I was speaking about earlier between near-term readiness and 
modernization--a tension that each department has to work its 
way through every single year. We have decided we have got to 
get enough into modernization so that we don't have a near-term 
readiness problem 10 or 15 years from now.
    But at the same time, we have to make sure that everything 
from repair parts to the condition of homes, from OPTEMPO to 
base support, is in the right kind of balance. That is not an 
easy task.
    Are we doing it at this point? We are able to, but because 
of this need to invest in modernization, we have taken away all 
the flexibility that our commanders have had in the past.
    General Neal. As you know, sir, we have an active truck 
replacement program going on right now.
    Mr. Sabo. I am not thinking of trucks in particular. I used 
that as an example.
    General Neal. But it is a critical element for us, because 
trucks are not section I, they don't have wings and they don't 
go fast, but they get the troops to the battlefield. And if we 
have old trucks, both our 5 tons and our HMMWs, and we have an 
active program to replace them and we have put a lot of money 
in it, that is part of our ground modernization program.
    So going back to the balancing act and looking across the 
spectrum both on the ground side and on the aviation side, we 
have to start replacing these older programs soon. The effort 
has already begun through this committee's help. And it takes 
too long, even as well as we have crafted it; and we will 
suffer with that because, as we have older equipment, as I 
mentioned earlier, it just takes longer to repair it. If it 
takes longer to repair it, it means more Marines that don't 
have the time or money to go out and train. So that goes in a 
circle and affects the quality of life.
    The modernization is critically important to--really our 
ability to meet the 21st century head on.
    Admiral Pilling. Sir, as I understand your question, you 
are asking us, how do we make the trades between upgrades to 
existing systems and buying new ones?
    Mr. Sabo. Yes, and the things we are not going to have a 
contract for.
    Admiral Pilling. Right. I think it is a balancing act. But, 
for example, in the F-18C and -D, we have no room for growth in 
that airplane. There is only one-third of a cubic foot left for 
growth in it. We have 17 cubic feet in the F-18E, -F, so you 
don't have a choice to upgrade -C and -D; you have to go to a 
new airplane to have future growth.
    The same thing happens, why we went to new submarine 
programs; we had no room for growth in the 688-I. We had no 
room for growth, so we had to grow.
    We need an industrial base that is going to be there if we 
have to surge. If we stop buying airplanes and ships and go the 
upgrade route, if we do have to surge because of a national 
security emergency, we might not be able to do it.
    Mr. Sabo. I am told there are a few minutes left, and I 
have to go vote.
    Mr. Young. I think you should vote.
    Mr. Sabo. This is the Bosnia vote, I assume?
    Mr. Young. This is the Bosnia vote.
    Mr. Sabo. I had another question, but I will pass.

                                 TRUCKS

    Mr. Young. I have been trying to get the exact number, but 
this Committee has increased the amount of investment in trucks 
in the last 3 years very substantially, and I am wondering if 
the problem is still that severe. If we had not done that, you 
probably would not have any trucks today that run.
    But the big question I have, has all the money we have 
appropriated over and above the President's budget for trucks, 
has that gotten down to the services, or has it been siphoned 
off for some other purpose?
    General Neal. From our perspective, sir, it has not been 
siphoned off. It is too critical a piece in our entire makeup 
for deployment for ground forces. And, as I had mentioned a 
moment ago, through this committee's good efforts and the plus-
ups that you have given us, our truck program is working. It is 
mostly just production and getting them out to the folks in the 
fleet. The same holds true for the HMMWV replacement, light-
weight tactical vehicle.
    Mr. Young. Mr. Nethercutt.

                          MEASURING READINESS

    Mr. Nethercutt. Thank you, Mr. Chairman.
    Welcome, gentlemen. I think the whole issue of readiness is 
obviously very important to what the military does, and I read 
your statements and noticed your commitment to readiness. I 
guess my question is, how do we accurately determine readiness? 
In other words, what standards do you have, what tools do you 
have to really accurately define or assess readiness?
    Secondly, how does the readiness of today compare with the 
readiness of 15 years ago, given the current state of affairs 
that we find in the world and the optempo that seems to be 
developing for our military?
    I was just in Bosnia with Mr. Bonilla and Chairman Young, 
and we are certainly impressed with our young people there and 
certainly the commanders that we met with. It is a little 
different mission than Iraq or Vietnam or other places that we 
have gone in the world.
    I wonder if you could, for the record here, tell us how you 
can accurately assess readiness. I know we all want to say, we 
are ready, but how do you really assess readiness? And second 
of all, how does it compare to prior readiness conditions?
    General Crouch. I think the best measure that we have right 
now is the monthly readiness report. However we have never been 
completely satisfied with the report. We have one that we 
believe by the end of this year, is going to be automated to 
the battalion level and objective enough in some of the 
measurement devices that it is going to give us an even better 
feel. But when I read what I get right now, it is measured in 
personnel logistics training and, most importantly, in the 
commander's comments, because he has a place in the report to 
tell us exactly what his concerns are.
    Buried in logistics, of course, are comments about funding, 
and he will also use that as an opportunity to address 
training. We receive the report from, for instance, the 10 
divisions, or the 15 National Guard Enhanced Brigades and all 
of the Army units, to tell us whether they are in a condition 1 
through 4 in any one of those areas, and then elaborates on it.
    Is it an infallible system, sir? Absolutely not. There are 
all kinds of room for interpretation.
    I have some real hope for this new system, because it is 
more objective than what we have right now. Does it give us a 
pretty good feel for readiness, however? I have worked with it 
long enough personally that I have confidence in it. I also 
know the commanders. I know the guys that are reporting, and I 
know the words that they are using, and I know what those words 
mean to me. Let me take the second part of your question. When 
you commit a unit to Bosnia or to that kind of operation, you 
are going to take a tank battalion that runs offensive and 
defensive operations and put them in a role of running convoys 
and checkpoints.
    In fact, a battalion conducting negotiations with three 
former warring factions and trying to keep them all on an even 
playing field is not doing intelligence preparation of the 
battlefield in a conventional sense, nor the preparation of a 
fire plan for a conventional operation to mass battalion fire 
on an objective.
    Your question is, does that erode the readiness of a combat 
division immediately? The units we commit to that, we have to 
train for those tasks. We are not going to commit a tanker, an 
artillery man, or infantryman to a task for which they are not 
trained. So we are going to train them on checkpoints, when and 
how to perform, and the kinds of mine fields you run into in 
Bosnia, which are vastly different than an antitank mine field 
we expect to run into in Southwest Asia.
    Conversely, however, if you are a helicopter repairman, you 
are going to repair the helicopter the same way in Bosnia as in 
Southwest Asia. So there is some trade-off, and it depends on 
the skills.
    But when we bring a unit out of a peace support operation 
like Bosnia, when I brought them back, it would take me about 
six months to retrain them.
    Now, I could crash, probably in about 45 days--that means 7 
days a week, near 24-hour days at a training center. But that 
wasn't the mission. These troopers have been separated from 
their families for a year. The idea was to balance training 
with weekends off, troopers going home at 5 o'clock in the 
afternoon, and making sure that we took care of the family 
piece at the same time we were trying to get our troopers 
retrained. Does it have an effect, absolutely.
    Admiral Pilling. Sir, we have a similar system to track, 
called SORTS. We have so many reporting systems, probably the 
fleet would prefer that they were reduced by about 50 percent. 
I won't go into details, but we track a lot of things on a 
daily, weekly and monthly basis. We even have a two-star 
admiral on the Navy staff who is in charge of tracking down 
anecdotes. If we hear about a problem, we go find out what 
happens.
    Compared to where we were years ago, our forward deployed 
forces are just as ready, if not better, today as they have 
been in the past. We do see things like cannibalizations going 
down as a function of time. The quality of people is good.
    If I had to make an overall comment, the one thing that 
makes us nervous is the nondeployed readiness. The forward 
deployed is very good, and we are always going to push to the 
point of the spear. But we see--as we come back from a 
deployment, we sort of go into what we call a ``bathtub.'' We 
degrade and then go back up. It looks like the depth of that 
bathtub is deeper and the climb out to the forward deployed 
readiness is steeper. We are nervous about that.
    General Neal. Basically, the Navy and the Marine Corps do 
it the same way, going forward deployed. Of course, the forces 
out there are as ready as we can make them 100 percent full 
mission capable in aviation, with 98 percent on the ground 
side, for the 11th that is deployed, as we speak, out in 
Southwest Asia.
    I think the same systems that we used 15 years ago are 
still being used today, there has been maybe a little 
refinement, but the same systems of measuring personnel, 
training, equipment and logistics, and then the commander's 
comments on what his assessment is to complete his mission.
    Fifteen years ago--I was a battalion commander at that 
time--I thought I was as ready as ready could be and that I 
could accomplish any mission the Marine Corps was going to give 
me. But, you know, I have been traveling around the Marine 
Corps these past 2 years, and I see the young men and women 
that we call Marines now, I see the type of training they are 
doing.
    I didn't really do--we used to do--we used to call it old 
NBC training. Now, for weapons of mass destruction, they are in 
mopp gear; they do a lot of their training clothed and they get 
out and they beat the bushes.
    Last week I was down at Camp Lejeune, and a young Marine 
was out there doing a mine-clearing operation for an FSSG 
organization, just out there practicing in full mopp gear. I 
grabbed the Marine to ask him some questions. It turned out to 
be a woman Marine. Now, I wouldn't have found that 15 years 
ago.
    But she was doing it. She had the best equipment we had at 
that particular time. She felt very comfortable operating in 
that environment. I don't think my battalion would have been as 
good 15 years ago.
    So to your question, it really hasn't changed much from our 
forward deployed units have always been ready. As they come 
back, it takes the units that are back in the garrison longer.
    Right now, we are finding it is taking them longer to get 
back up to step into a C-1 category only because we have aging 
equipment that takes longer to repair and stand up.
    General Eberhart. Sir, as you know, we report through SORTS 
like the other services do. Is it a perfect system? No. I think 
it is a system that we understand, and we understand its 
shortcomings and we are working to fix those.
    The thing I like about it is the reporting from the unit 
level. No one else has a vote. The unit commander writes down 
that report and send it up. So the wing commander, the numbered 
Air Force commander can't change anything, can't put a footnote 
on there; and that is looked at by the CINC that they report 
to, by the Service Chief and by the Chairman of the Joint 
Chiefs and by the Secretary of Defense.
    Now, he or she does have commander's judgment where they 
can change an upgrade or downgrade. Years ago, I hate to say, 
when I was commander, we almost always upgraded. But when you 
look out there, today at the changes for commander's judgment, 
about a half to two-thirds are upgrades, but there is another 
third of them that are downgrades, which says it is okay to 
call it how you feel in your gut. And there is no stigma 
attached.
    How do we go on and verify that? The first thing that 
happens when you go on a base for an operational readiness 
inspection, we check the reporting. That is important to us 
because we know then how to grade them. We have standards, but 
we want to make sure the reporting is correct. There is nothing 
worse than to be reporting you are this good, and when we knock 
on your door, you are not really that good. What if we did 
commit you to battle and you weren't prepared?
    How do we compare it to the past? I think if we look at the 
hollow force, we are nowhere near where we were in the hollow 
force. When we look at the late 1980s, our numbers were 
probably better, our numbers were probably better in terms of 
cannibalization rates and in terms of mission-capable rates.
    The irony is, we are more capable today for the reasons 
General Neal talked about. Our systems are more capable, and we 
hate to say it, we are proud of it, the people are better today 
and we take great pride in it.

                           COLD WEATHER GEAR

    General Neal. If I could have an alibi, sir, one thing I 
probably should have mentioned in thinking about it while Ed 
was talking, the equipment also. Just the simple equipment, 
like Gortex--and this committee helped immeasurably with 
outfitting the Marines with Gortex--if you have a Marine with 
equipment that keeps him dry in inclement weather, warm in cold 
weather, you have a happy Marine. You give him two meals--you 
don't have to give him three; you give him two, and save money 
on not giving him three, and you have a happy Marine. They make 
a difference, because nowadays they last longer. And this 
Gortex, I tell you, this is better than sliced bread.
    Mr. Nethercutt. Mr. Chairman, I am over my time. I want to 
say one thing.
    I think in looking at readiness, you can't ignore the 
employer of the Guardsmen or Guardswomen who are part of the 
force that represents you so well, and I think that that has to 
be carefully considered. I have been one who wants to get more 
incentives to the employer, so they can support the employee 
who wants to do his or her duty as a Guardsman.
    Thank you, Mr. Chairman. Thank you all.
    Mr. Young. General Neal, about those two meals for the 
Marines, General West has educated me on how you do the third 
meal each day, and it is sort of disgusting, but apparently it 
works. He tried to convince my sons about what it was that he 
ate when he couldn't get regular meals.
    Mr. Bonilla.

                        OPTEMPO AND DEPLOYMENTS

    Mr. Bonilla. Thank you, Mr. Chairman.
    First of all, I would just like to say it is nothing short 
of a miracle what you guys accomplish in this day and age with 
the cutbacks you have experienced over the last few years. I am 
very proud that we have been able to at least maintain the 
levels of readiness that we are at today. Hats off to you for 
keeping your chin up and trying to do the best you can under 
these circumstances. Please know that there are a lot of us on 
this subcommittee that are deeply concerned about some of the 
things we are talking about here today.
    I pulled a few facts out of your testimony, and these 
figures are incredible from every branch:
    Marines routinely working 12 to 16 hours per day, 6 to 7 
days a week to maintain aging equipment;
    Since 1986, the Air Force downsizing 40 percent while 
experiencing a fourfold increase in operational commitments;
    Ten Air Force specialties experienced deployments above the 
120-day mark in 1997;
    The Air Force is currently 200 pilots short;
    During the Cold War, the Army averaged one deployment every 
4 years; since 1989 it has averaged 14 every 4 years.
    I could go on and on.
    Again, I just wanted to say for the record that I don't 
know how you do it, and we are just proud of what you are 
accomplishing under the current circumstances.
    In General Eberhart's testimony, he states the high level 
of operations over the past several years is beginning to wear 
on both our people and systems and is stressing our current 
readiness.
    My question to you, General, and for the others here as 
well, is how long before the situation becomes absolutely 
critical? Or are we close to that already, are we there 
already?
    General Eberhart. Sir, I think that we have used this term 
for years, that we are on the ragged edge, we don't have any 
margin left. So to tell you when it is going to happen, I am 
not sure. I think that we are assisted by the help of this 
Committee, the adds that you have provided over the last 
several years. The fact we have moved about $1 billion from 
1998 to 1999 to fix those types of issues in the spares 
accounts, and repairables, because we realize we cannot 
continue to operate that way because this state of operations, 
these deployments, contingencies around the world, doesn't look 
like it is an aberration. It looks like it is here to stay.
    We have to go ahead and fund accordingly and organize 
accordingly.
    But I would never say that the bottom is going to fall out 
next year or the following year, and the reason I can't say 
that is because of those young men and women you saw on your 
most recent trip. Because they can make almost anything happen. 
Again, that is why it tears at your heart strings to be out 
there and talk to them and hear them say, sir, we can do it, 
but it is tough. It is getting tougher all the time.
    Mr. Bonilla. It does tear at your heart strings, General. 
Would anyone else like to comment on when the situation may 
become so critical that it is time it would actually shock the 
country, I guess, to find out what is going on?
    Admiral Pilling. I don't think we have a forecast of a year 
or any date certain, but one of the ways we think about it in 
the Navy is, there are sort of four pots of money: Readiness, 
you don't want to take money out of readiness; force structure, 
you just make the problem worse by taking money, because now 
the deployments have increased for those that are left; 
acquisition, that is your insurance policy for the future. The 
only other place to look is infrastructure.
    We have more infrastructure than we have military forces. 
If we can figure out some way to reduce infrastructure, we can 
put that money into the readiness, modernization and force 
structure accounts.
    General Crouch. Let me narrow this just to the personnel 
idea that you talked about two or three times as you made that 
comment.
    That is something that we are really concerned about in the 
types of deployments and the types of missions that we are 
taking on, the average of deployments every 4 years. There are 
a number of different ways you can figure it.
    We are concerned about it enough that we are at this point 
monitoring monthly every single battalion and the repetition in 
deployment of troops. We have all been concerned about how many 
times a trooper is going to Bosnia; or back to Congressman 
Nethercutt's concern about the employer, and how many times we 
are activating that trooper to take on one of those missions, 
and what happens to the job. How long can he go and how many 
times can that happen?
    So that is something that four or five years ago did not 
require the kind of monitoring that we are doing right now. But 
General Reimer and I look at that every single month, and we 
have reversed plans for a couple of units recently that looked 
like they were going to be activated to go on that kind of a 
back-to-back deployment.
    We have also implemented a new rotation policy that if you 
are gone for a month, you are home for a month. So it may be a 
six-month deployment, but you may not be touched for the same 
amount of time as an individual once you get back, once you 
return.
    Conversely, the mystifying part of it is, the troopers who 
are deployed, the troopers who are going on these missions, are 
the ones that are reenlisting at a high level, at 140 percent 
to be accurate, in U.S. Army Europe. They are deployed and 
gone, yet when you question them at the reenlistment, they are 
doing what it is they signed up to do.
    Where is the break point? I honestly don't know. Is it 
something we have to watch and we have got to put systems and 
guards in place? Yes, sir. It hasn't happened yet.
    General Neal. I think I can follow-up on that, sir.
    Retention is really good. We are already at 90 percent of 
filling our boat spaces for first-term reenlistments, and we 
are not even halfway through the year. Marines like to deploy. 
They like to feel like they are doing a real mission.
    I think what we have to be very conscious of all the time 
is making sure we talked about this balancing act of readiness, 
modernization and quality of life. The readiness piece, I don't 
think any one of them argues about. It is when they get back 
off of deployment, the long hours that it takes for them to get 
ready for the next event, whether it is a training evolution or 
whether it is another contingency, or whether it is in fact a 
deployment 18 months down the pike. So that is where we owe 
them.
    Our budget is on a fine line, and there is no discretionary 
money in those budgets nowadays. So even the supplemental 
which--the Marine Corps doesn't have a lot of dollars involved 
in the supplemental, but it has to be an emergency supplemental 
that doesn't require offsets, because that money--we are only 
talking $12 million for the contingencies, but that $12 
million, if I don't get that, then I have to take it from 
somewhere else; and ultimately what that means is the quality 
of life will suffer first, because I am going to put the money 
into the readiness account.
    Likewise, for the storm damage by El Nino, that is $30 
million. If I don't come up with that $30 million without 
offsets, then in fact that is going to be critical, and I am 
going to have to take it from somewhere else or not make the 
repairs that need to be done that in fact eventually affect 
readiness, because it affects morale, because I don't have the 
right quality of life for the troops.
    Mr. Bonilla. I come from an area where I deal directly or 
indirectly with about 7 installations. We are proud of support 
we give our military in south Texas, in San Antonio. But across 
this country, people take for granted what we have here in our 
backyards, tremendous prosperity.
    We don't have to look very far to see another culture, even 
in Mexico, which is just a few miles down the road from my 
home. That country is struggling, people wondering where they 
are going to get their next meal.
    You go to Bosnia and see the destruction, in other parts of 
the world there is bloodshed. In this country the greatest 
concern parents have on weekends sometimes is whether or not 
they can get all the Beanie Babies for their kids. But they 
don't understand how we got to this place in history because of 
the strength of our military.
    Unfortunately, until we have an acute situation out there 
where there is a crisis or a confrontation and people go, I 
thought we had a higher level of readiness, I thought we were 
capable, that we were at the level we were at during the 
Persian Gulf War, what happened?
    But politically, the country is focusing on so many 
domestic problems and whether or not the Federal Government is 
going to give them a child seat and child care in the 
afternoon, they are not concerned about the fundamental things 
that got us to where we are at this point in history.
    That is what concerns me, and that is what I kind of have 
been harping on quite a bit lately.

                      FORCE STRUCTURE REQUIREMENTS

    I have a question for the record, gentlemen. If you would 
be so kind as to submit what you feel would be the force levels 
required to meet this administration's numerous contingency 
operations and future procurement and training requirements for 
such an active force; in other words, to have the right number 
of people to do all these things we are doing, how many do we 
need?
    If you would provide that, I would appreciate it.
    [The information follows:]

    Navy Answer. The Quadrennial Defense Review (QDR) validated the 
requirement to maintain twelve aircraft Carrier Battle Groups (CVBGs) 
and twelve Amphibious Ready Groups (ARGs) in order to provide Navy's 
required core combat capabilities. The numbers of surface combatants, 
submarines, and other ships were accordingly adjusted commensurate with 
these core capabilities and are sufficient to meet our forward presence 
and combat requirements.
    Marine Corps Answer. The Marine Corps has marginally enough people 
to support the assigned commitments throughout the world. During the 
recent Quadrenniel Defense Review (QDR), the Marine Corps was 
determined to be an extremely lean fighting force. Having our 
endstrength further reduced, even slightly, cuts into our ability to 
support our current level of commitments. By looking at our current 
unit Deployment Tempo (DEPTEMPO) figures we can show you how close we 
are to breaching our deployment goals.
    Our deployment goals are as follows:
    (1) A turnaround ratio between major deployments of 2:1, with 3:1 
preferred.
    (2) 180 days or less of DEPTEMPO per 12 months when looked at over 
both a 12 month and a 36 month period.
    DEPTEMPO is defined as when a unit spends 10 or more days away from 
home station during a given period. Periods of less than 10 days are 
not tracked, nor are periods at home station greater than 10 days 
tracked.
    For example, during the last 12 months ending March 1998, 7 of 24 
Marine infantry battalions had DEPTEMPO greater than 180 days. All of 
these units were either deployed or preparing to deploy during this 
period. The remaining infantry battalion's DEPTEMPO varied depending on 
whether they had just returned from deployment or were preparing to 
deploy. This DEPTEMPO is currently sustainable, but any increased 
contingencies or decreased manpower will cause us to adjust our 
schedules to share the increased deployment load with all like units.
    Regarding procurement and training requirements, the Marine Corps 
requirement for procurement of equipment to support our ground units is 
approximately $1.2 billion per year and training requirements (formal 
schools and unit training) average $271 million per year.

                       JOINT TRAINING REDUCTIONS

    Mr. Bonilla. General Crouch, specifically, in your 
testimony you stated that reductions in joint training 
exercises and a reduction in the number of brigade task force 
rotations to the national training center are among the steps 
we have taken to reduce PERSTEMPO and improve personnel 
readiness. I am concerned that while these steps required to 
reduce PERSTEMPO that you are suggesting, how can these steps 
actually heighten readiness if we are doing less? Do you see 
the contradiction?
    General Crouch. Absolutely. If I may, our level of 
exercises have been increasing at such a rate that, when 
combined with deployments, sir, every commander can find a 
better way to train; and I have never seen a commander who 
didn't want another exercise added into his training program to 
make something better. Generally, that is true, but there is a 
limit.
    So when we combined all of the deployments to Bosnia, to 
Macedonia, to Partnership for Peace exercises, along with the 
requirements to take troops from the United States to fill 
shortages, both in the Pacific and in European Command areas--
and we have a continuing growth in exercises--we had finally 
had to say, stop.
    What is the right point, particularly from a personnel 
standpoint? We are not deploying our troopers more than about 
120 days a year, which is where we want to keep it.
    So if we go beyond that, then we are asking, why is there 
so much deployment and is there another good exercise that 
someone has come up with that is stretching a unit beyond the 
point which is rational?
    Mr. Bonilla. One more question, or am I out of time?
    Mr. Young. You have been out of time, but it is okay. Take 
one more question.
    Mr. Bonilla. I am not going to prolong it. If I have any 
more questions, I will provide them for you. I appreciate your 
time very much. Sorry about that, Mr. Chairman.
    Mr. Young. That is fine. The gentleman is already very 
patient with the rest of us. We appreciate that.
    Mr. Istook.
    Mr. Istook. Thank you, Mr. Chairman.
    Gentlemen, I appreciate the insights that you are providing 
us. Let me ask a couple of questions.
    I am interested, General Neal, if these other gentlemen are 
willing to put their people on two-a-day rations, or if that is 
just a function of the Marine Corps.
    General Crouch. No.
    General Eberhart. We didn't get any Gortex.

              CHANGES IN THE SIZE OF THE DEPLOYABLE FORCE

    Mr. Istook. If you had Gortex, would that be okay? 
Oftentimes, when we hear readiness discussed--you mentioned, 
Admiral, of course, the ``bathtub effect'' and the climb-out 
after deployment and becoming fully ready and the difference. 
You mentioned that the forces that are deployed are certainly 
in full readiness condition and fully capable.
    I often hear the total forces discussed in terms of, this 
is the number of people in the force structure, and we talk 
about how many are deployed. There is probably something you 
have that is basically defining who is deployable. Because they 
are not tied down to some pre-positioned spot or they are not 
required for something that is here within the continental 
U.S., but they are deployable, that if you had to deploy 
someone, they would be it.
    The real question is, what is the readiness and the numbers 
of those people when you compare them with what have been the 
historical numbers and the historical readiness of other 
people, rather than just talking about the level of preparation 
of those that are already deployed or the total number of 
people we have. That may be something you need to provide, for 
the record. I am very interested in knowing that delta, if you 
needed to make a commitment, who are they, how many are they, 
and what is their level of readiness?
    I would also appreciate your comments on--you mentioned 
certainly, General Neal, the difference in the level of 
capability of troops today compared to 15 years ago, and that 
is obviously a very significant factor. But I don't know if 
there may have been some historical changes in the definition 
of readiness or the different levels of readiness.
    I find sometimes in different agencies they are using the 
same term, but they have formally changed the definition over 
the years. I am interested to know if there have been any 
changes in what we define as ``readiness,'' so again we can 
measure that capability. I would appreciate it if you may be 
able to respond to those issues.
    General Crouch. If I could start with the second one, 
traditionally, I am sure there is a formal redefinition in the 
publication of Army Regulation 220-1 that covers readiness 
reporting and some differences as we have modified that 
requirement over time.
    Generally, however, the same categories are measured, 
generally the same comments are solicited, and generally in the 
same way we have dealt with it, as far as I am concerned, for 
probably the past 25 years.
    The one difference in the Army that has gradually taken 
place, particularly in the past three or four years, is the 
consideration of the quality of life of the trooper and his 
family as a part of readiness, which in the old days was not 
given much consideration.
    If, when we deploy a unit, the conditions that we leave a 
family in, or if the conditions of housing, transportation, 
family and trooper support on an installation are not adequate 
when he is coming back, or if we haven't properly prepared him 
for deployment, then that is a more intangible element of 
readiness.
    We have had difficulty trying to codify what I have just 
defined, but we recognize it now as a very, very important 
piece of readiness.
    Mr. Istook. That would be the major change, the recognition 
of that, even though you haven't been able to codify or 
quantify it.
    General Crouch. As clearly as we would like to--that is 
correct, sir--the deployable numbers, I think, and the way that 
is accounted for, because it can go every place from a prisoner 
is nondeployable to, at a certain stage of pregnancy, a soldier 
is nondeployable.
    What I need to do is get that for the record.
    [Clerk's note.--The Army did not provide a response for the 
record.]

                          MEASURING READINESS

    Mr. Istook. That is a way of measuring the capability of 
the troops, the response. Thank you.
    Admiral Pilling. Sir, we measure our force structure not in 
terms of people, but the ships and the battle force. Now, 
obviously, some of those are in long-term maintenance and are 
not deployable while in that maintenance.
    You should know on a quarterly basis, each of the services 
is required to identify--in the Navy, by the name and hull 
number of the ship, the number of the wing--whether we can meet 
our commitments if we had to make the theater wars within the 
time lines the warfighting CINCs set up for this. We have to do 
this quarterly. Given a day, if you had to do this, starting 
today, could you make it?
    With some exceptions, when we get 10 or 11 carriers there, 
they show up, C-1, C-2, which are the highest states of 
readiness, when we do this on a quarterly basis, if we see a 
problem, then that is what we are going to work on for the next 
3 to 6 months to try and correct that problem.
    So in terms of the deployable force, we can deploy the 
force levels in accordance with the time lines today that the 
CINCs set on us.
    On changes in definition of readiness in the Navy, I can 
only think of one that has been a significant change, and it 
had to do with a certain class of ships. To be C-1 or C-2, you 
had to have all of your torpedo tubes loaded at all times. It 
made no sense. We said, no, if you are within 24 hours of an 
ordnance depot to get those torpedoes, it would be okay.
    General Neal. Sir, we do the same as the Navy on units 
versus individual. Our measure of merit for readiness is unit 
readiness. Personnel, logistics, equipment and commanders' 
comments all apply. I think the real key is that our mission 
has not really changed in the past 15 or 20 years. We still see 
it as a go-to-war footing. We still see it as the central 
ingredient of two ingredients for the Marine Corps' challenges, 
making Marines and winning battles.
    So we see it as our responsibility by law and legislation 
by this Congress. We have to be the most ready when the nation 
is least ready. So time is not the determinant. Basically we 
take that as gospel, and we gear, we budget, we equip, and we 
train our young Marines to meet that requirement.
    I think that General Crouch made a very good point. One of 
the differences that I have seen over the past 15 or 20 years 
is an appreciation by the Marine Corps of the family, because 
really if you can deploy the Marines without the worry about 
their family that is left behind at Camp Lejeune, Camp 
Pendleton or wherever, if he can go out or she can go out with 
peace of mind that they are taken care of, then they are going 
to be that much more an effective fighting force.
    We have created organizations that are structured just for 
that purpose, from key volunteers to links to an infrastructure 
on each one of those bases so they can in fact deploy.
    When Desert Storm went down and actually led out with 
Desert Shield, there were a lot of forces that traditionally 
did not deploy as often as some of the forces that were 
resident in the two divisions here in the United States. But it 
was amazing that they were able to respond, and very quickly 
get up to step for deployment.
    Then finally I would say, on the total force, I think that 
is not just a catchy term as far as the Marine Corps and the 
other services are concerned. The total force makes sure that 
the Reserves are ready to go. Desert Shield, Desert Storm 
confirmed that. Fully 53 percent of our Reserve forces actually 
made it to Southwest Asia. Right now, fully 95 percent of our 
total force, our Reserve elements, are in major war plans for 
the CINCs. So it is across-the-spectrum within the Marine 
Corps.

           MODERNIZING AND INTEGRATING THE RESERVE COMPONENTS

    Mr. Istook. General, let me follow up on something you 
mentioned with regard to Reserve. I am interested in the 
capability of the Reserve forces to mesh with the Active Duty--
as you are going to things that involve more of the electronic 
battlefield, digitizing communications and the other things 
there.
    I would be interested in some comments about how is your 
upgrading, the sophistication of the Active Duty units, how 
that compounds the ability to use the Reserves in a force 
structure that makes the Reserves a more important element than 
ever with the downsizing.
    General Neal. Just following right along, where I talked 
about units, we measure readiness by unit rather than by 
individual. We have 10 combined arms exercises per year out at 
29 Palms; two of those are for the Reserves alone. But during 
the other 10, or the other 8, I should say, Reserve 
organizations, units, join up with their Active Duty brethren; 
and it is almost a seamless transition when you bring their 
units in with our units.
    We will have a Reserve company going down to Panama in 
about 1 month. They will take over an Active Duty mission for 
90 days.
    Right now, as I speak, in Norway, we have a combination of 
both Active and Reserve battalions in Norway doing a major NATO 
exercise in northern Norway.
    So the migration, or I should say the including together of 
the Reserve with the Active structure is seamless, it is almost 
transparent. There are some places where they fall behind in 
some of the improvements in equipment, but basically we know 
that, we identify it, we program for it, and we fix it as 
quickly as possible.
    General Eberhart. When we look at our force and report 
readiness, by the SORTS proces--we do it for every unit, 
whether it is forward deployed or in garrison, to include the 
total force, Air National Guard and Air Force Reserve--as we 
look out there across the force, we slice it a little 
differently. We look at supply squadrons, we look at medical 
squadrons, 95% of reported AF units are C-1 or C-2.
    But we don't want to let the figures mislead us. Then we 
cut it differently, so we know by fighter squadron, by airlift 
squadron or by missile squadron exactly what we are tracking in 
terms of the C-1 and C-2.
    So that is important to us because we know, and it has 
already been addressed, it is whether we are a Guard squadron 
or Reserve squadron or Active Duty squadron, we know we are 
committed to a CINC war plan, and we don't have months to get 
the squadron ready. Every unit that is C-3 or below, we track 
exactly why that unit is C-3 or below and what the projected 
get-well date is, and we measure that get-well date.
    Mr. Istook. Are they meeting the projections on the get-
well dates?
    General Eberhart. Most of them meet, about 75 percent of 
them meet that get-well date. If they don't, it is something 
beyond their control. But we do measure that. Every once in a 
while, we will look back 1 year and say, okay, who was C-3, -4, 
-5? What did they project and how did they do versus the 
projection to make them take a little more interest in making a 
commitment to that projection?
    As we look at standards, I would say, if anything, that 
standards have gotten tougher, once again, for these expanded 
missions. Because of the precision-guided munitions and other 
things, I think we have not lowered the bar; if anything, we 
have raised the bar.
    Mr. Istook. General Crouch, was there anything further 
regarding the integration of the Reserves and the equipment 
differences?
    General Crouch. In near-term, in deployed operations, as 
you know, we have had a heavy commitment from both Army Reserve 
and National Guard.
    As far as peace support operations, for instance in Bosnia, 
the entire civil affairs operation is provided by Army Reserve. 
The only way you can tell that a trooper is not Active duty is 
by knowing that there is a specific specialty that we only have 
in the Reserves, such as civil affairs. But military police, 
hundreds of other specialties it really doesn't make any 
difference. You can't tell between them. That is near-term.
    Sir, as you know, we are using our Army warfighting 
experimentation process to lead us to Force XXI. We focused 
that on the 4th Division at Fort Hood. As we make decisions on 
development, restructuring and so forth, it applies to the 
entire Army--Active, Reserve and National Guard.
    Now, the resourcing piece is based on first to fight; in 
other words, those units that will be first committed will, of 
course, get the first equipment with digitized information 
systems, data flow systems, weapons, and so forth. Our task is 
to make sure that we keep that synchronized throughout the 
entire force, both Active and Reserve--because not all of the 
Active Troopers will get it at the same time, nor will the 
Reserve. That can be done.
    Mr. Istook. Thank you, gentlemen. I appreciate it. For the 
record, I would appreciate getting further information and 
analysis on the get-well process. I think that would be very 
useful information when a unit has dipped below readiness, you 
project a date. It may be something that is beyond your ability 
to effect, but that doesn't mean it is beyond the ability of 
Congress to have an effect on why they might not be able to 
climb out or climb back into readiness as quickly as you have 
projected.
    I think that information would be very useful to us, Mr. 
Chairman, to know about this resiliency and what may be 
affecting it.
    Thank you, gentlemen.
    Thank you, Mr. Chairman.
    Mr. Young. Thank you, very much, gentlemen. We really 
appreciate your being here today. We all understand the 
important role the vice chiefs play in the overall security of 
the Nation, and we appreciate your frank responses to our 
questions.
    We hope that you will pass on, and I ask all my witnesses 
to pass on to your troops how much admiration and respect we 
have for all of them and the job that they do. It is really 
impressive, the things we learn when we get to visit with them 
on the job.
    We have some additional questions that we would like to 
submit to you in writing and ask for you to respond to.
    Admiral Pilling, you made the comment that we have more 
infrastructure than forces. I would like to have an opportunity 
to visit with you all again on that specific subject, because 
many, starting with Secretary Cohen and others in the chain of 
command, have made that very same case, and we would like to 
know more about that.
    Then I would like to say that all of you have great backup 
staff. In all of our hearings, your backup staff is super, and 
I understand that today will probably be the last time that Lt. 
Colonel Brian Kistner is in that capacity, since he is retiring 
and going to Alaska sometime this summer. We want to say how 
much we appreciated working with Brian and the good job he has 
done for the Air Force, General.
    If you all have some closing comments you would like to 
make, this is a good time, because we are going to adjourn the 
hearing until tomorrow.
    General Crouch. Sir, thank you very much.
    Mr. Young. Thank you very much. We appreciate it, and we 
are here to serve.
    The Committee is adjourned until 10 o'clock tomorrow 
morning when we will hear from Members of Congress and outside 
witnesses.
    [Clerk's note.--Questions submitted by Mr. Istook and the 
answers thereto follow:]

                        Non-Deployable Personnel

    Question. How many personnel and what type of personnel does your 
Service have that are categorized as ``non-deployable?'' Are they 
permanently ``non-deployable'' and if not, how long before they are 
deployable? What is your policy on returning ``non-deployable'' 
personnel to deployable status?
    Navy Answer. Occasionally, Sailors assigned to deployable units 
must be temporarily assigned to non-deployable units. The type of 
personnel vary as do the reasons for reassignment. Reasons include but 
are not limited to hardship and medical necessity. Less than 2% of our 
Sailors are considered non-deployable at any given time. Of those 
Sailors, nearly all (approximately 98%) return to a deployable status 
within one year or leave the service. The rest are permitted to 
continue on active duty, in a permanent non-deployable status, until 
separation or retirement.
    Marine Corps Answer. There are five primary reasons Marines are 
reported as non-deployable once they have obtained MOS proficiency and 
are assigned to a deployable unit of the operating force. While 
humanitarian reasons and Commanders Decision reasons are tracked, they 
are absorbed in the Administrative and Legal categories. At the end of 
FY97, the Marine Corps had the following number of non-deployables:

Medical........................................................... 4,213
Administrative.................................................... 1,794
Legal............................................................. 1,446
                                                                  ______
    Total......................................................... 7,453

    Headquarters Marine Corps does not collectively track the number of 
days until a Marine can be returned to a fully deployable status, if it 
can be determined at all. Legal and many of the Medical cases require 
an undetermined amount of time for resolution. We cannot predict the 
amount of time that might pass before AWOLs/Deserters, detained/missing 
will return. While pregnancy duration and maternity leave can be 
estimated, an exact date of full deployability cannot be easily 
discerned.
    Whenever possible and with the unit commander's recommendation, 
non-deployable Marines will be returned to a deployable status as soon 
as possible.
    For the medical PLD and TLD programs managed by HQMC, the goal is 
to get our sick/injured Marines fully fit for duty as quickly as 
possible, while assuring our disabled Marines (whose careers have been 
ended prematurely by a disability) receive the medical care and 
financial benefits they are entitled to. This mission is accomplished 
by utilizing periods of TLD to allow Marines who are not in a fully 
duty status the opportunity to recover and return to a fully duty 
status. Upon determination by a competent medical authority, a Marine 
who is determined to be fully fit for duty will be returned to a 
deployable status.
    Air Force Answer. Generally, on any given day, about 11.4 percent 
of Air Force personnel are non-deployable. Approximately 8.9 percent 
are temporarily non-deployable for administrative reasons (for example, 
students, transients, those awaiting processing for separation, 
retirement of discharge). These situations are quickly resolved (less 
than one year).
    About 2.5 percent are non-deployable for medical reasons. As of 
March 31, 1998, the following are reasons for personnel being 
unavailable to deploy:

                                                        Percent of Force
Reason
    Pregnancy.....................................................  1.10
    Assignment limitation code C \1\..............................  0.73
    Medical deferment \2\.........................................  0.41
    Medical board processing......................................  0.31
    Substance rehabilitation......................................  0.18
    Hospitalized or sick in quarters..............................  0.04

\1\ Assignment limitation code C is for personnel with significant 
medical conditions who are fit for duty and do not meet the criteria for 
medical separation or medical retirement. They are assignable to an 
overseas location or deployment on a case-by-case basis. Common 
conditions among members on code C are seizure disorders, diabetes, 
cardiac condition, asthma, cancer, HIV, and inflammatory bowel disease. 
These cases are reviewed when a significant change to a member's 
condition occurs or in one year--whichever comes first. Over half of the 
personnel on code C have more than 15 years of service and, although not 
deployable contribute because of their experience and technical 
expertise. The Air Force will soon implement a further stratification of 
members on code C by severity of illness. This is to increase the 
deployability of those whose condition is mild or moderate.
\2\ Medically deferred individuals are those who have an injury or 
illness limiting duty for an extended period, but who expect to make a 
full recovery in less than 1 year.

    Question. What impact do these people have on readiness and 
PERSTEMPO?
    Navy Answer. The unanticipated loss of a Sailor could potentially 
affect the readiness of a deployable unit if a critical rating was 
impacted. However, this would only be temporary since a replacement 
would be immediately identified and detailed to fill the emergent 
requirement.
    Since the Navy's PERSTEMPO program is based upon the length of time 
a unit spends away from home, the unanticipated loss of a sailor will 
not impact PERSTEMPO.
    Marine Corps Answer. Although this has not been a major problem for 
the Marine Corps, non-deployables lower the readiness ratings of units 
and the Marine Corps overall. Non-deployables are subtracted from 
unit's Status of Resources and Training System (SORTS) reports since 
they will not be available to go to war with the unit. In addition to 
the readiness reports, we also consider the effects of non-deployables 
throughout the Corps. The Marine Corps is limited in its total end 
strength, so non-deployable Marines take away from the number of fully 
qualified Marines we are allowed to possess. This in turn, increases 
the work load of those fully qualified, deployable Marines.
    The Marine Corps does not measure PERSTEMPO, it measures Deployment 
Tempo (DEPTEMPO) because it deploys as it trains and fights--as units, 
not as individuals. That said, we can still make inferences on 
PERSTEMPO. Because non-deployables are not immediately discharged, 
deployments made by personnel of the same Military Occupational 
Specialty (MOS) type must be absorbed by those Marines still 
deployable. In a few specialty high demand technical MOSs, this could 
potentially create an individual tempo problem. However, we rely on our 
unit commanders to ensure their personnel are not being overdeployed, 
and to report problems up the chain of command in order to provide 
relief for those Marines.
    Air Force Answer. Generally speaking, based on the number and types 
of non-deployable people involved (e.g., patients, prisoners, trainees, 
and transients), the impact to overall Air Force readiness is small. 
The principal result would be a reduction in the available pool and, 
therefore, a small increase in the overall PERSTEMPO for the deployable 
force.

                          Readiness Definition

    Question. What is your definition of readiness? Have there been any 
changes to regulations in defining readiness? Please provide copies of 
those regulations.
    Navy Answer. The Joint Staff defines readiness as the ability of 
forces, units, weapon systems or equipment to deliver the outputs for 
which they were designed. Said another way, readiness is a function of 
capability (having the proper equipment) and ability (being able to use 
that equipment to fight and win wars).
    Well-trained people, operating modern, well-maintained equipment in 
the right numbers, constantly patrolling the world's trouble spots, are 
the trademarks of your Navy and being able to meet all commitments 
throughout the full range of the National Military Strategy has always 
been our foundation for assessing readiness.
    Marine Corps Answer. Generally, readiness is defined by the Marine 
Corps as a unit's ability to meet its wartime missions and taskings.
    Readiness is also defined as different things at different levels:
    --At the unit or tactical level (battalion and squadron level for 
the Marine Corps), readiness is defined as the ability to provide 
capabilities required by the Marine Expeditionary Forces (MEFs) and 
Marine Forces Atlantic (MARFORLANT)/Marine Forces Pacific (MARFORPAC) 
in support of CINC requirements to execute assigned missions.
    --At the Service and Joint Staff level it is defined as the CINCs 
or components ability to synchronize ready combat and support forces to 
execute assigned missions.
    Have there been any changes to regulations in defining readiness?
    There have been no major changes to the definition of readiness by 
the Marine Corps. The Joint Staff has developed additional definitions 
of readiness that further apply it to the Joint environment, especially 
in regard to the CINCs and Combat Support Areas (CSAs).
    Air Force Answer. The standard definition of readiness is provided 
in CJCS Guide 3401A, published on 31 July 1997 (superseded CJCS Guide 
3401, dated 1 Oct 95) as follows:
    ``The readiness of US military forces to fight and meet the demands 
of the National Military Strategy is the synthesis of two distinct but 
interrelated levels of readiness:
    Unit Readiness: The ability to provide capabilities required by the 
CINCs to execute their assigned missions. This is derived from the 
ability of each unit to deliver the outputs for which it was designed.
    Joint Readiness: The CINC's ability to integrate and synchronize 
ready combat and support forces to execute assigned missions.''
    The Air Force agrees with these definitions. A copy of CJCS Guide 
3401 is attached.

              [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]




    [Clerk's note.--End of questions submitted by Mr. Istook. 
Questions submitted by Mr. Young and the answers thereto 
follow:]

                    Overall Readiness of U.S. Forces

    Question. In previous year's hearings witnesses before this 
Committee have cautioned that readiness is ``fragile'' and ``on the 
edge.'' Recent press accounts, and data developed by the Surveys and 
Investigations staff indicates that there is evidence of readiness 
problems in the U.S. armed forces. The S&I staff notes that within the 
bands of readiness reported under the Status of Readiness and Training 
System (SORTS), many field commanders feel that they are presently on 
the low end of that category. Generally, how would you characterize the 
readiness levels of the Active duty enlisted forces? Are they staying 
proficient for their warfighting mission? Are the enlisted forces 
suffering readiness problems because personnel, dollars, and other 
resources are being diverted to peacekeeping missions such as the open-
ended operations in Bosnia and Southwest Asia?
    Army Answer. There has been no major change in the overall level of 
readiness within the Army. While the Army is smaller, it is not less 
combat ready than five or six years ago. Those forces needed to fulfill 
the Army's role in national defense can do so as required by the 
warfighting Commanders-in-Chief.
    The requirement to train for and perform peace operations and 
contingency operations does degrade warfighting Mission Essential Task 
List (METL) skills of combat and combat support units. Combat service 
support (CSS) units suffer far less readiness degradation because peace 
operations tasks closely relate to those CSS units' wartime METL tasks. 
The cross leveling requirement is especially demanding on non-deploying 
units, which must provide leaders and CSS soldiers to deploying units. 
However, a temporary decrease in readiness within selected units is an 
unavoidable price for the Army's execution of our Nation's policy of 
engagement. Furthermore, the Army has taken great steps to minimize 
readiness degradation due to peace and contingency operations through 
deployable training packages, distance learning initiatives, 
simulations, and other training related initiatives.
    Navy Answer. Today, Navy's readiness is adequate to meet all 
operational commitments. On any given day, approximately 30% of our 
forces are deployed around the world and ready for combat if necessary. 
The remainder are home or operating near CONUS in various stages of 
readiness as they prepare for their next deployment.
    Marine Corps Answer. The Marine Corps' forward deployed and forward 
based ``first to fight'' unit readiness remains high. To sustain these 
forces, however, units at home base who have just returned from 
deployment are experiencing longer, and in some cases deeper, troughs 
of degraded readiness. Aging equipment is our primary readiness 
concern. Aging equipment means increased maintenance time, effort and 
expenses. Spare parts costs are continuing to increase, further 
draining our operations and maintenance (O&M) funding needed to sustain 
us. As the Marine Corps maintains current readiness first, even to the 
detriment of training, quality of life (QOL), maintenance of real 
property (MRP), and modernization, we endanger our long term readiness.
    Funding of unprogrammed contingency and disaster expenditures, such 
as those reported to Congress (reimbursement of which was requested in 
the emergency supplemental funding bill) is required in order to 
maintain the balance of current readiness with training, QOL, MRP and 
modernization.
    Air Force Answer. Today, measured against the JCS reporting 
criteria, your Air Force is ready to execute its responsibility within 
the National Military Strategy; however, high TEMPO, aging aircraft, 
deteriorating infrastructure, and thinly-spread forces are putting a 
considerable strain on our airmen, both deployed and at home, and their 
ability to maintain our force in a high state of readiness.
    Question. What is the trend in the overall readiness of U.S. 
forces? Illustrate with examples.
    Army Answer. While the Army is smaller, on an individual unit basis 
the Army is no less combat ready than five or six years ago. However, 
due to the occurrence of a recruiting shortfall in certain specialties 
(particularly infantry), coupled with a temporary strength shortfall 
that had been deliberately programmed in order to take care of our 
force during the Army's downsizing, some units have experienced spot 
personnel shortages. This situation was more pronounced during the 
latter half of 1997. The recruiting issue has been corrected and the 
programmed temporary strength shortfall is getting better. We do not 
anticipate that personnel shortages will be a problem for the Army in 
1998. We have achieved considerable success in bringing force structure 
and end strength into greater balance. Consequently, the latest Unit 
Status Reports indicated that unit-manning levels are getting 
measurably better. Funding concerns have replaced manning as the number 
one issue for commanders in the field. This is not unexpected and 
reflects the delicate balancing act we are orchestrating at the 
Headquarters, Department of the Army, level.
    Navy Answer. Navy's overall readiness trend continues to be 
satisfactory. Deployed readiness remains high, but because of our 
cyclical readiness posture, we expect non-deployed readiness to be at a 
lower level of readiness. This is a direct result of units entering the 
Inter Deployment Training Cycle (IDTC), where ships and aircraft 
undergo maintenance and warfighting skills and proficiencies migrate to 
a basic level due to crew turnover and a lack of opportunity to train 
while in maintenance periods. We have found that this cyclical posture 
makes the most efficient and effective use of constrained resources. 
However, this efficiency means that funding shortfalls, when they 
occur, have a greater and more rapid impact today than in the past.
    For example, last year, flying hours were underpriced and there was 
a shortfall in our aviation readiness account. This shortfall had a 
significant effect on the material condition of non-deployed aircraft 
during the six month period prior to deployment and was the predominant 
cause of a decline in deployed aircraft Mission Capable (MC) and Full 
Mission Capable (FMC) rates. The FY98 Congressional plus-up, in 
addition to the funds added to our readiness accounts for FY99-03, will 
facilitate the procurement of additional resources to enhance 
readiness. Specifically, it will allow our maintainers to order the 
necessary parts and perform the essential repairs needed to improve the 
material condition of our ships and aircraft. We have already observed 
improvement in MC and FMC rates and are optimistic these trends will 
continue.
    Marine Corps Answer. The Marine Corps overall trend remains high in 
our forward deployed, first-to-fight units although the readiness 
trough is getting wider and deeper for those units that have just 
returned from deployment. The USMC maintains a cyclical approach to 
readiness, with ``first-to-fight'' units in high readiness and units 
having just returned dropping to lower levels when necessitated by 
funding constraints. Some examples are:
    Forward deployed unit: The 11th MEU (SOC), embarked aboard the 
Tarawa ARG in the Northern Arabian Gulf has a ground equipment 
readiness rate of 99.1 percent, and an aviation mission capable rate of 
100 percent, where a forward deployed unit should be.
    Just returned unit: Infantry Bn--1st Battalion, 5th Marines 
returned from deployment in November 1997, immediately lost many 
personnel to schools, enlistments expiring and reassignment, and have 
yet to receive replacements for all of their losses. As a result, they 
have neither the personnel required to maintain all of their equipment 
at a high level, nor the replacement parts or repair priorities to do 
so. They will return to higher levels 3-6 months prior to deployment.
    Air Force Answer. Today, we are capable of meeting our wartime 
taskings; however, the overall trend in readiness is decreasing 
slightly--the total number of major operational units reporting C1/C2 
has declined 10 percent in the last 18 months. Some of this decline is 
due to high levels of TEMPO over an extended period. The effects of 
extended high TEMPO are seen as negative indications in several 
reporting areas. It is taking a greater effort to maintain this desired 
level of readiness. Retention rates for pilots, navigators, and several 
critical enlisted skill areas are all declining below our goals. 
Overall aircraft mission capable rates have declined nearly nine 
percent since the end of DESERT STORM.
    The reasons for these changes are, as you know, diverse and 
complex--high TEMPO, airline hiring, budget cuts, strong economy, and 
perceptions about future benefits, promotions, etc. We will continue to 
work these issues hard and appreciate the full support of Congress in 
our modernization, readiness, and quality of life initiatives to 
reverse adverse trends.
    Question. The Committee has been advised that an additional 
$1,000,000,000 has been added to the Operation and Maintenance accounts 
to shore up readiness. What is the share of this funding that each 
service has received? What are the specific purposes of this added 
readiness funding?
    Army Answer. The Army added $64,000,000 to its Operation and 
Maintenance, Army, readiness accounts in fiscal year 1999. The majority 
of this increased depot maintenance funding occurred in the aircraft, 
missiles, and other (communications-electronics, ships, small arms, and 
other categories) commodities. Some of the increase was applied to high 
priority systems, such as the AH64 Helicopter, the M1 series of tanks, 
and the Patriot missile system.
    Navy Answer. Readiness continues to be our primary focus with 
flying hour and ship operations programs funded to meet Primary Mission 
Readiness (PMR) and OPTEMPO goals, while maintaining manageable levels 
of airframe, aircraft engine and ship maintenance backlogs. 
Accordingly, the FY1998/FY1999 Biennial budget for Flying Hours and 
Ship Mission operations were increased about $400 million. These 
increases were offset somewhat by reduction to air and ship depot 
maintenance accounts consistent with Quadrennial Defense Review 
decisions. These adjustments essentially parallel FY 1998 Congressional 
action.
    Air Force Answer. The FY99 budget submission continues to focus on 
near-term readiness by increasing funding for spares and depot 
maintenance. Specifically, the FY99 Air Force budget includes an 
additional $425 million for those purposes.

                      Moral of Deployed Personnel

    Question. Gentlemen, as you are aware, the Department recently sent 
a $2,000,000,000 fiscal year 1998 supplemental request to Congress to 
cover the costs of ongoing operations for Bosnia and Southwest Asia. 
What is the state of morale of the troops presently deployed for either 
Bosnia or the Southwest Asia operations?
    Army Answer. I believe morale is surprisingly good when soldiers go 
on real world deployments. As I noted in my testimony, soldiers in 
Europe, who are bearing the major burden of the deployment to Bosnia, 
tend to reenlist at rates higher than the Army average. They feel that 
they are doing what they came into the Army to do, and that gives them 
a sense of accomplishment.
    Navy Answer. Morale is high. There are some concerns over high 
deployment rates, but in general we are meeting the guidelines of 
Navy's PERSTEMPO Program (six month deployments, 2.0:1 TAR and no 
greater than 50% away from homeport in a five year period).
    Air Force Answer. The strong moral in Bosnia is linked to the Air 
Force members' belief that they are contributing to peace in Bosnia and 
is bolstered by improved quality of life for deployed members and their 
families back home. Effective quality of life programs are an essential 
element in retaining our people and increasing our readiness. In 
Bosnia, we have seen across-the-board improvements in the troops' 
morale through enhancements in billeting, libraries, recreation 
opportunities, and fitness programs. We have also instituted morale 
phones, and installed video tele-conferencing and computer capability 
for calls and e-mail home.
    Southwest Asia brings different challenges to deployed troops. Long 
absences from families and tent city living are starting to take a 
toll. To meet these challenges, we have established at Prince Sultan 
Air Base, Saudi Arabia, a large morale, welfare and recreation program, 
including: a video/movie check-out center; moral phones; video tele-
conferencing and e-mail capabilities; concerts; and three recreational 
centers offering a basketball court, weight and exercise equipment, and 
aerobics classes. Over the past year, we have further improved the site 
with above ground swimming pools, a theater, a library and an amusement 
machine arcade. Housing improvements are also underway. The Prince 
Sultan Air Base housing complex is nearly complete with an estimated 
occupancy date of July 1998.
    Question. How have these deployments and any future rotations 
affected the troops personnel tempo, and their quality of life at home, 
and your reenlistment rates?
    Army Answer. In fiscal year 1997, the average time deployed for 
those soldiers deploying on temporary duty/temporary change of station 
orders was 125 days. This represents a decrease from the 196 average 
days deployed in fiscal year 1996. The primary reasons for the 
reduction were decreased deployment lengths and a reduction in the 
number of soldiers in Bosnia in fiscal year 1997. To date, personnel 
tempo has not impacted retention. Army statistics indicate that in 
frequently deployed units, soldiers are reenlisting at rates above the 
Army average. Soldiers in units deployed to Bosnia have reenlisted at 
rates that exceeded the Army average. On the other hand, Army surveys 
from 1994 to 1997 indicate the more time soldiers spend away from their 
duty station, the less likely they are to be satisfied with the 
``amount of time a soldier is separated from family.'' For those 
leaving or are thinking of leaving the Army, a major reason for leaving 
(8-10 percent) is the ``amount of time a soldier is separated from 
family,'' but the amount of time away from the duty station has little 
relationship with Army career intentions (leaving, staying in beyond 
present obligation, or staying in until retirement).
    Navy Answer. Navy is committed to providing the best possible 
quality of life for our Sailors, both at sea and at home. Although we 
do not have any statistics or specific, demonstrable evidence that 
current operations/deployments have affected quality of life at home 
for our personnel, we are very much aware of the links between OPTEMPO, 
PERSTEMPO and Quality of Life, and carefully watch to ensure that the 
Fleet Units remain within our established standards. Deployments are a 
normal part of any Sailor's sea duty experience, and we appreciate the 
family separations and personal sacrifices that go along with this. 
Consequently, we take great effort to care for Sailors and their 
families before, during, and after these deployments. In fact, the 
Navy's Deployment Support Program (which includes pre-deployment 
briefings to families, continuing support during deployment, and the 
Return and Reunion Program) is one of the most popular and well-
received Quality of Life programs we provide. We know, both from 
experience and responses to personnel surveys, that Quality of Life 
programs are an important factor for Fleet readiness. To this end, we 
try to offer a wide range of support programs to service members and 
their families.
    Air Force Answer. It is hard to isolate the effects of deployments 
to Bosnia and Southwest Asia from those of other deployments and 
temporary duty assignments (TDY). These deployments have contributed to 
increased TDY rates for some airmen because over the past nine years we 
have decreased the number of military personnel by 36 percent while 
supporting four times as many deployments--on any given day in FY97 
16,400 airmen were deployed and approximately 20,000 are deployed 
today.
    To reduce tempo, we have reduced time in JCS exercises by 15 
percent, initiated post-deployment stand downs and reduced aircraft 
rotations in Air Combat Command from 90 to 45 days. We also plan to 
reduce Operational Readiness Inspections (ORIs) by 10 percent in FY98 
and by 30 percent in FY99 through inspection credit during real-world 
deployments. Quality Air Force Assessments were also terminated in 
FY98.
    Like other deployments, deployments to Bosnia and Southwest Asia 
create quality of life stressors for our airmen. Recently, Air Force 
leadership revalidated our seven Quality of Life priorities to help our 
troops--pursue fair and competitive compensation and benefits; balance 
the impact of high tempo; provide access to quality health care; 
provide access to safe, adequate and affordable housing; preserve a 
stable retirement system and benefits; enhance community support; and 
expand educational opportunities. In addition, we added Readiness NCOs 
to Family Support Centers at bases to help families of deployed members 
and installed Video Links to improve communications between deployed 
members and their families.
    As far as the impact these deployments are having on reenlistment 
rates, interestingly, reenlistment rates do not tend to decline for 
individuals with a high number of days TDY. A review of FY97 TDY data 
revealed no significant decline in reenlistment or retention data for 
those specialities that went TDY. Although this data is encouraging, we 
should be careful to not draw long-term implications. It is reasonable 
to expect that if TDY days remained high for multiple years, 
reenlistment rates would show some decline.

      Contingency Operations' Effect on Long-Term U.S. Commitments

    Question. In your opinion, do you feel we can continue to sustain 
the U.S. commitments around the world given the continuous deployments 
to the Persian Gulf and now the extended deployment to Bosnia?
    Navy Answer. Yes. The Navy is supporting these commitments with 
regularly scheduled forward-deploying forces. In the short term, this 
will not affect readiness. However, unfunded contingencies result in 
funds being diverted from non-deployed forces. This negatively impacts 
the balance of current readiness across the force by delaying equipment 
repairs and disrupting training. In the long term, these commitments 
can be maintained but will present the Navy with some challenges. If 
two carriers remain a requirement in the Gulf, a condensed Inter-
Deployment Training Cycle (IDTC) will be required and some work, 
scheduled to be accomplished during upcoming ship and aircraft 
maintenance availabilities, will be deferred.
    Air Force Answer. The Air Force can continue to sustain taskings in 
support of U.S. commitments around the world, including deployments to 
the Persian Gulf and Bosnia, but there is a cost.
    For the past seven and one half years, our airmen have been 
deployed at a rate unprecedented in our peacetime history. By 1 June 
98, we expect 13 of 27 Air Force flying units deployed in support of 
SOUTHERN WATCH to exceed our maximum desired average TDY rate of 120 
days away form home station per year. We also anticipate that current 
contingency taskings will continue near their present rate for quite 
some time.
    The effects of extended high TEMPO are revealed by negative 
readiness indications in several areas, leading us to the conclusion 
that it is taking greater effort to maintain desired readiness. 
Retention rates for pilots, navigators, and several critical enlisted 
skill areas are all declining below desired levels. Overall aircraft 
mission capable rates have declined nearly nine percent since the end 
of DESERT STORM.
    Normal work stress becomes acute across the force when the deployed 
mission includes the need to rotate units, time and again, over an 
extended period. As a result, we are looking seriously at ways to 
restructure ourselves to better support these enduring rotational 
taskings in order to mitigate the effects on our people.

                Effect of No Supplemental Appropriations

    Question. The Service Chiefs have provided the Congress with 
letters detailing some of the impacts to training and near term 
readiness if the Supplemental request is not approved in a timely 
fashion, or if the Supplemental has to be offset within the Department. 
Can you provide us with some specific examples of impacts to the 
enlisted forces if combat training, home station training, depot level 
maintenance, real property maintenance, and other quality of life funds 
are not restored?
    Navy Answer. Unfunded contingencies result in funds being diverted 
from non-deployed forces. This means that our non-deployed forces don't 
have the funds to order parts or perform scheduled maintenance. As a 
consequence, maintenance is delayed until the last possible minute, 
training is disrupted and the readiness of our non-deployed units is 
degraded. Deferring maintenance and training requirements to the last 
minute before the ships and aircraft deploy means our Sailors will have 
to work harder and longer in a condensed period of time to ensure they 
are combat ready for deployment. Such actions seriously impact and 
degrade the quality of life of our Sailors and their families.
    Air Force Answer. The supplemental request was approved and signed 
into law on 1 May 1998. Had the supplemental not been approved in a 
timely fashion, or if the Air Force had been required to offset it 
internally, there would have been a direct and immediate impact on 
training and near-term readiness. Specifically, we would have been 
forced to defer programmed depot maintenance, terminate non-contingency 
aircrew training, postpone quality of life initiatives, terminate 
various real property maintenance contracts, and begin civilian 
furlough actions. The impacts of such actions would have included 
grounding of aircraft through the end of the fiscal year, deferral of 
programmed aircraft modifications, a rapid decline in proficiency and 
readiness, loss of special combat capabilities, increased risks to 
health and safety, and a reduction in quality of life across the board.

     Contingency Operations' Effect on Non-Deployed Unit Readiness

    Question. Explain how those units in your service, who are not 
deploying to Bosnia, the Persian Gulf, or other operations, have been 
affected by the shortage of funds. For instance, are funds available to 
buy spare parts to keep squadrons flying, etc?
    Army Answer. In executing the National Military Strategy the 
``shaping'' and ``preparing'' pillars are funded in the President's 
budget, but actual operations, such as Bosnia and Southwest Asia, are 
not funded in advance, often relying on Congressional action. 
Therefore, commanders are forced to migrate funds from training 
accounts to pay for contingency costs as they occur until Congress 
provides supplemental funding. Additionally, there is a readiness bill 
associated with all small-scale contingency deployments. When we deploy 
an Army unit to a potentially hostile environment where its performance 
could dramatically effect national policy and prestige, that unit is 
provided all of the training, personnel, and equipment resources needed 
to maximize its chance of success. It is brought to the highest 
standard of readiness which time and resources allow. The bill payers 
are the non-deploying units, with personnel and equipment from non-
deploying units being provided as augmentations to deploying units. 
This readiness bill is the price we pay for accomplishing our Nation's 
policy of shaping the international security environment in ways 
favorable to U.S. interests, yet doing so within a constrained budget.
    Air Force Answer. The current ongoing deployments to Bosnia and the 
Persian Gulf have not inhibited our overall ability to support the 
National Military Strategy of the United States. Those units remaining 
stateside are still capable of successfully performing their assigned 
missions; however, had we not received timely passage of the 
supplemental request, these units would have experienced impacts to a 
wide range of areas, including proficiency training and base support 
activities. Funding to support direct readiness requirements, including 
spare parts, remains a top priority at all levels of the Air Force. 
Without the supplemental request, the Air Force would have been 
required to offset it internally, with resultant impacts on non-
deployed units. Specifically, we would have been forced to defer 
programmed depot maintenance, terminate non-contingency aircrew 
training, postpone quality of life initiatives, terminate various real 
property maintenance contracts, and begin civilian furlough actions. 
The impacts of such actions would have included grounding of aircraft 
through the end of the fiscal year, deferral of programmed aircraft 
modifications, a rapid decline in proficiency and readiness, loss of 
special combat capabilities, increased risks to health and safety, and 
a reduction in quality of life across the board.

               Air Force Deployments and Force Structure

    Question. The Air Force has developed a concept for deployment 
called the Air Expeditionary Force (AEF). The personnel, support 
equipment and aircraft needed to field an AEF are drawn from various 
CONUS based units. Two AEFs are currently deployed in support of U.S. 
operations in Southwest Asia. These AEFs plus other assets deployed to 
the Persian Gulf effectively add two wings to the Air Force structure 
without the airplanes to equip them, crews to man them, or support 
personnel to run them. This has created negative, Service-wide impacts 
on personnel and readiness. Please describe for the Committee what 
constitutes an Air Expeditionary Force.
    Air Force Answer. An Air Expeditionary Force (AEF) is a package of 
aerospace forces, tailored to meet the needs of theater Commanders in 
Chief (CINCs). Our goal is to further develop and expand our abilities 
to respond globally within 48 hours of an Execution Order. This 
operational concept is based on the premise that an effective military 
response during the early stages of a crisis is key to deterring 
conflict, seizing the initiative, and resolving the situation on terms 
favorable to the U.S. and its allies. AEF forces are light, lean, and 
highly capable of deploying and employing rapidly, thereby leveraging 
the inherent strengths of aerospace power--versatility combined with 
speed, flexibility, and the global nature of our reach and perspective. 
AEFs are planned to meet a CINC's time-critical mission objectives and 
offer the National Command Authority (NCA) a rapidly executable 
military Course of Action (COA).
    An AEF may be composed of any combination of aerospace assets which 
perform one or more of the Air Force's basic functions: Counterair, 
Counterspace, Counterland, Countersea, Strategic Attack, 
Counterinformation, Command & Control, Airlift, Air Refueling, 
Spacelift, Special Operations Employment, Intelligence, Surveillance, 
Reconnaissance, Combat Search and Rescue, Navigation & Positioning, or 
Weather Services. An AEF can be designed to accomplish any mission 
across the spectrum of military operations. To date, we've sent six 
AEFs to support OPERATION SOUTHERN WATCH with a force composition of 
approximately 30 fighters, 3 bombers, 4 tankers, and required combat 
support forces. These deployments have provided a baseline for further 
development and expansion of the AEF concept. This continued 
development of our capability to rapidly conduct and sustain AEF 
operations will offer the NCA options to reduce our rotational presence 
commitments.
    Question. How does the Air Force go about assembling the personnel, 
aircraft and support equipment to outfit an AEF for deployment?
    Air Force Answer. The Air Force component commander develops a 
listing of personnel and equipment requirements for the Air Force 
portion of the supported Commander-in-Chief's (CINC's) stated 
objective. This listing reflects the combat/combat support forces to be 
employed and the requirements for movement of replacement personnel, 
along with supplies and equipment. Once an operations order (OPORD) is 
issued, the MAJCOMs designate actual units in the listing to allow the 
supporting CINC to satisfy the force requirements established by the 
supported CINC. When units are designated to participate in a planned 
operation, the responsible commanders place the units in a deployment 
readiness condition according to the priority for deployment.
    Generally, the Air Force designates force capabilities by Unit Type 
Code (UTC) which uniquely identify each type of force capability. These 
UTCs are then filled (sourced) using actual Air Force combat forces. 
Active duty resources are used for the most part, but Air Reserve 
Component (ARC) forces are also sourced. In fact, some force 
capabilities exist only in the ARC. Resources that are not available 
from the combat unit are sourced from combat support UTCs located at 
the home station. Remaining UTC requirements are sourced from other 
locations. Integrity of the combat unit will be maintained to the 
maximum extent possible.
    All Air Expeditionary Force (AEF) deployments have the ability to 
reliably and selectively apply precise aerospace power. These AEFs are 
tailored to mission success with the right combination of capabilities 
and people to match any challenge. An AEF is rapidly deployable to any 
part of the world and can decisively apply the selected air and space 
capabilities across the spectrum of crises.
    Question. What impact does the deployment of an AEF have on the 
CONUS units from which its assets are obtained? What happens to 
readiness? OPTEMPO? PERSTEMPO?
    Air Force Answer. Ideally, Air Expeditionary Forces provide a rapid 
response force which can deploy for a short time, at a bare base 
location, to support an unforeseen crisis or contingency. Continuous 
and frequent force rotations to semi-permanent, previously unprogrammed 
bases have a large impact on readiness. These rotations increase the 
workload for everyone, whether they are deployed or at home. 
Furthermore, readiness suffers significantly if supplemental funding is 
late or has to be offset from other programs, or if training in the 
deployed location is limited. Obviously, as more deployments and 
rotations need to be supported, OPTEMPO and PERSTEMPO will increase.
    Question. What changes does the Air Force plan to make to the 
basing of its personnel and equipment assets to minimize the disruptive 
effects of deploying an AEF?
    Air Force Answer. We are currently examining this very issue and 
expect to have specific recommendations later this year. As you know, 
over 14,000 Air Force personnel are deployed in support of rotational 
deployments and other contingencies. This represents a four fold 
increase in our deployments during the past 10 years while we have 
incurred a 36% drawdown in forces; a drawdown which has not been 
matched by a commensurate drawdown in infrastructure. Fulfilling our 
requirements for both rotational and unplanned commitments increases 
schedule variation and decreases stability for our force and their 
families. It is likely this pattern will remain the norm for the 
foreseeable future.
    Hence, our first step is to explore and refine current concept of 
operations and logistics associated with the deployment and employment 
of Air Expeditionary Forces (AEFs). We are striving to bring 
flexibility and predictability to the force, and our goal is to 
equitably distribute taskings to decrease TEMPO. This includes the 
total integration of active and reserve forces to meet the demanding 
tasks of today and tomorrow. Our second step is to examine basing 
strategies to ensure the effective use of limited resources as we 
continue to work within a constrained budget environment. It is our 
belief that we presently maintain infrastructure above and beyond what 
is necessary to support our current and foreseeable force structure. 
This excess infrastructure spreads our forces thinly across numerous 
bases, which are not operating at peak efficiency, and draws away 
critical resources needed to support our warfighting and modernization 
efforts. We need to move towards a smaller number of more robust bases 
where we can have the depth and breadth of deployable operational and 
support forces and still retain viable operations and support at home.
    These efforts are designed to exploit the unique aspects of 
aerospace power as we evolve to becoming an Expeditionary Aerospace 
Force (EAF). This evolution will become our institutional focus and 
guide our future strategic planning efforts. It requires that we 
examine the best means to institutionalize and adjust our 
organizational and management processes to meet the expeditionary 
nature of our worldwide requirements.

       Operations Other Than War and Degradation of Combat Skills

    Question. It has become common practice when supporting military 
operations other than war to split units between home-station and 
deployed locations, making it difficult to rapidly respond to a major 
regional conflict. For example, the 1st Armored Division in United 
States Army, Europe, has half its command in Bosnia and the other half 
in Germany. Reconstituting would take a major logistics effort, even 
assuming all elements were fully trained to take on high-intensity 
conflict mission. In addition, the Army units may require as much as 
180-270 days in order to regain proficiency in combat related skills. 
Does the Army have adequate training assets such as training ranges to 
ensure that all elements deployed to military operations other than war 
could be retrained within a six- to nine-month period?
    Army Answer. Yes. The Army has adequate training assets, including 
training ranges, for deployed units to regain combat proficiency. 
Although the number of training ranges and assets are adequate, the 
time to regain combat proficiency also depends on how well units 
develop, schedule, and execute their training plans. The Army does not 
stop training while supporting operations other than war. Units 
routinely deploy with training plans, training support packages, and 
training simulators and simulation devices. For live-fire training, 
units use portable targets and lifting devices to maintain individual, 
crew, and unit weapons qualification. Commanders are responsible for 
assessing and maintaining unit readiness and for prioritizing training 
tasks. Units may not be able to train on every mission essential task 
and combat related skill, but they maintain readiness on most. It 
depends upon the type of unit involved and the duration of the mission 
executed. It is important that we continue to modernize and sustain our 
training capability.
    Navy Answer. Current training assets are adequate to meet the 
Navy's cyclical requirements. The Navy monitors and periodically 
assesses these training assets to ensure they are adequately meeting 
deployment posture requirements.
    Marine Corps Answer. Overall, the Marine Corps does have adequate 
training assets and ranges to support training of deploying units. As 
most Marine contingency response taskings are met by our forward 
deployed rotational units, fresh Marine units are always prepared to 
replace returning units. Retraining of units is not a major issue for 
the Marine Corps. Our units deploy with adequate training to meet 
contingencies in Military Operations Other Than War (MOOTW), and our 
training assets and ranges support this requirement.
    Air Force Answer. From a national perspective, the Air Force has 
sufficient training assets to accomplish required retraining. We are 
working to remedy some localized training range and airspace issues, 
and we are implementing needed quality improvements to our simulators; 
however, these issues do not limit the Air Force's ability to retrain 
our deployed forces within the stated period.
    Question. The Committee understands that there would be a major 
logistics effort needed to move troops in order to conduct training 
after a rotation to Bosnia. In addition to the time needed to conduct 
training, what amount of time would be needed to assemble the units to 
conduct such training?
    Army Answer. No additional time is required to preposition units 
for training. The transit time, unit assembly time, and training 
planning and preparation time are included within the estimated time 
required to regain proficiency in a unit's mission essential tasks.
    Navy Answer. The primary support to Bosnia has been provided by 
Carrier Battle Groups and Amphibious Ready Groups operating in the 
Mediterranean Sea on scheduled rotational deployments. Navy's 
deployment based training cycle has not been affected by support to 
Bosnian contingency operations.
    Marine Corps Answer. The Marine Corps would not encounter 
significant time or logistical problems like the Army if called upon to 
redeploy personnel from Bosnia in response to a major regional 
conflict. The Marine Corps has vast experience in maintaining CINC's 
forward presence requirements utilizing our time tested unit rotation 
or deployment cycle and the associated schedule. The Marine Corps 
maintains on average approximately 23,000 of our 174,000 personnel 
forward deployed at any given time in support of the theater CINC's. 
Most of these forces are on a rotational deployment cycle. It is 
through this rotational approach to deployments and requirements that 
the Marine Corps is able to ensure that those forces forward deployed 
are the most ready if and when the call comes. Additionally, our 
experience as ``deployers'' has taught our commanders at every level 
how to be innovative and maximize training opportunities and combat 
skill proficiency while deployed. This approach is part of our 
expeditionary mindset and it ensures our Marines are ready to smoothly 
transition between all levels of peacekeeping or conflict. Today, we 
provide support to Operation Joint Guard mission requirements with a 
relatively small footprint of active duty and reserve forces that 
includes:
    The 26th Marine Expeditionary Unit (Special Operations Capable) 
embarked on the USS Wasp Amphibious Ready Group (active duty unit).
    Marine Tactical Electronic Warfare Squadron 4 (VMAQ-4(--) an active 
duty unit with 3 EA-6B aircraft operating from Aviano airbase in 
Italy).
    A 10-man detachment from the 4th Civil Affairs Group--reservists 
operating in Bosnia.
    A 7-man detachment from Marine Unmanned Aerial Vehicle Squadron 2 
(VMU-2)--an active duty unit operating in Bosnia.
    A 22-man detachment from the 2nd Landing Support Battalion--an 
active duty unit operating in Taszar, Hungary and Tuzla, Bosnia.
    Although these units perform a diverse mix of missions, they 
nevertheless could be assembled on short order if necessary to 
facilitate training requirements or respond to a major regional 
conflict. In either case, a major logistical effort would not be 
required and the movement of forces would be limited only by the 
availability of inter/intra theater lift.
    Air Force Answer. The USAF Bosnian presence is composed of 
individuals or small contingents of specialists from many operational 
units. These forces primarily perform the specialized functions of 
airfield operations, airfield security, civil engineering, and 
aeromedical evacuation. The duties they perform while in Bosnia 
reinforce required skills. Upon returning to the US, required training 
is conducted by the individual's permanent unit of assignment, which 
continued to function while the member was deployed. Therefore, the Air 
Force does not need to reconstitute forces for training following this 
deployment, and no major logistics effort or time is required.
    Question. The Committee is aware that the combat skills of flight 
crews deteriorate during deployments to military operations other than 
war such as the North Atlantic Treaty Organization mission in Bosnia. 
How long would the retaining period take to refresh the combat skills 
of flight crews deployed in support of operations such as Bosnia?
    Army Answer. The aviation skills that will be lost, and to what 
degree, will depend on the length of deployment and the purpose 
(mission) of the deployment. The length of time to retrain will also 
vary according to the availability of training resources, ranges, 
ammunition, and flying hours. However, many skills required to perform 
peacekeeping missions are sometimes the same skills required to perform 
combat operations. General support aviation units will perform many of 
their combat tactical tasks in the execution of their peacekeeping or 
contingency missions while, an attack helicopter battalion will not 
perform as many. Accordingly, to ensure that all mission essential 
tasks are trained to standard, the respective commander will 
specifically tailor the training conducted by his unit upon completion 
of a deployment. This training could be expected to include unit 
collective training and crew gunnery qualification.
    Navy Answer. Navy readiness data over the past 5 years indicate 
that our aviators' combat skills remain almost constant throughout 
their deployment. Fleet, Battle Group, and Air Wing Commanders 
constantly work to maximize training opportunities. Although squadron 
readiness data shows a drop as ships transit home and begin to lose 
some of the more fragile training qualifications, all airwings in the 
past 5 years have had higher readiness rates departing theater than 
they did on departure from CONUS.
    Marine Corps Answer. As the committee may be aware, Marine Aviation 
recently transitioned to the ``Core Competency'' model of combat 
training. Under this philosophy of training, units focus their training 
on those aviation skills that they are most likely to perform in all 
combat situations before expending resources on training for the high-
risk low probability of execution skills or contingency specific 
missions. Once this core level of training is first achieved, it is 
usually only a matter of periodically redemonstrating proficiency in 
the particular skill set--usually on a three to six month recurring 
cycle. In many instances, air operations in support of military 
operations other than war provide sufficient opportunity to 
redemonstrate these core skills while at the same time providing 
operational experience with live ordnance, real time intelligence, 
Command & Control, and Joint Combined forces that cannot be duplicated 
in CONUS training without expending significant resources.
    For those few core skills that cannot be maintained because of the 
unique nature of a particular operational deployment site or 
operational taskings, the unit can usually regain proficiency within 
one to three months of dedicated training.
    Air Force Answer. The length of time required to regain pre-
deployment skill levels of Air Force flight crews depends on several 
interrelated factors. Among them are the amount and quality of training 
during the deployment, the length of the deployment, the experience 
level of the flight crews, and the types of missions and aircraft. 
Because of these factors, the retraining time varies widely.

                 Land Forces Readiness Training Funding

    Question. The press release that accompanied the roll out of the 
fiscal year 1999 budget claims that about $1,000,000,000 was added to 
the Operation and Maintenance accounts to preserve readiness. What is 
the Army share of this adjustment?
    Army Answer. The Army added $64,000,000 to its Operation and 
Maintenance, Army, readiness accounts in fiscal year 1999.
    Question. The Committee understands that emergent Department of the 
Army requirements are, in part, responsible for the reallocation of 
Operation and Maintenance funding away from readiness training. Could 
you describe for the Committee those priorities that have been funded 
instead of readiness related training?
    Army Answer. Austere funding in 1998 forced the Army to divert 
resources from readiness training accounts to cover critical needs in 
other programs and pay their assessed share of the Operation and 
Maintenance, Army (OMA), unspecified congressional reductions. The 
major unspecified reductions levied against the readiness accounts 
include: civilian personnel underexecution; National Defense Stockpile 
Fund; OMA excess inventory; revised economic assumptions; and temporary 
duty expenses. The adverse impact of these reductions is much greater 
because readiness funding levels had already been adjusted for reduced 
pricing and travel, as well as personnel and equipment levels.
    When resources are scarce, commanders absorb funding reductions 
within readiness accounts and protect other activities which are 
essential to the overall operational readiness of the Army. This 
includes funding for: training infrastructure and support facilities, 
including operation of training areas and ranges; centrally procured 
clothing and equipment; training ammunition; unit Nuclear Biological 
and Chemical and medical supplies; maintenance and supply support 
facilities; Power Projection Facilities; the incremental cost of 
participation in Joint Chief of Staff exercises, Active and Reserve 
component support; force communications requirements; facilities 
associated with certain combat development activities; and Land Forces 
Depot Maintenance. In addition, other infrastructure and unique 
management activity funds, including Base Operations Support, Real 
Property Maintenance, Army, funding for Unified Commands, and other 
miscellaneous activities, are funded at bare minimum levels and were 
not able to absorb any additional reductions. These supporting 
activities are essential components of the Army's ability to train, 
deploy, and sustain operations and are primary contributors to quality 
of life throughout the Army.
    Shortages in 1998 are causing commanders to make year of execution 
``boots-on-the-ground'' decisions on selected training in order to 
achieve the optimal readiness balance between all the myriad of factors 
impacting readiness. Already, some units are maintaining equipment 
below normal maintenance standards, repair parts stockage levels will 
drop well below authorized levels, and units are eliminating collective 
unit training at task force level and above, except for Combat Training 
Center rotations and task force deployment exercises. Commanders are 
attempting to balance their existing resources by paring down training 
to those events required to sustain bare minimum acceptable training 
readiness. Commanders are forced to make necessary resource trade-offs 
in order to maintain the delicate balance of unit readiness and 
preserve the minimum acceptable quality of life standards for Army 
soldiers and their families.
    Question. Would the Army find it advisable to develop more 
restrictive reprogramming guidance for the Operation and Maintenance 
account to prevent the migration of funds from readiness related 
training to other support functions? If not, why?
    Army Answer. No. More restrictive reprogramming guidance is not the 
way to go. For fiscal year 1998, we already have more restrictive 
guidance than in the past, both in the reduced dollar threshold and in 
the number of budget lines to which it is applied. This has increased 
the workload at all levels of the Army to implement and track these 
thresholds. It has not eliminated the underlying driving forces behind 
migration, which are a tight budget and the need for field commanders 
to flexibly adjust to emergent requirements. Rather than more 
restrictive guidance, we need less. Eliminating the thresholds, or at 
least raising them to $50,000,000, would allow us to manage our funds 
more efficiently during the year with less of a workload than we are 
currently experiencing.

                 National Training Center and Readiness

    Question. How does the Army propose spending the additional 
National Training Center funding provided in the Fiscal Year 1998 
National Defense Appropriations Act?
    Army Answer. The Fiscal Year 1998 National Defense Appropriations 
Act provided an additional $30,000,000 in funding for the National 
Training Center (NTC). The Army proposes to spend this funding on 
approximately 170 miles for each of 17 the Active component heavy 
battalions using the NTC prepositioned fleet while participating in NTC 
rotations in fiscal year 1998.
    Question. The Committee understands that the Army's 1999 budget 
request again proposes that units absorb the cost of National Training 
Center (NTC) rotations from home station training rather that 
separately funding such rotations. Why?
    Army Answer. The Army has updated the Combined Arms Training 
Strategies that are used to determine training and resource 
requirements. A major change in these strategies included making the 
NTC rotation a part of the unit's overall Home Station Training (HST) 
program. The Army changed the way it resources the prepositioned fleet 
at the NTC to reflect current training doctrine, to ensure all units 
are resourced equally, and to align the programming of its scarce 
Operations and Maintenance, Army, dollars with the way they are 
actually executed. Units in Germany who participate in NTC-like 
training exercises at the Combat Maneuver Training Center (CMTC) are 
resourced such that their CMTC rotations are included in their Home 
Station Training funding. Until fiscal year 1998, Forces Command 
(FORSCOM) units that rotated to the NTC and used the prepositioned 
fleet received additional resources for this training. This caused the 
Army to resource FORSCOM units at a higher level than the rest of the 
Army, to include units stationed in Korea. A review of the vehicle 
execution reports show that FORSCOM units are training at approximately 
the 800 mile level if the rotations to the NTC are included. 
Consequently, the Army changed its resourcing strategy to make the best 
use of scarce resources and to more closely reflect the way resources 
were being used by commanders in the field. There is no reduction on 
the overall resourcing of training and the change will not have an 
adverse impact on readiness.

   Funding for Joint Readiness Training Center and European Training 
                               Rotations

    Question. The Committee understands that rotations to Hoenfels and 
the Joint Readiness Training Center (JRTC) are absorbed within home 
station training funds. Why?
    Army Answer. Since the inception of the Combat Maneuver Training 
Center (CMTC) at Hoenfels and the Joint Readiness Training Center at 
Fort Polk, units have paid for the cost of these rotations with home 
station training funds provided in the annual training accounts because 
rotations are considered part of their normal training strategy. This 
allowed heavy units driving at the Combat Maneuver Training Center and 
the Joint Readiness Training Center to report mileage driven as part of 
their training strategy execution. This includes the cost of spare 
parts and fuel for CMTC rotations of units in Germany who participate 
in training exercises at the CMTC. In addition, neither the CMTC at 
Hoenfels nor the Joint Readiness Training Center at Fort Polk maintain 
an armored vehicle prepositioned fleet. Heavy forces within Europe use 
rail transportation to move their vehicles to Hoenfels, as do Forces 
Command heavy units participating at the JRTC. The cost of this rail 
transportation also is included in their home station training funds.

                 National Training Center and Readiness

    Question. Recent press indicates that there has been a decline in 
the quality of the units participating in National Training Center 
(NTC) rotations. Does this decline in quality make an argument for 
increasing the resources provided for both home station training and 
training rotations?
    Army Answer. One must remember that there is no comparison of units 
at the NTC or any of the Combat Training Centers (CTCs). The CTC 
experience is a learning environment. Commanders, soldiers, and units 
use the CTC experience so that they can identify weaknesses in battle 
operating systems and correct them. Having said that, I am not sure 
that there is, in fact, a decline in the quality of these units. While 
I think that the entry level experience and training may be lower as 
they do to the NTC, I think that their exit level is as high as it has 
been in the past. Operations and Maintenance funding is extremely tight 
as we have tried to shift some funds into modernization. So, basically, 
at home station, we are not doing as many large scale field training 
exercises now. Clearly, more dollars would help to alleviate this, as 
well as give more flexibility for installation commanders to balance 
the base operations and operating tempo portions of their budget.
    Question. In conjunction with the reported decline in the readiness 
of units going to the National Training Center (NTC), it has been noted 
that units are doing less combined arms training at their home stations 
during the work-up to the NTC. General Reimer, could you comment on 
this observation?
    Army Answer. Readiness is not evaluated at the Combat Training 
Centers (CTCs). Readiness is assessed by unit commanders. CTC rotations 
are designed to immerse units in extraordinary training conditions. 
There is no comparison of units; the CTC experience is a learning 
environment. Commanders, soldiers, and units use the CTC experience so 
that they can identify weaknesses in battle operating systems and 
correct them. We are doing less larger scale field training exercises 
than we have in the past, but all units arriving for training at the 
NTC meet the Forces Command minimum training standards. Units arrive at 
the CTCs at various states of training proficiency based on the 
training strategy and guidance of the commanding general. Equipment 
readiness, level of personnel fill, and other factors affect a unit's 
state of training. Some units arrive after a deliberate train-up 
program at home station; others arrive in a ``come as your are'' mode.

                    Cross-Decking and Navy Readiness

    Question. How prevalent is the practice of cross-decking personnel?
    Navy Answer. The term ``cross-decking'' is often used to describe 
three different personnel management actions used by Manning Control 
Authorities (MCAs) (i.e. CINCPACFLT and CINCLANTFLT) to support 
deployment requirements.
    Diverts: the first option. BUPERS modifies a Sailor's ultimate duty 
station to another unit in same geographic location.
    Cross-decks: the second option. Permanent Change of Station (PCS) 
transfer from one deployable unit to another (same geographic 
location); preferably from unit with excess. Sailor must have at least 
one year remaining on sea duty. Occurrences examined closely to ensure 
minimal impact to quality of life.
    TAD Assists: the third option. Temporary fill to provide relief for 
mid-deployment arrival or unanticipated loss (e.g. medical emergency). 
Occurrences examined closely to ensure minimal impact to quality of 
life.
    When necessary, these actions are most often used to fill personnel 
shortages among critical and highly technical ratings. Usage is kept to 
a minimum and monitored monthly by BUPERS. On average, the total number 
of personnel who are either diverted, cross-decked or sent TAD averages 
approximately 2% of the total number of Sailor's transferring.
    The 1997 House National Security Committee Report on Military 
Readiness indicates that there is an in incidence of cross-decking of 
personnel and equipment within the Navy. The House Appropriations 
Committee Surveys and Investigations Staff has also observed this 
phenomenon. Among the Navy's personnel specialties, the most prevalent 
of cross-decking involve fire control and electronics technicians. 
There has also been an increase in the prevalence of cross-decking 
among unrated personnel.
    Marine Corps Answer. Cross-decking is not prevalent in the Marine 
Corps. All cross-decking is done on a voluntary basis; approximately 60 
Marines volunteered to cross-deck in 1997.
    Question. How prevalent is the practice of cross-decking aircraft 
and other equipment?
    Navy Answer. Cross-decking aircraft and equipment while deployed is 
uncommon. During the Inter-Deployment Training cycle (IDTC), non-
deployed aircraft undergo various repairs to ensure material condition 
is maintained at acceptable levels. Since repair times vary, Squadrons 
frequently receive the first available aircraft (which may or may not 
be the aircraft they flew on their last deployment) to support the 
necessary training during the IDTC.
    Marine Corps Answer. Cross-decking of aircraft and equipment from 
ship-to-ship is not normally done in the Marine Corps unless it is to 
provide replacement assets for unexpected attrition. However, the 
cross-decking of aircraft and equipment is a routine practice for 
Marine squadrons involved in the Unit Deployment Program (UDP). Most 
USMC aircraft require some form of Standard Depot Level Maintenance 
(SDLM) that is normally tied to the material condition of the aircraft 
or a fixed operating period.
    When aircraft are deployed as part of the UDP, they are carefully 
screened to ensure they will not require SDLM during the period of 
deployment. In order to save money involved in moving aircraft and 
equipment overseas every six months, the goal is to send aircraft on 
UDP that will be able to spend a full year at the deployment site 
before requiring SDLM. To further reduce transportation costs, aviation 
support equipment (SE) allowances have been put in place at the UDP 
sites to be used by squadrons during the period of their deployment. 
Consequently, this equipment is cross-decked, by design, every six 
months.
    Question. Are there any established goals set for cross-decking 
equipment or personnel?
    Navy Answer. There are no established goals set for cross-decking 
equipment or personnel. Although the Fleet Commander's intentions, with 
regard to personnel, are to minimize the amount of cross-decking that 
occurs, cross-decking equipment is a viable solution to an emergent 
requirement.
    Marine Corps Answer. The Marine Corps does not have ``goals'' for 
cross-decking. A minimum of cross-decking is desired, though we 
authorize cross-decking for individuals who desire it to more favorably 
align their deployment schedule with personal circumstances.
    Question. Is cross-decking on the increase?
    Navy Answer. There is no evidence that cross-decking has become 
more prevalent today than in the past.
    Marine Corps Answer. Cross-decking is not increasing in the Marine 
Corps. While approximately 60 Marines were authorized to cross-deck in 
1997, we anticipate that the number of Marine Corps who cross-deck will 
decrease as a result of our Unit Cohesion Program which aims to keep 
small units of Marines together for their entire first enlistment. It 
should also be noted that all Marines cross decked were volunteers.
    The unit cohesion program is an initiative we have implemented in 
the infantry MOS and plan to execute in all applicable specialties by 
FY99. We will form teams of Marines starting at the specialty schools 
and keep them together throughout their first tour. We plan to place 
these Marines into a unit at an appropriate time in the deployment 
cycle that will allow them to deploy twice within their first 
enlistment in the same unit. This combination of appropriate timing the 
keeping these Marines together will allow us to better manage our 
first-term force and consequently reduce cross-decking.
    Question. What effect does cross-decking have on readiness?
    Navy Answer. Cross-decking is conducted to enhance the readiness of 
deploying units. Although the non-deployed unit providing the asset 
will experience a shortage, the impact to that unit's readiness may be 
minimal. Because of our cyclical readiness posture, we expect non-
deployed readiness to drop soon after units return from deployment. 
This is a direct result of units entering the Inter-Deployment Training 
Cycle (IDTC) where ships and aircraft undergo various levels of 
maintenance. During the IDTC, proficiencies migrate to a basic level 
due to crew turnover and the reduced opportunity to train while 
conducting maintenance. Cross-decking within the IDTC can be 
accomplished without adversely affecting a units's ability to achieve 
combat ready status prior to their next deployment.
    Marine Corps Answer. All Marines that cross-deck from one 
organization to another volunteer to do so for personal reasons. Given 
the extremely small number of Marines who cross-deck, it has negligible 
impact on readiness.

                           Aviation Readiness

    Question. What are the trends in the mission capable rates for each 
Service?
    Army Answer. Our aviation mission capable rates have remained 
consistently above goals with the exception of the CH-47D. Overall, we 
attribute this success to better aircraft reliability, increased 
soldier level experience with the modern systems, and a more efficient 
supply system through automation and velocity management. Additionally, 
our aviation units are one of the hardest working elements in the Army 
today. Regarding the CH-47D, the high non-mission capable maintenance 
rate is the result of corrosion and metal fatigue and is consistent 
with a system having an average airframe age of 29 years. The Army's 
Improved Cargo Helicopter program will reverse the CH-47 readiness 
trend.
    Navy Answer. The overall trend for mission capable Naval aircraft 
has remained relatively flat over the past eight years. For the period 
FY90-97, the Department's overall MC rate has fluctuated between 68%-
72%. In FY98, the average for the 1st quarter was 68%.
    Marine Corps Answer. Marine Corps' average mission capability (MC) 
rate between FY90 and FY97 is 74.4%.

--------------------------------------------------------------------------------------------------------------------------------------------------------
                           FY                                FY 90       FY 91       FY 92       FY 93       FY 94       FY 95       FY 96       FY 97
--------------------------------------------------------------------------------------------------------------------------------------------------------
MC Rate.................................................        69.3        69.0        71.3        76.6        79.4        78.7        76.2        75.0
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Since fiscal year 1994, MC rates have declined from 79.5% to a low 
of 75.3% in fiscal year 1997. The MC rate for the first five months of 
fiscal year 1998 is 72%.
    Air Force Answer. USAF Mission Capability (MC) rates have declined 
8.8% since Fiscal Year (FY) 1991 from 83.4% to 74.6% in the first 
quarter of FY98. Total Not Mission Capable Supply (TNMCS) and the Not 
Mission Capable Maintenance (NMCM) rates drove the MC rate decline. The 
overall TNMCS rate has increased 5.8% between FY91 (8.6%) and the first 
quarter of FY98 (14;4%) as a result of increased parts shortages. The 
overall NMCM increased 3.3% between FY92 (8%) and the first quarter of 
FY98 (11.3%) primarily due to aging aircraft and engine problems.
    Question. What is the current composite mission capable rate for 
the Army helicopter fleet?
    Army Answer. During the last twelve months, our mission capable 
rates within the Warfighting Active Army averaged: AH-64A, 78.9 percent 
(70 percent goal); OH-58D, 81.3 percent (70 percent goal); CH-47D, 70.5 
percent (70 percent goal); and UH-60A/L, 76.5 percent (75 percent 
goal).
    Question. What is the current composite mission capable rate for 
deployed Naval aircraft?
    Navy Answer. The most current AV3M data (December 97) indicates the 
mission capable rate for deployed Naval aircraft is 78.4%.
    Marine Corps Answer. The Marine Corps does not differentiate 
between deployed and non-deployed aircraft when reporting mission 
capable (MC) or fully mission capable (FMC) rates. The composite MC 
rate for the Marine Corps for FY 97 is 75.3%; for FY 98 to-date the MC 
rate is 72.0%.
    Question. The Committee understands that the mission capable rates 
can be manipulated. You are able to fly a plane for a brief period once 
a month and report that aircraft as mission capable even though that 
aircraft may in fact serve as a ``hangar queen.'' Could each of you 
comment on the prevalence of this practice?
    Army Answer. Manipulation of mission capable rates is both 
difficult to do and easy to detect within the Army's automated 
readiness-reporting systems currently in use. The term ``hangar 
queen,'' other than slang for an aircraft with extensive down time, is 
meaningless to the Army from a maintenance management perspective. An 
aircraft's readiness rate is the average of the hours it was available 
with the total hours of the month in question. Any aircraft that was up 
for a short number of hours, regardless of when the period occurred, 
would reflect a poor monthly readiness rate against the goal for that 
particular aircraft.
    Navy Answer. Aircraft mission capable rates are not manipulated. 
There are two different reporting systems that monitor the material 
condition of our aircraft. The first is the aircraft Material Readiness 
Report (AMRR) which is used by Battle Group Commanders to inform others 
of the present condition of their embarked Air Wing. The aircraft 
mission capable (MC) rates included in this report are a daily snapshot 
and are subject to change if an unexpected failure occurs following the 
submission of the report. Since the possibility exists that AMRR data 
may not always reflect the material condition of an aircraft as 
measured by a twenty-four hour clock, it is not used when performing 
operational analysis. Instead, the Navy uses MC data accumulated from 
its Aviation Maintenance, Material, Management (AV3M) data system. MC 
rates within the AV3M system are calculated based on a twenty-four hour 
clock and generally when comparing monthly averages between the two 
systems, AV3M rates are several percentage points lower than that of 
AMRR rates. Additionally, since the time it takes to accumulate AV3M 
data and ensure its completeness is approximately 90 days, AV3M data is 
not useful to a Battle Group Commander when monitoring the ``present'' 
condition of an embarked Airwing (AMRR data is better suited). However, 
AV3M data does provide a more accurate readiness picture for use in 
resourcing aircraft material condition.
    Marine Corps Answer. The practice of having a ``Hangar Queen'' is 
common throughout each aircraft community to consolidate Not Mission 
Capable Supply (NMCS) requisitions with long lead times. However, 
because ``Hangar Queens'' have NMCS requisitions against them, they are 
reported as not mission capable (NMC), and not as mission capable (MC). 
Each Marine Aircraft Wing (MAW) has a Special Interest Aircraft 
(SPINTAC) management program designed to maintain visibility of 
aircraft that have been in a NMCS condition for thirty days or more. 
Once an aircraft is identified as being SPINTAC, special procedures are 
instituted that are designed to prevent further degradation of material 
condition and return such aircraft to an MC status as expeditiously as 
possible. It should be noted, however, that MC rates are based on a 7 
days a week, 24 hours a day clock, so stating that a MC rate is 70% 
means that aircraft were flyable 70% of the time. A one time flight for 
a ``hangar queen'' will only minimally affect the overall MC rate.
    Air Force Answer. Our system prevents this type of situation, 
because we regard MC rates against the total possessed hours for each 
aircraft. Each aircraft accrues time as Mission Capable, Not Mission 
Capable for Maintenance, or Total Not Mission Capable for Supply 
status. An airplane would be recorded as MC only as long as it is 
capable for flying and performing its primary mission.

                            Cannibalization

    Question. Gentleman, what is the rate of cannibalization in your 
respective Services?
    Army Answer. We do not believe the Army has a cannibalization 
problem. Army reviewed recorded data from the Work Order Logistics File 
(WOLF) from 1995 until March 1, 1998, for instances for parts being 
obtained from cannibalization points. These cannibalization points are 
our official method of controlling the exchange of items from a pool of 
equipment that is either excess to the needs of the Army, damaged and 
declared an item that may be stripped prior to being salvaged, or is a 
group of equipment that has specifically been placed in a 
cannibalization point to support an obsolete system. Our WOLF data 
shows 2,313,029 total work orders recorded in WOLF and 8,474 
requirements that were filled from cannibalization as a source of 
supply. This is .4 percent attributable to cannibalization. Army 
additionally uses ``controlled exchange'' procedures that allow 
commanders to make judgments to maximize readiness through the 
substitution of parts from long term-deadlined equipment for near term 
repair. Any use of controlled exchange has to be backed by valid 
requisitions and detailed on the monthly readiness reports. Our 
Aviation community uses this type of exchange the most within Army. Use 
of it is essential to maintaining readiness for Army aircraft.
    Navy Answer. The most current AV3M data (December 97) indicates the 
cannibalization rate for Naval aircraft is 9.9 cannibalization/100 
Flight Hours.
    Marine Corps Answer. The cannibalization rate for the Marine Corps 
for FY 97 was 10 cannibalizations per 100 flight hours. The FY 98 
cannibalization rate to-date is 7.1 cannibalizations per 100 flight 
hours.
    Air Force Answer. The current, first quarter Fiscal Year (FY) 1998, 
overall Air Force cannibalization rate is 3.5 cannibalizations per 100 
flying hours, down from 4.2 in fiscal year 97. The cannibalization rate 
decreased from 3.6 cannibalizations per 100 flying hours in fiscal year 
91 to 2.1 in fiscal year 95. The cannibalization rate then increased to 
4.2 cannibalizations per 100 flying hours in fiscal year 97.
    Question. What are the cannibalization goals for each of your 
services?
    Army Answer. The Army does not have an established goal for 
cannibalization. As stated previously, there are unique needs for 
cannibalization, but our preference and policies are that the use of 
this method is to be controlled through established cannibalization 
points. However, we do make use of ``controlled exchange,'' which is 
the removal of serviceable components from unserviceable economically 
reparable end items for immediate reuse in restoring a like piece of 
equipment to fully mission capable status. We do have very strict rules 
on controlled exchanges, and we allow the commander the leeway to make 
the decision as he or she is closest to the tactical situation. We do 
not condone the wholesale use of using pieces of equipment as sources 
for supply.
    Navy Answer. There are no established cannibalization goals set for 
the Navy. Although the Fleet Commander's intentions are to minimize the 
amount that occurs, cannibalizations are a viable solution to an 
emergent requirement.
    Marine Corps Answer. The Marine Corps does not establish a specific 
quantifiable cannibalization goal. We just try to be sure that it is 
used wisely and that each such action is reviewed by upper management/
leadership.
    Air Force Answer. While the Air Force has no goal for 
cannibalization actions, cannibalization trends are tracked at an Air 
Force level, along with the Total Not Mission Capable rate, to indicate 
the level of effort required to work around spare parts shortages. 
Decisions concerning the feasibility and need to cannibalize spare 
parts are made at the squadron level and are validated by the unit 
maintenance production superintendent. Although units have no 
cannibalization rate goals, they do manage cannibalization actions 
against aircraft Mission Capable (MC) rate goals. Production 
superintendents base cannibalization action decisions on feasibility, 
difficulty, and need. Cannibalizations meet the need to provide a spare 
part to meet an aircraft MC rate production goal or an operational 
requirement, such as filling a deploying Readiness Spares Package 
shortfall or making a specific aircraft ready for a scheduled mission.
    Question. What trends do you observe in cannibalization? Is the 
situation getting worse, better, or about the same.
    Army Answer. We do not believe the Army has a cannibalization 
problem. Three-year data shows a steady state of usage of cannibalized 
parts. Of 611,819 high priority job orders, usually attributable to 
readiness, 6.421 were filled through cannibalization. However, there 
has been an increased use of controlled exchange in aviation units, 
primarily due to declining availability rates caused by reduced 
funding.
    Navy Answer. A review of cannibalization data from 1980 through 
December 1997 indicates cannibalizations are declining overall per 100 
flight hours. However, in FY97 the cannibalizations rate increased 8.3% 
(from 8.4 Canns/100 FH in FY96 to 9.1 Canns/100 FH in FY97). This 
slight increase was attributed to the Navy's underpricing of the Flying 
Hour Program. Although the most recent data, 1st quarter FY98, 
indicates the rate (9.4 Canns/100 FH) is slightly higher than the FY97 
figure, we are optimistic that the 1998 fiscal year cannibalization 
rate will be lower than that of FY97 and will continue downward.
    Marine Corps Answer. In spite of periodic fluctuations, Marine 
Corps cannibalization trends have been about the same since FY90. The 
average rate of cannibalization per 100 flight hours since FY90 is 7.0. 
In FY97 the cannibalization went up to 10, but for FY98 to-date the 
rate is back down to 7.1 per 100 flight hours.
    Air Force Answer. Cannibalization rates decreased from 3.6 
cannibalizations per 100 flying hours in FY91 to 2.1 in FY95. The 
cannibalization rate increased to a peak rate of 4.2 in FY97. The first 
quarter of FY98 cannibalization rate was 3.5 cannibalizations per 100 
flying hours.
    Question. Is the apparent increase in cannibalizations attributable 
to supply problems? Maintenance problem? Lack of funding? Other causes? 
Please explain.
    Navy Answer. Cannibalization actions are attributed to many things 
including immediate operational/mission requirements, supply response 
time, supply material availability, Depot and/or Intermediate Level 
repair capability and/or parts shortage/backlog. However, the recent 
increase in cannibalizations has been attributed primarily to the FY97 
Flying Hour Program shortfall.
    The FY98 Congressional plus-up, in addition to the funds we have 
added to our readiness accounts for FY99-03, will provide our 
maintainers necessary funds to order parts and reduce the rate of 
cannibalizations.
    Marine Corps Answer. The major reason behind cannibalization in the 
Marine Corps continues to be lack of readily available spare parts. 
Each Marine Aircraft Group (MAG) has a supply allowance for each Type/
Model/Series aircraft assigned based upon projected flight hours, 
average demand, and system availability, but high usage repairable 
items are often tied up undergoing repair in the Intermediate 
Maintenance Activity (IMA) and are not readily available for issue. 
Other factors contributing to cannibalization are the failure to fund 
depot repair schedules to match fleet usage rates, and a lack of 
aviation depot level repairable (AVDLR) money which would allow a MAG 
to turn-in a repairable part to the supply system and draw a 
replacement item.
    Air Force Answer. Increased cannibalization rates reflect a higher 
level of effort to work around spare parts shortages. Spare parts 
shortages are primarily driven by: (1) aging aircraft problems, such as 
longer than expected flight control surface repair times because of 
corrosion and out of production parts, (2) excessive component repair 
part lead times that caused two out of the top ten C-130 mission 
capable spare parts shortages, (3) technical surprises, such as high 
performance engine reliability problems, (4) contractor delinquencies, 
such as a subcontractor that pulled out of a contract for F-16 Heads Up 
Display Unit parts, and (5) organic repair constraints, such as 
manpower and test equipment shortfalls. The 82% spare parts funding 
level in FY97 compounded spare parts problems especially in the fourth 
quarter of the fiscal year. We expected improved FY98 and FY99 spare 
parts funding, total engine life management planning, and streamlined 
supply chain management to stabilize and begin recovering spare parts 
shortages.

                         Spare and Repair Parts

    Question. Congress added $622 million above the budget request in 
the fiscal year 1998 Appropriations bill for aviation spares. What 
effect has this funding had on the readiness of Navy Aviation units?
    Navy Answer. The FY98 Congressional plus-up, in addition to the 
funds we have added to our readiness accounts for FY99-03, will 
facilitate the procurement of additional resources to enhance 
readiness. Specifically, it will allow our maintainers to order the 
necessary parts and perform the essential repairs needed to improve the 
material condition of our ships and aircraft. We have already observed 
improvement in aircraft Mission Capable (MC) and Full Mission Capable 
(FMC) rates. We are optimistic these trends will continue and similar 
positive trends will soon follow in other readiness indicators.
    Marine Corps Answer. The Navy portion of the $622 million addition, 
$322 million, went to support additional purchases of aviation depot 
level repairables with enhanced reliability and to adequately fund 
Marine Aviation Campaign Plan flying hours.
    Air Force Answer. The Air Force received $300 million from the FY98 
Appropriations bill for aviation spares. This funding provided 
additional spares needed to execute the flying hour program and help 
stabilize our Total Not Mission Capable for Supply rates. This 
additional funding, together with implementation of our Engine Life 
Management Planning initiatives and streamlined supply chain 
management, should help to stop the current erosion of our mission 
capable rates.
    Question. What were the causes of the sudden occurrence of a lack 
of spares? Was it a problem in the supply system? Depot maintenance? 
Or, was it purely a financial issue?
    Army Answer. The Army has not experienced a sudden occurrence of a 
lack of spares.
    Navy Answer. The primary cause for insufficient spares in FY97 was 
directly related to the underpricing of the Flying Hour Program. By 
underestimating the growing cost and demand of aviation depot 
repairables (AVDLRS), our Sailors were not provided sufficient OMN to 
order the necessary parts required to conduct all their maintenance. As 
a result aircraft mission capable and full mission capable rates were 
impacted.
    The FY98 Congressional plus-up, in addition to the funds we have 
added to our readiness accounts for FY99-03, will provided our 
maintainers the necessary funds to order parts and help improve the 
material condition of our aircraft.
    Marine Corps Answer. The perception of a sudden occurrence of a 
lack of spares is limited to specific weapon systems, and even in these 
cases, the condition is more a perception than a reality. In most 
instances, the spares are in the system, but are not in a Ready For 
Issue (RFI) condition. In these instances where a lack of funding 
exists, shortfalls in funding generate backlogs in parts awaiting 
repair at the various depots, and results in spares allowance 
deficiencies at the operating sites.
    In addition, spare allowance assets undergoing repair at the 
Intermediate Maintenance Activity (IMA) may be held awaiting bit and 
piece parts for long periods of time. Items may also be held awaiting 
maintenance at the IMA due to broken test equipment or lack of trained 
personnel. In such cases, these parts are still in the system, but are 
not available to issue to the using units.
    Air Force Answer. Spare parts shortages are the result of a 
combination of factors, to include aging weapons systems and in 
particular high performance engines, high operations tempo, technical 
surprises, contractor delinquencies and prior year underfunding. In 
short, the Air Force fleet is getting older and is being utilized more 
which is putting greater demands on the supply system. Compounding 
these problems are production limitations and the underfunding for 
spare parts in previous years. In FY 97, spare parts funding was only 
82 percent of the requirement. To combat the effects of these strains 
the Air Force has implemented a comprehensive Engine Life Management 
Planning program to ensure the best maintainability and supportability 
practices are used to better control life cycle costs of the engine 
fleet. The Air Force has also attempted to streamline supply chain 
management to improve production capabilities and increased funding. 
Funding for spare parts was increased in FY 98 and FY99 to 96 percent 
and 100 percent, respectively, of requirements. While our aging fleet 
and high OPTEMPO will continue to pose tough challenges, we are 
committed to overcoming these challenges and getting the parts on the 
shelf so our Major Command customers can execute their flying hour 
programs.
    Question. Gentlemen, the Committee has learned that there has been 
considerable growth in the cost of spares over the past years. What 
effect has such cost growth had on OPTEMPO and readiness related 
training?
    Navy Answer. Although underestimating the cost of spares 
contributed to the FY97 Flying Hour Program shortfall, it did not 
impact our ability to deploy combat ready forces. This is primarily due 
to the actions take by the Fleets to temporarily mitigate the lack of 
funds. Actions such as deferring maintenance and temporarily limiting 
the stock replenishment of parts enabled the Fleets to sustain the 
requisite OPTEMPO and training among those units about to deploy, until 
sufficient funds were received in FY98. The plus-up received from 
Congress in addition to the funds we have added to our readiness 
accounts for FY99-03, will provide our maintainers the necessary funds 
to order parts and perform the maintenance required to help improve the 
material condition of our aircraft.
    Marine Corps Answer. Cost growth of spares has somewhat impacted 
readiness related training and OPTEMPO of the Marine Corps, as 
Operations and Maintenance (O&M) accounts fund both spares and 
training. In terms of OPTEMPO, O&M funding shortfalls may curtail 
training, and thus impact readiness. Marines are as good and as 
effective as the training they receive. We have energetic and 
innovative commanders who are skilled at squeezing full value from each 
dollar spent on unit and field training. However, those training 
dollars are declining. Over the past three years, while our O&M funding 
has remained relatively constant, the cost of equipment readiness has 
risen steadily. As equipment ages, the replacement of parts and major 
assemblies also rises. This is evidenced by the average cost of an 
Equipment Repair Order in FY95 being $93 and the same average cost in 
FY97 was $156.
    Our budgets remain tight. O&M funds are the bill-payers for 
maintenance. We spend approximately $370 million per year on our 
Operating Forces. Of this, maintenance consumes approximately $130 
million, various ``force-wide'' programs, such as initial issue, unit 
deployment, and equipment replenishment consume another $130 million. 
This leaves approximately $110 million for training the Operating 
Forces. It is from this ``residual'' amount that units train. It is 
from within this ``residual'' amount that increasing maintenance costs 
are absorbed at the organizational and intermediate levels, reducing 
funds available for training.
    Air Force Answer. Due to a number of reasons, primarily the 
continuing growth in scheduled and unscheduled engine removals, 
increased sub-system failures, Time Change Technical Order weapon 
system enhancements, and parts coming out of warranty, the cost of 
spares has indeed grown over the past several years. Furthermore, due 
to a combination of factors, including aging weapon systems, increased 
failures, poor forecasting and underfunding of the Air Force's 
wholesale spares supply system during FY 97, it has become more 
difficult to provide spare parts in a timely manner.
    Nonavailability of spares at the unit level has been a primary 
reason for the decline in Air Force mission capability rates from a 
peak of 83.4 percent in FY 91 to the current rate of 74.6 percent. As 
spares availability decreases, we see a resultant increase in 
cannibalizations (CANNs). Clearly, not all CANN actions are bad: the 
15-minute CANN that enables an aircrew to make a sortie is a good 
business decision--one the Air Force has been making for years. 
Unfortunately, due to the increasing age and complexity of our weapon 
systems, many of today's CANNs are neither quick nor easy, resulting in 
longer hours and, sometimes, additional breakage.
    This increased workload not only increases our airmen's level of 
professional frustration, but also it reduces training opportunities. 
Based on increased FY 98/99 spares funding and other initiatives we 
have undertaken, we expect the situation to improve in FY 98; however, 
aging aircraft will continue to pose tough challenges to our logistics 
support systems.
    Question. What measures is DoD taking to curtail growth in the cost 
of spares?
    Navy Answer. Navy has moved from historical demand based sparing to 
a readiness methodology which takes into consideration the mission 
criticality, redundancy and cost of an item when making sparing 
decisions. We have partnered with industry in sharing risks and 
avoiding warehousing, storage and transportation costs. The Navy has 
also developed incentive programs to increase the reliability of our 
spares thereby reducing the number of items we need to procure. We have 
eliminated the intermediate level of material while reducing consumer 
and wholesale inventory levels.
    In addition to the initiatives cited above, we have taken the 
following specific actions:
    Reduced the surcharge by identifying and minimizing infrastructure 
costs;
    Introduced commercial and non-developmental items into our weapon 
systems inventory;
    Implemented an information system to achieve total visibility of 
all assets;
    Continued our price-fighting efforts by performing cost analyses.
    The cost of spares is the result of various factors: the decision 
on the level of maintenance, the engineered and the achieved 
reliability of the component, the criticality of the part to safety and 
survivability of the crew, and the cost of material to repair or 
repurchase new parts.
    The Navy is committed to reducing the cost of spares by ensuring 
the component achieves the desired reliability: by reengineering the 
part to achieve the necessary reliability when the component is not 
performing as intended, by investigating methods of reducing the total 
cost of operating systems, and by exploring new approaches to 
supporting systems.
    Marine Corps Answer. Marine Corps aviation spares are purchased by 
the Navy and initiatives to curtail the growth in the cost of spares 
are primarily managed by them.
    Although the Navy has the lead, the Marine Corps participates in 
efforts to control costs through aggressive pursuit of initiatives such 
as: Premium transportation; direct vendor delivery; multi year 
contracts for spares.
    Air Force Answer. To manage cost effectively, two areas must be 
addressed--cost estimation and the factors that drive cost. An accurate 
baseline or estimate of cost is essential to measure cost increases so 
appropriate management controls can be applied without impacting the 
Air Force's flying hour program.
    In terms of Air Force spares costs, the root of the problems in 
Fiscal Year (FY) 1997-99 is that the Air Force underestimated the cost 
of spares. Although costs were underestimated, we have since worked to 
estimate spares costs more accurately by reviewing the estimating 
process, fixing immediate disconnects and implementing a revised 
process and new procedures. With better baselines, we are better able 
to assess factors driving cost more accurately. The combination of 
factors driving growth includes increased consumption, particularly in 
the engine area, and other causes related to aging weapon systems, 
technical surprises, Time Change Technical Order enhancements, and 
contractor delinquencies, as well as high OPTEMPO. To combat increasing 
costs, the Air Force has implemented a comprehensive Engine Life 
Management Planning program (ELMP) to ensure the best maintainability 
and supportibility practices are used to control life cycle costs of 
the engine fleet. In addition, initiatives are also underway to manage 
costs through improved supply chain management. While high OPTEMPO will 
continue to pose tough challenges for the Air Force, the ELMP and 
supply chain management initiatives are key programs which will 
effectively manage future costs.
    Question. In the Air Force, the two level maintenance concept has 
constrained availability of some types of spares, and given rise to 
establishment of ``Queen Bee'' sites to perform maintenance and meet 
demand for spares that the depots are unable to meet. What is the 
status of two versus three-level maintenance in the Air Force?
    Air Force Answer. In an attempt to help reduce mobility footprints, 
reduce manpower and equipment costs, and protect the support force from 
harm in a conflict, two-level maintenance (2LM) is being applied to new 
and upcoming weapons systems and, when practical, to existing weapons 
systems. In some instances, aircraft engines that were placed under the 
2LM concept have been reevaluated and placed back under a three-level 
maintenance (3LM) mode of operation. However, in most other instances, 
2LM has worked well and continues to be utilized. In either case, there 
is no evidence that suggests 2LM has constrained the availability of 
some types of spares. ``Queen Bee'' regional repair facilities have 
been established to focus intermediate level maintenance at a regional 
location, and, in most cases, operate under the tenets of 2LM. Their 
establishment afforded manpower savings and used the benefits of rapid 
transportation to improve the maintenance process. In the future, 2LM 
will continue to be applied in instances where a clear benefit can be 
demonstrated.

                         Commissary Operations

    Question. Gentlemen, the Committee has heard numerous witnesses 
testify that the commissary benefit is one of the preeminent quality of 
life factors for military personnel. Please explain to the Committee 
how the revised management and funding of commissary operations 
preserves, or improves this benefit?
    Army Answer. On October 1, 1998, commissary store-related 
appropriated fund resources will be transferred from the Defense 
Commissary Agency to the services to align resource responsibility with 
the organizations that control demands on the commissary system. These 
actions will maintain the commissary benefit by providing a financial 
and management structure better able to support resource tradeoffs, 
capital development decisions, and long range planning responsive to 
military personnel and their families. This will be accomplished 
through a strong operating board with service representation and 
authority to issue directives. This will enhance individual service 
involvement with commissary operations.
    Navy Answer. I do not expect these changes will significantly 
change the delivery of the commissary benefit. The revised management 
and funding of the Commissary should be transparent to commissary 
customers.
    Marine Corps Answer. These actions will preserve the commissary 
benefit at its current level by providing a financial and management 
structure better able to support resource tradeoffs, capital 
development decisions and long range planning responsive to military 
personnel and their families.
    Air Force Answer. Under the proposal advanced by the Services, a 
directive board composed of military service representatives will 
govern commissary operations. With the Services providing operational 
and budgetary control, the commissaries will be more responsive to the 
military services, and less vulnerable to budgetary cuts.
    Question. How do you anticipate that the management of the 
commissaries will change under the new structure?
    Army Answer. Under the new management structure, the services agree 
that the day-to-day operation of the commissaries will be administered 
under the direction of the Commissary Board of Directors. The board 
will exercise full authority over commissary operations, be accountable 
to the service Secretaries and Chiefs, and be supported by committees 
for technical expertise in such areas as customer service standards, 
finance, and audit. Also, the Commissary Director will report to the 
Chairman of the Board of Directors and, through the board, will be 
accountable to the service Secretaries and the Chiefs.
    Navy Answer. Within DECA, particularly at the store level, I do not 
believe we will see any significant changes in management. However, 
outside of DECA, the new operating board will give the Services greater 
involvement in decisions impacting management of commissary operations.
    Air Force Answer. One of the main objectives of the Secretary of 
Defense's Defense Reform Initiative was to allow the Office of the 
Secretary of Defense (OSD) to concentrate on broad policy in part by 
relieving it from day-to-day management responsibilities. Consistent 
with that principle, the commissary proposal would leave broad policy 
oversight with OSD, but transfer operational control and supervision of 
day-to-day operations to the Services. Thus, the Services would enjoy a 
far greater role in management and oversight than they have today.
    Question. What will be the role of the Defense Commissary Agency 
(DeCA) under the new commissary management system?
    Army Answer. DeCA will carry out the day-to-day operations of 
commissaries. DeCA will also develop annual financial plans and goals 
for the commissary Agency, commissary system, and all related funds and 
investments, and will forward them to the Commissary Board of Directors 
for approval. Finally, DeCA will ensure that standard commissary 
operational procedures and consistent delivery of the commissary 
benefit across the services is maintained.
    Navy Answer. DECA will still be responsible for running the 
Commissary system and will continue to perform all of the business 
disciplines necessary for day-to-day delivery of the Commissary 
benefit.
    Marine Corps Answer. DeCA will continue to manage the Commissaries 
as they do today. The two major changes relate to whom the Director 
reports to and how funding is provided. As stated above, the DeCA 
Director will report to the Chairman of the Board of Directors will 
report to the Chairman of the Board of Directors vice USD (P&R) and, 
through the Board, will be accountable to the Secretaries of the 
Military Departments and the Service Chiefs for the running of the 
Commissaries. Funding for DeCA will now come from the services, vice 
being provided directly to DeCA by OSD as it has been in the past.
    Air Force Answer. Under the proposal advanced by the Services, the 
Defense Commissary Agency (DeCA) would continue to operate the 
commissary stores. However, DeCA would function under the operational 
control of a directive board composed of military representatives 
rather than members from the Office of the Secretary of Defense. The 
board would set and enforce standards for customer service and 
operational performance, rather than function merely in an advisory 
capacity.

                           Depot Maintenance

    Question. The fiscal year 1999 budget for depot maintenance for the 
active components totals $5.5 billion. The request is $200 million less 
than the amount funded in fiscal year 1998, and is also $200 million 
less than the 1999 column in the fiscal year 1998 budget request. 
Funding for wheeled and tracked vehicle maintenance has been 
substantially reduced in the fiscal year 1999 budget request. The 
reduction in the Army is nearly 50%, a decline of $72 million, and the 
Marine Corps budget for this type of work has been similarly reduced.
    Gentleman, the total depot maintenance budget request is $200 
million less than the amount requested in FY 1998. What risks has the 
Department assumed in reducing the level of funding?
    Army Answer. Depot level maintenance provides long-term readiness 
and ensures the Army's ability to sustain its equipment in support of 
two major theater wars. For the Active component, combat vehicles, 
communications-electronics, and aircraft are funded at 80 percent of 
the requirement. The other commodities are not funded at the same 
levels in fiscal year 1999. However, near-term readiness and industrial 
base related requirements are sufficiently funded. The program provides 
an acceptable level of risk to the Army warfighters and is balanced 
with other Army programs.
    Navy Answer. Although the budget request shows an aggregate 
decrease of $200 million DoD wide, in the case of the Navy's active 
components, the request for aircraft and ship depot maintenance for 
fiscal year 1999 is actually $46 million higher than the fiscal year 
1998 program. This level of funding support a depot maintenance program 
which accomplishes all critical maintenance which maintaining backlogs 
at an acceptable level.
    Marine Corps Answer. The Marine Corps Depot Maintenance funding 
decreases sharply in FY 1999 due to the realignment of funds from the 
Operation and Maintenance appropriation to the Procurement 
appropriation in support of the Amphibious Assault Vehicle (AAV) 
Reliability, Availability, and Maintainability (RAM) Rebuild program. 
Accordingly, the Marine Corps has assumed no additional risk in 
reducing the level of funding.
    Air Force Answer. Active duty Air Force depot maintenance funding 
decreases by $87 million between FY 1998 and FY 1999, but the overall 
funding level (e.g., percentage of requirement funded) remains 
essentially flat as does the backlog in constant terms. This is the 
result of the requirement dropping by $74 million, which maintains the 
overall relationship between funding and requirement. The requirement 
declines with 80 fewer engine overhauls in FY 1999 than FY 1998 
(primarily TF33 engines for the reduced B-52 force structure as well as 
F112 engines for Advanced Cruise Missiles due to a time change interval 
extension from 5 to 6 years) and reduced B-1 software maintenance as 
the Block D software update ramps down in FY 1999. The risks built into 
the FY 1999 depot maintenance budget include the level of funding 
versus requirements (83%) and the fact that $176 million of prior year 
projected working capital fund losses will have to be made up in FY 
1998 vice FY 1999 under a new DoD rate adjustment policy requiring 
losses be paid in the year incurred. We are currently working to source 
this bill in a FY 1998 reprogramming action which will be submitted to 
Congress later this year. If these funds are not made available, we 
will have a problem in both FY 1998 and FY 1999 with our depot 
maintenance program.
    Question. The Committee understands that funding for wheeled and 
tracked vehicle maintenance has suffered a considerable reduction from 
fiscal year 1998 to 1999. What percentage of the total requirement has 
been funded in the Army and Marine Corps budget requests? What is the 
trend in the backlog for such work?
    Army Answer. The Army's total (Active and Reserve components) depot 
maintenance program in fiscal year 1999 is funded at 59 percent. Combat 
vehicles for the Active component, not including the Abrams Integrated 
Management XXI requirement, are funded at 80 percent. The Army does not 
generally perform depot level maintenance on tactical wheeled vehicles.
    Marine Corps Answer. The backlog for wheeled and tracked vehicle 
maintenance in FY 97 is $12.5 million or 13 percent of the total 
requirement. The total requirement has been fully funded in FY 98 and 
FY 99.
    The reduction in the Marine Corps estimate is due to the 
elimination of the AAV from the depot repair program and beginning a 
RAM/Rebuild program for the AAV, financed from the Procurement Marine 
Corps appropriation.
    Question. What is the overall trend for depot maintenance backlogs 
in the fiscal year 1999 budget request? Are the backlogs maintained at 
levels which you consider manageable?
    Army Answer. Our backlog has gone down as an overall trend in the 
fiscal year 1999 budget. The Army considers the backlog manageable.
    Navy Answer. For aircraft, the fiscal year 1999 request and the 
associated outyear funding in the Future Year Defense Program allows us 
to reach backlog levels of 88 active/12 reserve airframes (100 total) 
and 210 active/40 reserve engines (250 total) by the end of fiscal year 
2001. The Fiscal Year 1999 request funds 91% of the ship maintenance 
requirement which is sufficient to accomplish essential overhaul and 
repair work to support the operational forces. This level of funding 
achieves the right balance between our depot maintenance program and 
other competing operations and maintenance requirements.
    Marine Corps Answer. Backlog levels in the FY 1999 budget request 
are $117.1 million, $38.1 million, and $53.3 million in FY 1997, FY 
1998 and FY 1999 respectively. Yes, the backlog levels are considered 
``manageable''.
    The Marine Corps prioritizes requirements by the table of 
authorized material control number (TAMCN) and quantities. We determine 
the risk factors and make a determination of the affordability within 
limited resources. This allows the Marine Corps to focus on mission 
capabilities and readiness.
    Air Force Answer. The backlog trend from FY98 to FY99 is 
essentially flat in constant terms. Active depot maintenance backlog is 
$310 million in FY98 and $323 million in FY99. These levels are 
manageable in the near term but are not sustainable in the long term 
given the increasing age of our equipment. By giving priority to 
aircraft and engine overhaul and missile repair, we can avoid grounding 
aircraft, maintain sufficient spare engine levels, and keep missiles on 
alert and ready. The impact is principally in embedded software, ground 
communications equipment special purpose vehicles, and some component 
repair. The near-term readiness impact of deferrals in these areas is 
more subtle and much more difficult to assess. As our equipment 
continues to age it will be increasingly more difficult to ensure that 
we have adequate depot maintenance funding to keep our equipment combat 
ready. While not ideal, the current backlogs are a reasonable tradeoff 
in order to balance the overall Air Force program.
    Question. Gentlemen, have you encountered instances of quality 
control problems with the output of your depot maintenance activities?
    Army Answer. No. The Army has not experienced instances of quality 
control problems with the output of our depot maintenance activities.
    Navy Answer. While there have been isolated minor problems and 
rework performed following completion of ship maintenance 
availabilities, no significant quality problems have been encountered 
at public shipyards. In-process problems in certain repair functions 
and documentation deficiencies have been found, but these issues were 
identified by routine production and quality assurance procedures and 
corrected prior to completion. The Naval Sea Systems Command (NAVSEA) 
actively works with field activities to resolve these minor problems 
before they become major ones.
    There is no indication of an increase in quality problems at our 
naval aviation depots. A review of data covering a three year period as 
documented by Aviation Discrepancy Reports (Aircraft Defects) and 
Quality Deficiency Reports (Defective Components/Engines) does not 
indicate a negative trend. The aviation depots have traditionally taken 
aggressive action to identify and to correct potential process 
deficiencies before they impact product quality.
    Marine Corps Answer. No, the Marine Corps has not encountered 
quality control problems.
    Air Force Answer. Overall depot maintenance quality remains high. 
However, we did encounter some problems with TF-39 (C-5) engine repair 
work performed at San Antonio Air Logistics Center (SA-ALC) last year. 
Since then, the SA-ALC and General Electric engine teams have 
identified the root causes of the problem and begun implementation of a 
revised process. These changes have already made a significant 
improvement in quality. By this summer, the effort should be complete 
and the quality problems fully corrected.

                       Real Property Maintenance

    Question. The budget request for real property maintenance (RPM) 
decreases by $400 million from $4.8 billion in fiscal year 1998 to $4.4 
billion in 1999. Despite past increases provided by the Congress, DoD 
projects that the backlog of RPM will increase by $2 billion from $14.6 
billion in 1998 to $16.6 billion in fiscal year 1999. Also, the budget 
request terminates the Congressionally established Quality of Life 
Enhancements, Defense account which provided additional funding to DoD 
to accelerate repairs and upgrades to barracks, dormitories and related 
facilities.
    Gentlemen, what percent of your total real property maintenance 
requirements are funded in the fiscal year 1999 budget request?
    Army Answer. In order to balance all readiness accounts in fiscal 
year 1999, real property maintenance is funded at 58 percent of 
requirements.
    Navy Answer. The 1999 budget request provides approximately 70% of 
the funding necessary to arrest the growth in the Navy's critical 
backlog of maintenance and repair.
    Marine Corps Answer. The FY1999 budget request is 68 percent of the 
total real property maintenance requirement for active forces.
    Air Force Answer. The Air Force FY99 budget request for $1.4 
billion only funds real property maintenance requirements at the 
Preventive Maintenance Level (PML). PML represents just the level of 
resources necessary to accomplish periodic maintenance required to 
sustain real property facilities and infrastructure. The annual PLM 
requirement is approximately 23% of total FY99 real property 
maintenance requirements. At this funding level, efforts are limited 
only to recurring maintenance and critical repair projects. Without 
funds to address other urgent repair projects, the backlog will 
continue to grow and reach $4.7 billion at the end of FY99.
    Question. What is the level of real property maintenance backlog 
growth implied by the fiscal year 1999 budget request?
    Army Answer. If real property maintenance continues to be severely 
underfunded, the Army will continue to operate at the emergency repair 
level. Deferring maintenance and repair work will result in the 
continued decay of facility infrastructure, requiring major investments 
for replacements and potentially increased mission failure.
    Navy Answer. With the funding provided in the 1999 budget request, 
the Navy's critical backlog of maintenance and repair for O&M funded 
facilities is expected to grow from a projected $2.7 billion at the 
start of fiscal year 1999 to $3.1 billion by the end of fiscal year 
1999.
    Marine Corps Answer. The Marine Corps backlog in the active O&M 
appropriation is projected to increase from $743 million in FY1998 to 
$814 million in FY1999, or about a 10 percent increase. The backlog in 
the reserve O&M account is projected to decrease by approximately 27 
percent, from $11 million in FY1998 to $8 million in FY1999.
    Air Force Answer. Based on the fiscal year 1999 budget request, the 
Air Force real property maintenance backlog grows from $4.1 billion at 
the end of FY98 to $4.7 billion at the end of FY1999.
    Question. How close is each Service to reaching the upgraded 
dormitory and barracks standards articulated by former Defense 
Secretary Perry?
    Army Answer. Upon execution of the fiscal year 1999 budget, 61 
percent of the U.S. program will be completed, compared to 42 percent 
overseas.
    Navy Answer. The Navy is pursuing construction and conversion of 
all permanent party personnel bachelor quarters to the 1+1 
configuration, and is currently on target to upgrade all of these 
facilities by 2013. To further expedite improving the quality of life 
of our sailors, the Navy is considering an interim bachelor quarters 
construction plan that will include the use of a 2+0 standard when 
necessary as a transitional step toward full 1+1 implementation. The 
Congressionally mandated base-by-base 1+1 implementation plan is 
scheduled to be complete in June 1998.
    Marine Corps Answer. Within the limited resources we have available 
for maintenance of real property and military construction, we have 
placed a great deal of emphasis on bachelor enlisted quarters. As 
currently planned, we will eliminate all inadequate barrack spaces by 
fiscal year 2005 and will eliminate the backlog of maintenance and 
repair for the remainder of our barracks by fiscal year 2004.
    Air Force Answer. The Air Force continues to aggressively improve 
the quality of life for our airmen living on-base in dormitories by 
providing increased privacy and updated facilities. Our strategy is to 
improve privacy by using a dual-pronged approach consisting of both the 
1+1 construction standard and a private room assignment policy.
    In 1997 the Air Force published its Dormitory Master Plan with our 
investment strategy. The first of three steps of the investment 
strategy is to fund the replacement or conversion of all remaining 
permanent party central latrine dormitories no later than FY99. The 
second step is to buy out the deficit of dormitories. The Air Force 
goal is to buy out its deficit of dormitory rooms no later than FY09. 
The final step of the Air Force's investment strategy is to replace or 
convert our existing adequate 2+2 and student dormitories as they wear 
out.
    The second part of our dual-pronged approach is the implementation 
of a private-room assignment policy that authorizes all unaccompanied 
permanent party airmen private rooms by FY02. This policy affects room 
assignments in existing dorms and directly responds to an Air Force 
Quality of Life Survey that indicated 88 percent of single, enlisted 
airmen believe private sleeping rooms would most improve their quality 
of life.
    Air Force leadership is committed to providing safe and adequate 
housing for our unaccompanied enlisted personnel to enhance retention 
and force readiness.
    Question. When does the Department envision reaching its goals for 
upgrading dormitories and barracks?
    Army Answer. With a sustained minimum investment of $430,000,000 
Military Construction, Army, and Operation and Maintenance, Army, 
annually (constant fiscal year 1997 dollars), the Army's goal is to 
complete funding of permanent-party barracks in the United States by 
fiscal year 2008, Europe by fiscal year 2010, and Korea by fiscal year 
2012.
    Navy Answer. At current funding levels, the Navy expects to 
eliminate the critical backlog of maintenance and repair in bachelor 
quarters by the end of 2004 and will upgrade all of these facilities to 
the 1+1 standards by 2013.
    Marine Corps Answer. Within the limited resources we have available 
for maintenance of real property and military construction, we have 
placed a great deal of emphasis on bachelor enlisted quarters. As 
currently planned, we will eliminate all inadequate barrack spaces by 
fiscal year 2005 and will eliminate the backlog of maintenance and 
repair for the remainder of our barracks by fiscal year 2004.
    Air Force Answer. The Air Force plans to achieve our goal of 
upgrading quality of life for our unaccompanied airmen living in 
dormitories by:
    First, buying the last permanent party central latrine dormitories 
with the FY99 MILCON request--a significant and urgent quality of life 
upgrade for our airmen.
    Second, implementing a private-room assignment policy in all our 
existing permanent party dormitories. This policy will be phased-in by 
enlisted grade (E-1 to E-4) over a 6-year period (FY97-FY02). All 
permanent party unaccompanied airmen living in our existing dormitories 
should be housed in private rooms no later than the end of FY02.
    Third, using the Dormitory Master Plan and its investment strategy 
to buy out the deficit of dormitories and replace or renovate the 
worst, existing dormitories no later than FY09. The rest of our 
existing, adequate dormitories will not be upgraded solely to convert 
to the DoD 1+1 construction standard until they reach the end of their 
facility life and warrant a capital facility investment.
    With completion of the three milestones, the Air Force envisions 
housing all its unaccompanied permanent party E-1 to E-4 airmen in 
dormitories, on base, and in private rooms--a comprehensive upgrade to 
the quality of life of our most important resource--our people.

                    Training for Asymmetric Threats

    Question. The Quadrennial Defense Review and the National Defense 
Panel both highlighted the threat of other nations using non-
conventional means to fight the U.S. as a way of offsetting our 
conventional strength. These asymmetric threats include chemical and 
biological weapons, information warfare attacks, and terrorism.
    Which of our major training exercises are conducted with full 
chemical protective gear and how have our forces dealt with conducting 
operations in that environment?
    Army Answer. Army forces use full chemical protective gear during 
portions of most major training exercises. Protective gear is part of 
the soldiers field equipment. Soldiers are required to spend an 
appropriate period of time warning chemical protective gear while 
performing their primary job-related tasks. The goal is to include 
training in exercises to sustain adequate unit proficiency in a 
nuclear, biological, and chemical (NBC) environment. The unit commander 
is responsible for NBC defense training of their unit. Unit proficiency 
is determined by having the unit accomplish its mission under NBC 
conditions during external and internal evaluations to established 
standards. Additionally, commanders have the opportunity to incorporate 
NBC training during rotations at all of the Combat Training Centers 
(National Training Center, Joint Readiness Training Center, and the 
Combat Maneuver Training Center).
    Marine Corps Answer. Combined Armed Exercises (CAXs) held at the 
Marine Corps Air Ground Combat Center at 29 Palms, California, are the 
Marine Corps' only major training exercises. Chemical defense training 
is incorporated into the CAX syllabus as part of the scenario. The 
entire CAX is not spent in full Mission Oriented Protective Posture 
(MOPP) gear, but it is used at appropriate moments for units to 
demonstrate proficiency. CAXs have included Chemical warfare defense 
training as part of the syllabus for several years. The Marine Corps is 
looking at new ways to deal with asymmetrical threats with our Advanced 
Warfighting Experiment series of exercises. Hunter Warrior, Urban 
Warrior and Capable Warrior are exercises designed to utilize and 
experiment with new methods and off the shelf technology to meet the 
asymmetrical threats of the present and future.
    Operations in chemical defense environments are always difficult, 
especially when exacerbated by the desert heat and lack of readily 
available water supplies. Our Marines react reasonably well to this 
environment, because they are trained to deal with its difficulties. 
The predominance of chemical defense training is conducted at the 
squadron/battalion level and below, and not in major exercises, as most 
of the necessary skills and training begin at the individual level.
    Air Force Answer. The Air Force conducts major training with full 
chemical protective gear at the wing level. Every Air Force wing tasked 
to deploy to or located in a chemical-biological high threat location 
exercises their deploying units and in-place forces at least annually. 
This training requires conducting operations in full chemical 
protective gear for extended periods. In addition, the Air Force Major 
Command Inspector General offices periodically evaluate the performance 
of personnel operating in full chemical protective gear during 
operational readiness inspections. Our forces have generally responded 
well in conducting operations in these simulated environments.

                     Recruiting Enlisted Personnel

    Question. The services recruit over 190,000 active duty personnel 
each year. Recruiting quality enlisted members is becoming more 
challenging, because the services are having to deal with a decline in 
youth interest in the military at a time when the military is 
experiencing additional personnel reductions, budget constraints, and 
an increase in the number of deployments.
    What is your recruiting goal for non-prior and prior service 
accessions for 1998? Are your recruiters achieving their mission and/or 
monthly goals?
    Army Answer. The 1998 annual recruiting goal is 67,950 non-prior 
service accessions and 4,000 prior service accessions. Through March, 
the Army has accessed 27,492 soldiers, or 99.7 percent of the 
recruiting mission to date (27,555). In the aggregate, the recruiting 
command has not achieved its monthly contract mission (number of 
applicants who enter the Delayed Entry Pool (DEP)) since September 
1996, but has achieved its monthly accession missions (number of 
recruits who come in Active duty). The effect of meeting accession 
goals, while not meeting contract goals is that the size of the DEP 
gets smaller. As the DEP gets smaller, the recruiters must work harder 
to get contracts ``in close,'' and overall recruiter productivity goes 
down.
    Navy Answer. For 1997, the non-prior service accession goal was 
49,213 and the prior service accession goal was 922. The FY98 monthly 
goal and mission have not been achieved and is delineated as follows:

----------------------------------------------------------------------------------------------------------------
                                                              Oct.     Nov.     Dec.     Jan.     Feb.     Mar.
----------------------------------------------------------------------------------------------------------------
Missed accession goal.....................................      191      525      713       43      699      870
----------------------------------------------------------------------------------------------------------------

    Marine Corps Answer. The non-prior service and prior service (total 
force) accession goal for 1997 was 40,369. The Marine Corps accessed 
40,716, 100.9% of its goal for the year. The Marine Corps has exceeded 
the Department of Defense quality goals of 90% Tier I's and 60% I-3A's. 
During Fiscal Year 1997 the Marine Corps accessed 96.2% Tier I's and 
66.4% I-3A's. The non-prior service and prior service accession goal 
for Fiscal Year 98 through February was 14,905. The Marine Corps has 
accessed 14,905. The Marine Corps has accessed 14,988, 100.6% of its 
assigned goal. In fact, we have exceeded assigned goals for the past 33 
consecutive months. To date in FY98, we have contracted 96.0% Tier I's 
and 55.3% I-3A's. This is ahead of where we were at this time last 
year. Marine Corps recruiting is on track to meet or exceed all quality 
and quantity goals for FY98.
    Air Force Answer. Our FY97 non-prior service recruiting goal was 
30,200 and the prior service goal was 110. Both goals were achieved.
    Question. Give some examples of the Military Occupational 
Specialties (MOS) you are having problems enlisting personnel into. Are 
these MOSs defined as low skill, mid-level skill, or high-skill job 
areas?
    Army Answer. Currently, the Army is overcoming challenges in 
recruiting for the combat arms and combat arms mechanic MOSs. Based on 
initial-entry aptitude requirements, these MOSs are considered low 
skill when compared to other MOSs. Command emphasis and an increase in 
monetary incentives have directly contributed to an improvement in 
recruiting and operating strengths in these MOSs. The table, below, 
displays year-to-date recruiting and strength data for the seven most 
critical combat arms and combat arms mechanic MOSs:

                              [In percent]
------------------------------------------------------------------------
                               Operating strengths     YTD recruiting
                             -------------------------------------------
       Military skills          Fiscal     Fiscal     Fiscal     Fiscal
                              year 1998  year 1997  year 1998  year 1997
------------------------------------------------------------------------
Infantryman.................        100         96         94         60
Field artillery crewmember..        107        101         92         54
Armor crewmember............        110        104         99         70
Tank turret mechanic........         88         77        106         38
Bradley turret mechanic.....         77         69        102         31
Tank systems mechanic.......         96         91        100         93
Bradley systems mechanic....         94         86        110         60
------------------------------------------------------------------------

    Navy Answer. Military Occupational Specialties difficult to recruit 
are Nuclear Field, Fire Control Technician (FT), Missile Technician 
(MT) and General Detail (GENDET). General Detail is defined as a low 
skill job area and all other ratings listed are from high-skill job 
areas.
    Marine Corps Answer. Enlisted recruits are given enlistment 
guarantees in the form of enlistment programs, which are groupings of 
various skills or military occupational specialties (MOS). The ``high 
tech'' occupational fields of Data/Communications Maintenance, 
Communications Electronics, Signals intelligence, and Aviation 
Operations occupational programs present a challenge to our recruiters 
due to their higher line score requirements. The Marine Corps is 
addressing this challenge by offering a $2,000 and $3,000 enlistment 
bonus as incentives to those individuals enlisting for these hard-to-
fill programs. Additionally, the Commanding General, Marine Corps 
Recruiting Command has placed additional leadership focus on filling 
these high tech programs in FY98 and tasked the Region Commanding 
Generals and District Commanding Officers with filling 100% of the 
``high tech'' program requirements.
    Air Force Answer. Attracting people into some Force Specialty Codes 
(AFSCs) is challenging. These include: Combat Control (1C2X1), 
Pararescue (1T2X1), Crypto-Linguists (1N3XX-Germanic, Romance, Far 
East, Mid-East, and Slavic), and Explosive Ordinance Disposal (3E8X1). 
All of these career fields are considered high skill job areas. We've 
implemented a number of initiatives to enhance recruiting for these 
specialties, including targeted advertising and specialized recruiting 
teams.
    Question. What is the average cost for each of the Services to 
recruit and train a new service member?
    Army Answer. The following data is based on fiscal year 1997 Active 
Army accession.

------------------------------------------------------------------------
 
------------------------------------------------------------------------
Recruiting Cost:
  Recruiting Cost Per Accession............................   \1\$10,163
  Military Entrance Processing Command.....................      \2\720
    Total Recruiting Cost..................................      10,883
Training Cost:
  Reception Station (3 days)...............................      \4\600
  Basic Training (8 weeks).................................    \4\8,900
  Advanced Individual Training \3\.........................  17,500 \4\
    Total Training Cost....................................  27,000 \4\
                                                            ------------
    Total Cost:............................................      37,883
------------------------------------------------------------------------
\1\ This cost includes Army College Fund, Enlisted Bonus, Loan Repayment
  Program, Military Pay Army, civilian pay, advertising, communication,
  computer (ADP), recruiter support, and facilities. Because this is an
  average cost per accession, it can vary significantly from year to
  year based on total number of accession.
\2\ This cost includes Military Pay Army, civilian pay, communication,
  ADP, supplies, facilities, physical exams and Armed Services
  Vocational Aptitude Battery test.
\3\ This is based on 10 weeks average.
\4\ This cost includes student's salary, base support, medical,
  ammunition, and facilities.

    Navy Answer. In Fiscal Year 1997, the cost to recruit a service 
member was approximately $6,800. This cost is expected to increase and 
will be adjusted at the end of Fiscal Year 1998 when reprogrammed 
funding for recruiting is calculated against total accessions achieved.
    Marine Corps Answer: Average cost to recruit an enlisted Marine: 
Fiscal Year 1998--$5,018; Fiscal Year 1999--$5,108.
    The cost is determined by the Office of the Assistant Secretary of 
Defense for Accession Policy.
    The average cost to train an enlisted Marine for his/her first 
permanent duty station is as follows:

------------------------------------------------------------------------
                                                          Fiscal year
                                                     -------------------
                                                        1998      1999
------------------------------------------------------------------------
O&MMC...............................................    $1,799    $1,847
MPMC................................................    17,910    17,910
PANMC (AMMO)........................................     (\1\)     1,246
    Total...........................................   $19,709   $21,003
------------------------------------------------------------------------
\1\ Ammunition data prior to FY99 does not allow for a breakdown of
  costs down to the individual school. FY99 costs are only for enlisted
  entry level MOS producing courses.

    These costs do not include costs budgeted by other Armed Services 
to train Marines at other Service locations.
    Air Force Answer. The average cost to recruit a new enlisted member 
into the Air Force is $4,400. On average, it then costs $27,502 to 
train that new recruit. The training cost includes $12,654 for Basic 
Military Training and $14,848 for advanced training. Costs (fiscal year 
1998 dollars) include Operations and Maintenance and military and 
civilian pay.
    Question. Most enlistees enter the Delayed Entry Program (DEP) 
before reporting to duty. The services use the DEP to control the flow 
of recruits into training; the average time in the DEP is approximately 
four months. Does your service have to reach into the DEP sooner than 
anticipated because you are not making your recruiting mission? If so, 
explain how this impacts your overall recruiting mission.
    Army Answer. The Army has not had to reach into our DEP this fiscal 
year to make its accession requirements. We did not reach into our DEP 
last fiscal year so we can speak to the impacts. First, a decreased DEP 
creates a ``just in time delivery'' recruiting environment in which 
recruiters are potentially recruiting large numbers of individuals in 
the same month they need to access to training. This can cause 
recruiters and all levels of the command to focus on recruiting markets 
that are available to access now and potentially lose track of 
investing time in other recruiting markets, such as High Schools. 
Secondly, reaching into the DEP reduces the ``carry over'' into the 
next fiscal year, which adds to the overall recruitment mission for the 
coming year--not only would the command need to make its annual 
requirement, but it must also rebuild the DEP to acceptable levels. 
Both of these circumstances affect other aspects of recruiting in terms 
of command focus, resource requirements, advertising strategies, and 
use of the incentive program, to mention a few. It can take a year or 
two to recover from a decreased DEP. This fiscal year is a recovery 
year for Army recruiting. One of the major objectives this year has 
been to establish a stable recruiting environment for our recruiting 
force. The Army is on track this year to accomplish these goals.
    Navy Answer. Yes, we are having to reach into the DEP sooner than 
anticipated. By reaching into the DEP sooner than anticipated, the next 
fiscal year accession goal is in jeopardy.
    Marine Corps Answer. The extent to which we must reach out farther 
than desired in the DEP to making shipping numbers varies with the time 
of the year. There is a definite yearly recruiting cycle that drives 
the degree to which we must move recruits up in the shipping queue. In 
the summer shipping months, we are shipping recruits who just graduated 
from high school and who have been in the DEP since the previous 
summer. These applicants typically want to ship as soon after high 
school graduation as possible, making the demand for June, July and 
August shipping slots high. As a result, we do not have to reach out in 
the pool to move up recruits. As we enter into the winter and spring 
months, we often move up recruits to avoid large direct-contracting/
shipping requirements.
    We are not reaching into the DEP sooner than anticipated--we track 
pool development closely and are able to anticipate well in advance 
what actions are required to meet shipping requirements in any given 
month. It is fair to say that in the winter and spring months, we will 
reach farther into the DEP than we would like to, but not farther than 
we anticipate. The effects, however, of moving recruits up in the 
shipping queue during these months are generally good. First, moving 
recruits up reduces their change of attrition from the DEP. Second, it 
helps reduce recruit depot attrition since we can then avoid shipping a 
recruit who essentially has no time in the DEP (more time in DEP 
equates to better changes of succeeding in recruit training). Third, 
moving them up helps the individual recruiter quality of life since it 
takes them out of the direct market. And finally, it helps improve 
overall quality of recruits since recruiters are given more time to 
find a quality applicant to ship later and are less inclined to work 
with marginally qualified applicants in a rush to meet direct shipping 
requirements.
    Air Force Answer. No, it has not been necessary to reach into the 
Delayed Entry Program (DEP) early. Our goal is to enter the fiscal year 
with 43 percent of the enlisted accession goal already in the DEP. We 
entered Fiscal Year 1997 with 43.3 percent and Fiscal Year 1998 with 
44.1 percent in the DEP.
    Question. Have you had to lower your original recruiting goals for 
1998? If so, by how much?
    Army Answer. The Active component recruiting mission for 1998 is 
71,950. In October 1997, the 1998 mission was 77,500 (5,500 more). The 
Army's recruiting goal is ``floated'' throughout the year to ensure a 
``fixed'' Army end strength is achieved by the end of the fiscal year. 
Retention and attrition efficiencies have helped the Army to lower its 
recruiting mission. Current projections show that a recruiting mission 
of 71,950 will enable the Army to achieve its end strength goal.
    Navy Answer. No, the original recruiting goal has not been lowered. 
However, it is anticipated that the goal will be missed by 6,000 to 
7,200.
    Marine Corps Answer. The Marine Corps has not had to lower its 
recruiting mission this year. The Marine Corps has accomplished its 
recruiting mission and goals for 33 consecutive months. We have, in 
fact, increased our regular accession mission by 400 for Fiscal Year 
1998 from the original plan due to changes in the manpower plan.
    Air Force Answer. No, the Air Force recruiting goal for Fiscal Year 
1998 has not been reduced. The prior and non-prior service enlisted 
recruiting goal for Fiscal Year 1998 is 30,300.
    Question. What percent of recruits change their minds and ask to be 
released from their enlistment contracts?
    Army Answer. As you know, losses occur while enlistees are in the 
Delayed Entry Program (DEP) for a variety of reasons. Last fiscal year, 
9.4 percent of the individuals we contracted to join the service 
changed their minds or dropped out for reasons such as ``buyers 
remorse'' or a civilian job or educational opportunity. There are other 
valid reasons for an enlistee not to meet his or her commitment for 
enlistment. Many delayed entry enlistees may fail to graduate from high 
school, may incur medical conditions or test positive for drugs or 
alcohol at the time of physical examination, or may incur a legal 
problem or other factor that disqualifies them from military service. 
These are acceptable losses from a practical business point of view. We 
do seek to minimize losses of any type by maintaining the 
qualifications of our DEP members and by reconfirming the commitment of 
those who become concerned with their decision to enlist. We do, 
however, honor the decision of those applicants who firmly decide not 
to fulfill their contractual commitment. We feel this is consistent 
with our all volunteer force.
    Navy Answer. Nine percent of applicants in the DEP change their 
mind and ask to be released from their enlistment contract.
    Marine Corps Answer. Approximately 10% of contracted recruits in 
the Delayed Entry Program (DEP) change their minds and are categorized 
as ``Refusal to Ship'' (RTS). RTS composes approximately 35% of total 
DEP attrition. The remainder of DEP attrition is due primarily to 
failure to graduate; pursuit of higher education; pursuit of officer 
program; overweight; failure of the initial strength test; drug 
violation; medical disqualification; and police involvement.
    Air Force Answer. Fiscal Year 1999, 15.9 percent of recruits in the 
delayed entry program (DEP) dropped out of the program before entering 
active duty. The average DEP drop rate for fiscal year 1990 to fiscal 
year 1997 was 15.3 percent.

                      Recruiting Quality Personnel

    Question. Have your recruiters seen any evidence that the quality 
of recruits is declining among the enlisted accessions? Are we 
enlisting recruits with average or above-average aptitude levels and 
reading skills?
    Army Answer. The Army continues to meet the quality standards set 
by the Army and the Department of Defense. We have seen an increased in 
competition for the youth that we define as our ``Prime Market''--that 
is, the group that contains High School Diploma Graduates, scores in 
the top 50 percent of the Armed Services Vocational Aptitude Battery 
(ASVAB) test, and meets all physical and moral qualifications. Of all 
recruits, 67 percent must score in the top 50 percent of the ASVAB. 
These recruits are above the national reading and math norms as 
measured on the ASVAB. Finding these prime market prospects is 
increasingly difficult. Our recruiters have to wade through thousands 
of applicants who do not meet the requirements for entry into military 
service to find the prospects who do meet the qualifications. The 
quality of our recruits has remained high through our recruiters' hard 
work and through the programs that support the recruiting effort.
    Navy Answer. No, recruiters have not seen any evidence that the 
quality of recruits is declining. However, the recruiting environment 
is the most challenging since the inception of the All Volunteer Force. 
The quality standards for accessions are 95% High School Diploma 
Graduate (HSDG) and 65% Test Score Category I-IIIA (AFQT score of 50 or 
better). Test Score Category I-IIIA represents an above-average 
aptitude level.
     Marine Corps Answer. No. the Marine Corps Recruiting Command 
continues to consistently exceed the quality standards of 60 percent 
Mental Category I-IIIA and 90 percent Tier I recruits set by the 
Department of Defense. During Fiscal Year 97, the Marine Corps 
contracted over 66% Mental Category I-IIIAs (scoring above the 50 
percentile on the Armed Forces Vocational Aptitude Battery) and 96% 
Tier Is (high school graduates/equivalents). Although the Marine Corps 
does not specifically isolate and report ``reading skills'' scores, our 
high school graduate percentages and ASVAB test scores indicate that we 
are recruiting a high quality applicant.
    Air Force Answer. The Air Force uses two primary measures of 
accession quality: the Armed Forces Qualifications Test (AFQT) and the 
percent of recruits with high school diplomas. The AFQT measures an 
applicant's arithmetic reasoning skills, mathematics knowledge, word 
knowledge, and paragraph comprehension.
    The overall quality of Air Force accessions remains high. In fiscal 
year 1997, 79 percent of enlisted Air Force accessions scored in the 
top half on the AFQT and over 99 percent had a high school diploma. 
This is well above the DoD floor of 60 percent scoring in the top half 
on the AFQT and 90 percent high school graduates. In fiscal year 1998, 
there was a single percentage point decrease in the number of enlistees 
scoring above average on the AFQT (78 percent), but we continue to 
maintain a 99 percent high school diploma enlistment rate.
    Question. The military has a number of career fields which require 
greater responsibility and a more diverse workload. Since the majority 
of accessions are young high school graduates, the military is often 
their first full-time job. Do you have any concerns that high school 
graduates will be able to perform the more complex or difficult tasks 
with our increasing weapons technology?
    Navy Answer. The Navy channels applicants into skills based on AFQT 
scores and provides skill training as appropriate. Navy selection, 
classification and training continue to develop Sailors able to perform 
the more complex or difficult tasks with increasing weapons technology.
    Marine Corps Answer. All research conducted over the past 20 years 
indicates that applicants with a traditional high school diploma have 
the highest likelihood of completing their first term of enlistment. 
Graduating from a traditional high school demonstrates a certain degree 
of responsibility and shows that an individual is capable of success in 
a structured environment. As such, this is the best indicator of a 
recruit's ability to succeed in a military environment. To identify 
specific attributes, we administer the Armed Services Aptitude Battery 
(ASVAB) to all applicants. The results of this test are used to 
determine an applicant's suitability for specific technical and non-
technical fields and to place recruits in job specialties where they 
are qualified and will likely succeed. This combined with the self-
discipline and sense of responsibility instilled in recruit training 
adequately prepares young recruits for the difficult requirements of a 
technologically advanced military.
    Air Force Answer. While tasks in the Air Force are becoming more 
complex as technology advances, we are confident in the individuals we 
enlist and in the training they receive. In fiscal year 1997, 99 
percent of all enlistees were high school graduates and 79 percent 
scored in the top half of the Armed Forces Qualification Test. As in 
civilian industry, our enlisted personnel must be trained and 
experienced before being put to work.
    Each Air Force Specialty Code (AFSC) has five skill levels: 
apprentice, journeyman, craftsman, superintendent, and chief enlisted 
manager. Graduates of basic military training go on to advanced 
training tailored to a specific AFSC before being assigned to their 
first duty station. Some are awarded the apprentice skill level at the 
completion of this training, while others continue with on-the-job 
training at their first duty station before award of the apprentice 
skill level. Once a training level is completed, the member enters 
upgrade training for the subsequent level--provided they have attained 
the associated rank for that skill. The proper training foundation: 
supervised and certified up-grade training, and rank-skill linkage 
ensures individuals are given the appropriate tools to perform 
increasingly complex tasks.
    Question. Has the moral character or physical standards of new 
recruits declined in recent years?
    Army Answer. Rise in youth crime, reduced fitness of the youth 
population and other medically or morally disqualifying conditions 
(e.g. asthma, Ritalin usage, tattoo policies, etc.) certainly make the 
individual recruiter's job more difficult, but we have not lowered our 
recruiting standards to accommodate these trends. The Army has, in 
fact, increased the standards for enlistment. Our threshold for certain 
waivers has increased as medical policies have been reevaluated or the 
law has changed. Our waiver trends for both moral and physical 
standards are low and have remained unchanged. Additionally, to assist 
enlistees in preparing for the physical requirements of basic training, 
we include physical fitness programs as a mandatory component of our 
Delayed Entry Program (DEP) training events.
    We do need your help in obtaining legislation that requires the 
release of criminal history information from all local jurisdictions. 
Release should include juvenile as well as adult criminal records.
    Navy Answer. No, the moral character and physical standards have 
not declined in recent years, they have become more stringent.
    Marine Corps Answer. The moral character of our recruits has not 
declined in recent years. Our moral standards and associated waiver 
procedures continue to be the basis for training our recruiters and 
keeping them focused on the right types of applicants. Consistent with 
youth trends in general, the marijuana usage rate among applicants has 
risen in recent years and correspondingly more waivers are being 
granted for experimental marijuana use than in previous years. 
Applicants with experimental drug use are carefully screened and 
granted waivers only if they are otherwise exceptionally well 
qualified. The waiver process is investigative in nature and is 
designed to collect comprehensive information (both good and bad) from 
a variety of sources before a waiver determination is made. We look at 
the ``whole person'' when evaluating a waiver. Those who receive moral/
drug waivers are considered to have favorable qualities that outweigh 
their past indiscretions and as such are considered to be of 
sufficiently sound moral character to successfully make the 
transformation into a United States Marine. The physical conditioning 
of our recruits starts immediately upon enlistment into the Delayed 
Entry Program. Anywhere from 5-10% of applicants cannot pass an Initial 
Strength Test (IST), requiring our recruiters to work with them during 
their time in the DEP to prepare them physically for recruit training. 
Prior to shipping to recruit training, all recruits are required by 
Marine Corps Order to pass the IST. The percentage of recruits failing 
the IST at the recruit depots is small. Those failing are put into a 
physical conditioning platoon where they typically make quick strides 
and enter training in less than three weeks. Clearly our recruiters are 
faced with a more sedentary recruiting market. This challenge is 
overcome through proper screening and progressive preparation of the 
recruit while in the Delayed Entry Program.

                            Retention Issues

    Question. Career uncertainties, longer periods away from home, pay 
and benefit concerns, quality of life issues, and slower promotions are 
key factors affecting decisions of individuals to reenlist in the 
military. Approximately 51 percent of enlisted personnel have less than 
6 years of service, 45 percent have 6 to 19 years of service, and 4 
percent have more than 20 years. More than half of the enlisted force, 
53 percent, is in pay grades E1 through E4. What is your service doing 
to address and maintain a viable retention program?
    Army Answer. The Army retention program is a commander's program 
Commanders and Army Career Counselors are required by policy to 
interview soldiers on a regular basis to insure they are properly 
advised as to eligibility criteria, retraining opportunities, benefits 
programs, and other factors impacting on an Army career. Additionally, 
unit reenlistment training is mandated for all soldiers at least once 
annually. Soldiers also desire to be challenged and to pursue civilian 
education opportunities. Commanders throughout the Army tie education 
incentives into local reenlistment programs. The Army offers choice of 
duty station, either in the continental United States or overseas, and 
retraining options, consistent with available vacancies in the 
soldier's specialty. The Army has also shifted an additional 
$10,000,000 into the Selective Reenlistment Bonus budget at the start 
of this fiscal year to influence reenlistments in shortage and critical 
specialties and closely monitors promotions to assure soldiers are 
afforded reasonable opportunities to progress.
    Navy Answer. Navy has undertaken many initiatives to improve 
retention. We know that the most effective retention tools include 
increasing retention bonuses, improving advancement opportunity, 
maintaining PERSTEMPO/OPTEMPO within established goals, particularly 
between deployments, examining compensation effectiveness, and 
continuing our focus on quality of life improvements. We have already 
instituted a number of initiatives which include turning off our early 
out and first term conversion programs; continuing the use of the 
Temporary Early Retirement Authorization (TERA) to reduce overages 
which are stagnating Navy-wide advancement opportunity; and instituting 
a 3-prong effort to strengthen the effectiveness of our Selective 
Reenlistment Bonus program. SRB improvements include (1) gradually 
increasing the percentage of reenlistees receiving SRB, commensurate 
with pre-drawdown retention requirements; (2) increasing the Navy's 
maximum award levels to the authorized maximum of $45,000; and (3) 
seeking your support to lift the 10 percent cap on the number of 
Sailors to whom we can pay the maximum bonus.
    Marine Corps Answer. We maintain a viable retention program through 
the use of our Enlisted Career Force Controls (ECFC) program. This 
program is designed to actively shape the inventory of Marines by grade 
and MOS. A fundamental element of the ECFC is our First Term Alignment 
Plan (FTAP), whereby we set the number of first term reenlistments 
needed to meet our career force needs. We have met our FTAP goals for 
each of the last four years, and anticipate easily achieving the goal 
this year.
    The Selective Reenlistment Bonus Program (SRBP) assists in 
retaining the required number of first term reenlistments to meet the 
FTAP goal. Without the aid of the SRBP we would not be able to retain 
the requisite number of first term Marines in the right skills to 
fulfill our career force requirements. The SRBP and the FTAP working 
hand in hand are the programs we use to ensure we meet our retention 
requirements.
    Question. What incentives are needed to retain high quality 
personnel in each service?
    Army Answer. Retaining quality soldiers requires a competitive 
benefits and entitlement package, coupled with job satisfaction and a 
reasonable quality of life. Incentives vary with the individual soldier 
and often with the soldier's occupational specialty. Adequate Selective 
Reenlistment Bonus budgets are essential to induce soldiers in arduous 
or highly technical specialties to remain in the Army. Spousal 
satisfaction is a major factor among married soldiers. Adequate 
housing, medical care and post facilities, coupled with a competitive 
pay and benefits package, are the foundations upon which the retention 
program is based. The only incentives other than monetary are those 
geared toward soldiers' desires, such as a continental United States 
and overseas stations of choice, training of choice, and local 
education incentives. All these programs are subject to constraints of 
mission, occupational specialty, and budget.
    Navy Answer. The strong civilian economy and historic low 
unemployment have created a highly competitive civilian job market. 
These conditions, coupled with an increasing gap in pay and overall 
compensation, help push Sailors towards civilian jobs. We support 
soundly based Navy-wide compensation initiatives, as well as lifting 
the cap on the number of high tech Sailors to whom we can offer top 
Selective Reenlistment Bonuses.
    Additionally, as Navy transitions to a steady state force, force 
shaping tools will still be necessary. Extending authorization for the 
temporary early retirement (TERA) program would be highly beneficial, 
enabling Navy to reduce specific rating overages and improve Navy-wide 
advancement opportunity. Low advancement opportunity continues to be 
the number one dissatisfier on Navy exit surveys.
    Marine Corps Answer. Currently our career force continuation rates 
meet or exceed our planned Fiscal Year 1998 estimates. However, with 
the current economic growth and low unemployment rates it is becoming 
exceedingly difficult to compete with the civilian sector.
    One incentive we utilize to the greatest extent possible is the 
Selective Reenlistment Bonus Program (SBRP). Generally, we have 
difficulty retaining our highly technical Military Occupational 
Specialties (MOSs). Offering cash incentives (SRBP) to these MOSs 
assists us in retaining enough Marines to maintain our full combat 
capability.
    Non-monetary incentives are also an important factor in retaining 
quality Marines. Challenging work, real responsibility, and a sense of 
appreciation for their sacrifices are all factors in the retention 
equation. Stability in compensation and retirement programs are also 
essential elements in maintaining a consistent message to our Marines 
as an expression of commitment for their sacrifices.
    Air Force Answer. A wide range of monetary and non-monetary 
incentives are required to retain high quality people.
    Fair and competitive pay is the primary and most visible retention 
incentive. Recent CSAF Quality of Life survey results indicate only 16 
percent of the enlisted force and 22 percent of the officers thought 
their AF pay was as good or better than in the private sector. A pay 
raise above the statutory Employment Cost Index (ECI) level would be 
viewed as a first step toward establishing comparability with private 
sector pay raises. The timing is right for adoption of full ECI pay 
raises or an above statutory pay level raise for fiscal year 1999 
(i.e., strong economic conditions). Unfortunately, funding such an 
increase is outside Air Force resources and would require congressional 
support.
    Equally important to Air Force members is the preservation of the 
value of the retirement system and benefits. The reforms of the 1980's 
effectively reduced the lifetime value of retirement by 25 percent. The 
three retirement plans in effect for today's members are Final Basic 
Pay (50 percent of final base pay at 20 years), High-3 (50 percent of 
the average of the three highest years of base pay at 20 years) and 
Military Retirement Reform Act (MRRA) (40 percent of base pay at 20 
years). During the past four years, there have been 17 separate 
proposals to reduce retirement benefits further. Many of our young 
members say they are not convinced the system in effect today will be 
there when they retire. We are beginning to see the implications of a 
reduced retirement benefit on retention. Enlisted members under the 
Final Basic Pay or High-3 retirement plans ranked retirement as the 
number two factor influencing their decision to stay as opposed to a 
number six ranking for those falling under the Military Retirement 
Reform Act (MRRA) in effect today. Officers under the Final Pay or 
High-3 plans ranked retirement as the number one factor keeping them in 
the Air Force, while those under the MRRA ranked retirement number 
five.
    The Air Force also uses two unique monetary incentives to retain 
highly skilled enlisted members: the Selective Reenlistment Bonus (SRB) 
and Special Duty Assignment Pay (SDAP). The SRB program provides 
monetary incentives for reenlistments in certain skills. The program 
also encourages first-term airmen to retrain into shortage skills. We 
increased the number of skills that we pay an SRB from 41 in fiscal 
year 1995 to 88 in fiscal year 1998 (amount paid has increased from $23 
million to $33 million). The SDAP program provides monetary incentives 
for those assigned to extremely demanding duties with an unusually high 
degree of responsibility (e.g., Combat Controllers, Pararescue, 
Recruiters, and Military Training Instructors).
    ACP and ACIP (the pilot bonus and flight pay) are incentives used 
to retain pilots and navigators. The incentives are particularly 
important considering decreased pilot retention and projected pilot 
shortages. The Air Force is also participating in an OSD-led Aviation 
Compensation Review and supports a career pay for enlisted aircrew 
members. The fundamental idea behind the Career Enlisted Flight 
Incentive Pay (CEFIP) is to increase compensation for career enlisted 
aircrew members to attract and retain career aviation enlisted 
personnel.
    It is also important to couple monetary programs with non-monetary 
initiatives that target Quality of Life programs. Balancing the impact 
of tempo rates has become a retention issue. Tempo rates have increased 
four-fold since 1989 even though the Air Force is 36 percent smaller. 
In fiscal year 1997, 16,400 people were deployed around the world. In 
fiscal year 1998, that number has risen to approximately 20,000. 
Providing access to quality health care; safe, adequate and affordable 
housing; enhancing community support; and expanding educational 
opportunities are all examples of important non-monetary incentives 
that help retain high quality people.
    We are working hard to address these non-monetary issues. To reduce 
tempo, we have begun world-wide sourcing of aircraft to distribute the 
burden evenly and introduced a stand down program to allow members to 
become reacquainted with their families after a long deployment. Under 
health care, we will fully implement TRICARE by June 98 and we have 
added Health and Wellness centers at all bases. During fiscal year 
1997, we eliminated all gang latrine dorms and we began our new ``1+1'' 
standard for dormitory residence. To enhance community support, we 
added 85 new NCOs to our Family Support Centers to assist the families 
of deployed members and we are working hard to increase our capacity 
for child care. Finally, we are continually expanding our educational 
opportunities. Not only does this provide a better quality Air Force 
member, but education programs were listed as three of the top five 
reasons people stay in the service. Tuition assistance was ranked 
number one, off-duty education at Air Force locations ranked number 
four and the Community College of the Air Force ranked number five.
    It is difficult to pinpoint one or two specific incentives that 
will retain quality people. It is the additive effect of the many 
different programs, working in concert, that will retain quality 
people.
    Question. What percentage of first and second termers eligible for 
reenlistment does your service try to retain?
    Army Answer. Retention in the Army is not based on a preset 
percentage, but is determined by mandated endstrength, attrition rates, 
and the Recruiting Command's new accessions. The historical (pre-
drawdown) initial term retention rate of 42 percent of soldiers 
reaching their separation date is the generally accepted gauge of 
success. For mid-career soldiers (those who have reenlisted at least 
once, with less than ten years active service), the historic rate used 
is 70 percent. The actual percentage of each category that must be 
retained may actually fluctuate based on factors mentioned above. Since 
fiscal year 1994, the Army has had to retain approximately 48 percent 
of initial termers and 74 percent of mid-careerists to maintain end 
strength.
    Navy Answer. Navy does not have specific reenlistment goals. We 
have long term, steady state goals for 1st, 2nd and 3rd term retention 
of 38 percent, 54 percent and 62 percent. They are not goals for fiscal 
year 1998 or fiscal year 1999 and may not even be achievable by the 
year 2000, depending on uncontrollable factors such as civilian pay and 
unemployment rates.
    Marine Corps Answer. Our first term reenlistments are based on our 
career force continuation rates and career force (E5-E8) structure. The 
Marine Corps ideal force structure is based on a 32 percent enlisted 
career force structure (four or more years of service) and a top 6 
grade structure of 52.2 percent. As such, we need to retain roughly 
4,600 first term Marines annually. Approximately 21-24 thousand first 
term Marines are eligible for reenlistment; therefore, our annual first 
term reenlistment goal is between 19 and 22 percent.
    Since our first term reenlistments are based on career force 
continuation rates we have no second term reenlistment goal. Career 
force Marines may be granted reenlistment authority as long as they 
continue to meet our high reenlistment standards and service limit 
criteria.
    Air Force Answer. Our overall reenlistment goal for eligible first-
term airmen is 55 percent and for eligible second-term airmen is 75 
percent.
    Question. Are the percentages for reenlistment declining? If so, 
explain how it has changed.
    Army Answer. Prior to fiscal year 1992 (fiscal years 1984-1991), 
the Army's initial term average retention rate was 42 percent. The mid-
career average retention rate was 70 percent.
    In fiscal year 1992, the rates fell to 30 percent and 62.5 percent, 
respectively, which was expected since various drawdown programs 
purposely reduced retention. Rates rose in fiscal year 1993, again as 
expected, since soldiers who did not voluntarily participate in early 
out programs were inclined to reenlist. The fiscal year 1993 rates rose 
to 46.1 percent and 75.6 percent, respectively. Initial term rates have 
steadily increased to the current rate of 54 percent.
    Mid-career rates have remained at or above the pre-drawdown 70 
percent level since fiscal year 1993, but there are some concerns. 
After a high rate of 75.6 in fiscal year 1993, the rate declined to 
73.8 percent in fiscal year 1994 and 72.8 percent in fiscal year 1995.
    In fiscal year 1996, the rate fell to the pre-drawdown level of 70 
percent. Bonus reductions and slow promotions, caused by Military 
Personnel Account shortfalls were major factors in the rate decline. 
Bonuses were increased in fiscal year 1997 and fiscal year 1998 and 
promotions have also been on track since fiscal year 1997. We also 
permitted soldiers in grade E4 to remain on active duty an additional 
two years (10 years rather than 8 years). All these factors resulted in 
higher mid-career retention in fiscal year 1997 (75 percent) and fiscal 
year 1998 through the first quarter (70 percent). The Army believes 
rates will level off. Volatile endstrength and outside factors are 
always a concern, but the recent higher rates have been encouraging.
    Navy Answer. Reenlistment rates for first, second and third termers 
all dropped from fiscal year 1995 thru fiscal year 1997. First quarter 
fiscal year 1998 reenlistment figures are on an upward trend for first 
and second termers, while third term reenlistment rates were impacted 
by the front loading of almost one thousand fiscal year 98 TERA 
retirements:

------------------------------------------------------------------------
                                     1st Term     2nd Term     3rd Term
------------------------------------------------------------------------
FY95.............................        57.7%        60.3%        92.3%
FY96.............................        54.0%        58.7%        84.9%
FY97.............................        50.4%          57%        82.9%
FY98 thru Dec....................        59.2%        60.6%        81.2%
------------------------------------------------------------------------

    Marine Corps Answer. Our reenlistment percentages are not declining 
but are remaining stable. Our first term reenlistments are based on our 
career force continuation rates and career force (E5-E8) structure. 
Consequently, the Marine Corps reenlistment goal is only for first term 
Marines. With a relatively stable career force structure (52.2 percent 
in the top 6 enlisted ranks) our first term reenlistment goal remains 
relatively constant between 19 and 22 percent of our first term EAS 
population. Over the past four years we have achieved our first term 
reenlistment goal and our current statistics indicate that we will 
attain our fiscal year 1998 goal.
    Air Force Answer. Yes, reenlistment percentages are declining. The 
first-term reenlistment rate is down 5 percent over the past five 
years: 61 percent (FY 93) to 56 percent (FY 97), but still above the 
goal of 55 percent. The first-term reenlistment rate for the first two 
quarters of FY98 is steady at 56 percent.
    The second-term reenlistment rate has declined 11 percent over the 
past five years (82 percent in FY93 to 71 percent in FY97), dropping 
below the goal of 75 percent in fiscal year 1997. The second-term 
reenlistment rate for the first two quarters of fiscal year 1998 is 70 
percent.
    The career airmen reenlistment rate has declined 2 percent over the 
last five years: 97 percent (FY93) to 95 percent (FY97) and has held 
steady at the goal of 95 percent into the first half of fiscal year 
1998.
    We are closely monitoring second-term reenlistment. The Air Force 
has more than doubled the number of skills eligible for Selective 
Reenlistment Bonuses. In fiscal year 1995, 41 skills were identified 
costing $24 million, and in fiscal year 1998, 88 skills were identified 
costing $33 million. We are also aggressively working various Quality 
of Life programs.
    Question. At what percentage do you need to maintain your second 
term reenlistment rates in order to avoid gaps in your mid-level 
experienced people?
    Army Answer. The actual retention rate needed to sustain the mid-
level force fluctuates somewhat. Based on recent experience, however, a 
retention rate of 74 to 75 percent appears to be the rate at which 
desired manning levels can be achieved. Currently, the Army is 
attaining desired retention rates, but bonus and incentive programs 
must be maintained at or above current levels to sustain those rates.
    Navy Answer. Navy does not manage to specific reenlistment rates. 
Second term retention is about four percentage points less than 
desirable in the steady state, however, Navy is still carrying a 
surplus of Sailors with nine years or more of service. We will continue 
our force shaping initiatives, including judicious use of the Selective 
Reenlistment Bonus, to target specific skill shortages.
    Marine Corps Answer. The Marine Corps maintains a second term 
reenlistment rate of approximately 60 percent. If there are any 
fluctuations in second term reenlistments, the Enlisted Career Force 
Control manager adjusts the first term reenlistments as necessary. As 
such, the Marine Corps' first term reenlistments are based on our 
career force continuation rates and career force (E5-E8) structure. 
Currently our career force continuation rates are relatively high and 
our career force top 6 structure remains constant at 52.2 percent. 
Consequently, the Marine Corps focuses its reenlistment efforts on the 
first term force.
    First term reenlistments are governed by the First Term Alignment 
Plan (FTAP). The annual FTAP determines the number of first term 
marines (by MOS) required to reenlist to support our career force 
needs. Over the past two fiscal years the FTAP reenlistment requirement 
has remained steady at approximately 4,600 Marines.
    The Selective Reenlistment Bonus Program (SRBP) assists in 
retaining the required number of first term reenlistments to meet the 
FTAP goal. Without the aid of the SRBP we would not be able to reenlist 
the requisite number of first term Marines to fulfill our career force 
requirements (FTAP). Overall, the SRBP and the FTAP working hand in 
hand allow us to meet our retention requirements.
    Air Force Answer. In the aggregate, our goal is to retain 75 
percent of our reenlistment eligible second-term members. The fiscal 
year 1997, the second-term reenlistment rate was 71 percent. The fiscal 
Year 1998 (first two quarters) second-term reenlistment rate was 70 
percent. Current skill-level manning is:
    3-Level (First-Term Airmen) 102%, 5-Level (First and Second-Term 
Airmen) 93%, 7-Level (Career Airmen) 106%
    We are making up for shortages in 5-Levels resulting from decreased 
second-term reenlistment rates by (1) increasing accessions and (2) 
allowing overages of career airmen to remain.
    The 70 percent second-term reenlistment rate reflects the 
aggregate. In the disaggregate, some Air Force Specialty Codes (AFSCs) 
are feeling the effects of lower second-term reenlistment rates more 
than others and gaps are developing. For example, Air Traffic 
Controllers, F-16 Crew-Chiefs, Aircraft Electronic Warfare Systems 
Operations, Combat Controllers and Pararescue are a few of the 
specialties that are below the 75% second-term goal.
    To combat this downward trend in second-term reenlistments, the Air 
Force has taken a series of actions. First, we increased the number of 
skills eligible to receive Selective Reenlistment Bonuses (SRBs). In 
fiscal year 1996, 41 specialties received the bonus ($24 million), but 
in fiscal year 1998, 88 specialties are eligible ($33 million). We have 
also limited retraining out of certain shortage specialties and 
developed specialized recruiting programs for unique AFSCs like Combat 
Controller and Pararescue. The combination of efforts like these will 
help turn the corner on second-term reenlistment.
    Question. What impacts do high turnover rates have on unit cohesion 
and readiness?
    Army Answer. Army personnel turnover rates have not varied within 
at least the past ten years from a range of 10-12 percent per quarter. 
In fact, this is the Army's historical turnover rate. Army planning 
takes this historical turnover rate into account. As would be expected, 
the recent continuation of the Army's historical turnover rate has not 
adversely affected unit readiness or morale.
    However, the Army has been forced to pay special attention to the 
recent increased rates of unit deployment tempo (DEPTEMPO) which have 
resulted from an increased number of contingency operations, such as 
Bosnia and Kuwait. Careful management of both the units selected for 
training and operational deployments, and the programs that assign 
soldiers to/from those deploying units, has minimized the adverse 
impact of DEPTEMPO and turnover rates on either unit readiness or 
quality of life.
    Navy Answer. Clearly, a high turnover rate can be disadvantageous. 
However, its impact is dependent upon the size of the unit. Individual 
units work very closely with the Navy's distribution system, as well as 
their Fleet type commanders, to minimize the impact of personnel 
turnover on unit readiness.
    Marine Corps Answer. The Marine Corps is, by nature, a young force. 
Over 69 percent of our enlisted Marines are serving in their first 
term, resulting in a high turnover rate which is detrimental to unit 
cohesion. To counter this, we have implemented a ``Unit Cohesion 
Program'' to foster unit integrity, improve training and enhance 
readiness. The Unit Cohesion Program seeks to optimize the initial 
enlistments of our young, first term force by stabilizing the Marines 
in a unit for the duration of their initial enlistment.
    We have found that the productive life-cycle of an infantry Marine 
(after boot camp and follow-on MOS training) is about 42 months. To 
foster cohesion during this life-cycle, we are informing squads of 
Marines in boot camp and keeping them together through MOS training and 
subsequent assignment to an infantry battalion where they are likely to 
participate in two, six-month deployments. Additionally, this year we 
have expanded our Unit Cohesion Program across several other combat 
arms occupational fields; in the near term, we plan to expand this 
program across all occupational fields. These efforts are having an 
immediate positive impact on unit readiness.
    Air Force Answer. The majority of turnover in the Air Force is not 
caused by retention problems. Units experience the majority of turnover 
from personnel moves generated by the overseas and professional 
development requirements of our airmen. Whatever the cause, high 
turnover in a unit does create an increased training requirement.
    While this has a minor impact on unit cohesion and readiness, it 
has a large impact on the overall workload in a unit. Our people must 
cover for their fellow workers who are in-processing, out-processing, 
in-transit, or in training. In a time of already high TEMPO, this 
additional workload is difficult to manage and can lead to retention 
problems.

                            Personnel Tempo

    Question. Gentlemen, what is the average time your soldiers/sailors 
are TDY, or away from home during the year for training, exercises or 
deployments?
    Army Answer. In fiscal year 1997, the average time deployed for 
those soldiers deploying on TDY/Temporary Change of Station orders was 
125 days. This represents a decrease from the 196 average days deployed 
in fiscal year 1996. The primary reasons for the reduced average was 
the decreased individual deployment lengths in Bosnia, and a 
proportional decrease in the number of soldiers that deployed there in 
fiscal year 1997.
    In fiscal year 1996, the average tour length in Bosnia was 233 
days. Bosnia accounted for 65 percent of the total worldwide deployed 
population. In fiscal year 1997, the average tour length in Bosnia was 
164 days. Bosnia accounted for 50 percent of the total world deployed 
population. Furthermore, the average deployment length to locations 
other than Bosnia was less than 90 days.
    Navy Answer. The average Navy unit spends approximately 41 percent 
of the time away from home. This number is within the Navy's goal of 
spending less than 50 percent time away over a five year period.
    Marine Corps Answer. Historically, Marines have been and remain 
deployers; readily able to respond when the nation calls. Marines 
deploy as units, and thus, the Marine Corps tracks unit deployment 
tempo or DEPTEMPO in relation to a scheduled cycle. Our DEPTEMPO is 
defined as time accumulated by a unit as periods of 10 days or greater 
away from their home station during a given period. The time away from 
home station will vary depending upon where a unit stands relative to 
its next scheduled deployment and associated training work-ups. The 
Marine Corps goal is 180 days or less deployed per unit per 12-month 
period. The Marine Corps strives for a two to one turnaround ratio or 
at least 12 months between each unit's 6-month deployment.
    In order to better grasp DEPTEMPO and what is considered to be 
normal rotational cycles, following is as an illustrative example for 
infantry battalions:
    During any part of a 12-month period, there are 6 infantry 
battalions deployed with MEU(SOC)s or the Unit Deployment Program to 
Okinawa. Training work-ups coupled with the subsequent 180-day normal 
deployment length experienced by naval forces will routinely exceed the 
180 goal if solely measured over a single 12-month period. Marine Force 
Commanders monitor the DEPTEMPO of their forces, taking appropriate 
action to adjust or change schedules when necessary. Schedules are 
reviewed over the course of a three-year period; the past year and two 
future years. This ensures a balance within the projected schedule, 
evenly distributing DEPTEMPO throughout like units of the operating 
forces. The Marine Corps schedules are geared to ensure the continuing 
provision of forward deployed units to support the CINCs requirements 
while maintaining a rotational training and deployment cycle.
    Air Force Answer. The Air Force desired maximum tempo rate is 120 
days TDY per individual, per 12 months. In fiscal year 1997 Air Force 
people averaged 31 days TDY away from home while aircrew members 
averaged 50 TDY away from home. The average number of Air Force members 
deployed at any given time fiscal year 1997 was 14,600. As of 10 April 
1998 there were 20,453 Air Force members deployed.
    However, these numbers do not tell the whole story. The Air Force 
has nearly 80,000 people forward based that require a rotational base 
at home. In addition, the 14,600 average who were deployed are taken 
from a deployable population that is less than the total end strength. 
When viewed in this light the Air Force has over 40 percent of the 
deployable force forward based/deployed. This results in a significant 
tempo problem which is affecting retention and readiness.
    The tempo for some career fields is much higher than the average. 
For example, 29 percent of Communications/Cable Systems Technicians 
have over 90 days TDY in the last 12 months and 22 percent have over 
120 days TDY in the last 12 months. Similarly, 38 percent of AWACs 
Weapons Directors have over 90 days TDY and 22 percent have over 120 
days.
    Question. Explain how your service manages personnel tempo 
(PERSTEMPO) so it does not have an adverse impact on individual unit 
readiness and training of your people. What systems are in place to 
track PERSTEMPO information?
    Army Answer. The Army's PERSTEMPO measurement is a combination of 
skill tempo (SKILLTEMPO--individual training) and deployment tempo 
(DEPTEMPO--unit deployments). SKILLTEMPO, reported in the Standard 
Installation/Division Personnel System, is the percent of time spent on 
``out of station operational deployments'' by individual, Military 
Occupational Specialty and skill level. DEPTEMPO, reported on the Unit 
Status Report, records the average number of days within a one-month 
period that unit personnel have spent ``away from their bunks'' on 
training, exercises, or operational deployments.
    In fiscal year 1997, the Chief of Staff of the Army (CSA) 
established a DEPTEMPO goal (unit deployments) of no more than 120 days 
per year. All units projecting 120 days deployment or more over any 12-
month period are individually monitored by Headquarters, Department of 
the Army. Army units projecting annual deployment rates exceeding 180 
days require CSA approval to execute deployments.
    The Army continues to spread deployment requirements across the 
force, but with the recognition that some units and soldier 
specialties, by virtue of their mission and skills, will be required to 
deploy more frequently. Army policy, as of February 23, 1998, provides 
a period of stabilization for soldiers returning from an operational 
deployment away from their permanent duty station. Soldiers deployed as 
individuals or within units for a period of at least 30 days as part of 
an operational mission will, to the greatest extent feasible, be 
provided a stabilization period upon return equal to one month of 
stabilization for each month of deployment. In the case where a soldier 
is reassigned from outside the continental United States to within the 
continental United States (CONUS), the soldier retains the unused 
portion of stabilization authorized prior to the soldier's return from 
overseas and will carry it over to the gaining CONUS commander. 
Implementation and management of this policy is the responsibility of 
commanders in the field.
    Navy Answer. The Navy's PERSTEMPO program has been in effect since 
1985. This unit-level system consists of three guidelines:
     a maximum deployment of six months, portal to portal.
     a minimum Turn Around Ratio (TAR) of 2.0:1 between 
deployments.
     a minimum of 50 percent time in homeport for a unit over a 
five-year period (three past/two projected).
    CNO personally approves PERSTEMPO exception requests, which are 
submitted only after Fleet CINCs have first exhausted all available 
options.
    Units in excess of 50 percent out of homeport over 5 years are 
placed on a CNO watchlist for close monitoring.
    Marine Corps Answer. The Marine Corps time-tested rotational unit 
deployment system has been successful in keeping Personnel Tempo 
(PERSTEMPO) at manageable levels by applying proper scheduling to 
minimize personnel impact. By nature, Marines are deployers, and we 
must be readily able to respond when the nation calls. As frequent 
deployers, we must ensure that TEMPO is equal among the type units 
which comprise our deploying forces. Although the Marine Corps does 
into specifically track individual PERSTEMPO, every Marine's 
accumulated deployed time (ADT) and overseas control date (OCD) are 
tracked within our assignment process. These measures enable manpower 
planners to establish a queuing process for future dependents-
restricted overseas assignment tours.
    Instead of PERSTEMPO, the Marine Corps tracks unit Deployment Tempo 
(DEPTEMPO), because we train, deploy and fight as units, not as 
individuals. By controlling unit DEPTEMPO through effective scheduling, 
the tempo of individual Marines will also be controlled. The Marine 
Corps depends upon our local unit commanders to assign Marines to 
deploying detachments in an equitable manner in order to ensure that 
individuals are not over-deployed. The Marine Corps tracks and displays 
its DEPTEMPO data as part of the Joint Monthly Readiness Review (JMRR) 
process, which is also displayed in the Quarter Readiness Report to 
Congress (QRRC).
    Air Force Answer. The Air Force recently developed the Tempo 
Tracking System to collect temporary duty (TDY) data on all personnel. 
We established a desired maximum TDY rate for a 12 month period of 120 
days per individual. The Tempo Tracking System is available to all 
commanders and allows them to sort TDY data by unit, Air Force 
Specialty Codes (AFSC), rank, major weapon system, and social security 
number.
    To manage high tempo rates, the Air Force:
     Implemented global sourcing of our low density/high demand 
assets to spread the deployment burden throughout the Air Force (for 
example, now tasking units in the Pacific and U.S. for Northern Watch 
rather than just units in Europe)
     Continues the use of Reserve Component volunteers
     Reduced time in JCS exercises by 15 percent
     Initiated post-deployment stand downs
     Reduced standard aircraft rotations in Air Combat Command 
from 90 to 45 days
     Reduced Operational Readiness Inspections by 10 percent in 
fiscal year 1998 and plans to reduce another 30 percent by fiscal year 
1999
     Eliminated Quality Air Force Assessments and awarded units 
inspection credit for real-world deployments
    Question: Are there certain units or mission skills that are being 
continually stressed with either normal deployments, training, 
exercises, or for contingency operations? If so, describe which skills 
or units are being ``stretched thin.''
    Army Answer. Global Military Force Policy (GMFP) is an office of 
the Secretary of Defense initiative established in 1996. The objective 
of GMFP is to define the maximum peacetime deployment tempo level that 
can be sustained indefinitely by low density, high demand assets 
without adverse impact on readiness. The Army currently has seven 
capabilities on the GMFP list: PATRIOT, Special Forces, Rangers, Civil 
Affairs, Psychological Operations, Special Operations Aviation, and 
Special Operations Signal.
    The Army internally monitors low density units and Military 
Occupational Specialties (MOSs) for high demand. As of December 1997, 
the following units and MOSs had the highest skill tempo rate of those 
deployed. It is important to note, however, that MOSs move in and out 
of this group depending on the type of deployments being conducted. 
Units: Military Police; Postal; Engineer (Heavy Construction); Medical; 
and Water Purification; Movement Control. MOSs: 77W (Water Treatment 
Specialist); 37F (Psychological Operations Specialist): 67S (OH-58, 
Helicopter Repairer); 93B (Aeroscout Observer); 96H (Imagery Ground 
Station Operator); 51K (Plumber); 13R (Field Artillery Firefighter 
Radar (Operator); 27X (Patriot Missile Repairer); 35C (Surveillance 
Radar Repairer); 52F (Turbine Engine Driven Generator Repairer); 97E 
(Interrogator); 45B (Small Arms/Artillery Repairer); 51R (Interior 
Electrician); 67V (Observer/Scout Helicopter Repairer); and 62F (Crane 
Operator).
    Navy Answer. Overall our seas manning is generally adequate. 
However, manning in certain technical ratings, such as Operations 
Specialist, Fire Control Technician, Aviation Ordnanceman, Intelligence 
Specialist and Data Service Technician, as well as General Detail 
Sailors (GENDETs) (minimally skilled Sailors) is below desirable 
levels. Full funding of the MPN account will help Navy prevent 
personnel gaps and shortages and the extension of drawdown tools, such 
as Temporary Early Retirement Authority, will allow Navy to continue to 
shape the force by reducing manning for ratings that are over-manned 
and increasing the areas that are undermanned.
    Although we generally remain within personnel tempo (PERSTEMPO) 
limits, certain units are stretched thinner than others. These include 
Tactical Electronic Warfare (EA-6B), Airborne Early Warning (E-2C), 
Maritime Patrol (P-3), and Special Project (RP-3, EP-3) units.
    Marine Corps Answer. The Marine Corps does not currently have any 
units or military occupational specialties (MOS's that are continually 
over-stressed from deployments, training, exercises or contingency 
operations. With that said, there are times that unplanned 
contingencies may exacerbate the stresses felt by our lower density, 
high-tempo skills. For example, linguists, some communications skills 
and the EA-6B aircraft community would fall into this category. These 
MOS's are highly technical and/or require lengthy training pipelines, 
both of which make it difficult to sustain healthy inventory levels.
    Generally, the communication, intelligence, and some aviation MOS's 
are ``stretched thinner'' when compared to the remainder of their 
fellow Marines. For example, the EA-6B electronic warfare community, as 
a national asset, is a frequently deployed, yet specialized community 
within the Marine Corps. This ``high demand-low density'' unit type 
requires technicians with specialized skills to maintain the sensitive 
and high tech electronics equipment. We now manage EA-6B deployments 
under the Secretary of Defense's (SECDEF's) Global Military Force 
Policy (GMFP) program which ensures SECDEF approval is granted prior to 
deploying these units beyond their sustainable, long term ability. 
Overall, these high demand/low density MOS skilled personnel become 
stressed for numerous reasons, as we have already stated above. By 
limiting the length of tours to 3 years, the Marine Corps can ensure 
that fresh personnel with these high demand MOS's share in the 
deployment requirements at the same pace as their fellow Marines.
    Air Force Answer. The Air Force tracks and evaluates 730 personnel 
skill areas. Of these, 23 are presently receiving heightened management 
attention:
     Communication Cable Systems Communications
     AWACS Weapons Director
     Pararescue
     Combat Control
     Aerospace Control & Warning
     Aircraft Flight Engineer
     Special Vehicle Maint. (Fire truck)
     Special Vehicle Maint. (Refueling)
     Special Operations (Non-Rated)
     Aircraft Loadmaster
     Communication Antenna Systems
     Security Forces
     Satellite & Wideband
     Slavic Crypto
     Services
     In-Flight Passenger Service
     Fire Protection
     Fuels
     Air Transportation
     Munitions Systems
     Communication Computer Systems
     Supply Management
     Information Management
    Additionally, the Air Force monitors crewmembers assigned to 43 
combat weapons systems supporting current operations. Of these, 26 
warrant increased management attention:
     F-15E
     F-15C
     C-130
     C-17
     KC-135
     RC-135
     MH-53
     HC-130
     E-3 (AWACS)
     F-16H
     F-16L
     C-9
     C-5
     KC-10
     MH-60
     AC-130
     ABCCC
     EA-6B
     F-16GP
     A-10
     C-21
     C-141
     U-2
     MC-130P
     HH-60
     EF-111 (retired 1 May 1998)
    The workload varies by weapon system, and many of the systems 
tasked in support of contingency operations receive focused management 
attention under the Secretary of Defense's Global Military Force 
Policy. Because of the additional stress incurred by many of our 
aircrews and support personnel, the Air Force has introduced a number 
of initiatives to provide a measure of relief for our people, 
including:
                      POST DEPLOYMENT INITIATIVES
     Post deployment stand downs (1 day ``down'' for each 7 
days deployed; up to 14 down days maximum)
     Implemented temporary duty/deployment tracker
     Reduced Joint/Air Force Exercises
     Reduced Operational Readiness Inspections (by 10% in FY98; 
30 percent in FY99)
     Eliminated Quality Air Force Assessments
                   AIRCRAFT UNIT ROTATION INITIATIVES
     Global Sourcing--adjudicates CINC taskings across the 
Combat Air Forces
     Global Military Force Policy--establishes limits on 
tasking of selected low density/high demand assets for contingency 
operations
     Shortened deployments from 90 to 45 days duration for 
aviation units world-wide
    Question. Personnel tempo also affects those personnel who remain 
behind at the home station when units deploy. Describe some of those 
impacts. For instance, are they working more hours per week?
    Navy Answer. The Navy is currently supporting contingency 
operations within regular deployment schedules. However, if the Navy 
were required to maintain the two carrier presence in the Persian Gulf 
indefinitely, a condensed Inter Deployment Training Cycle (IDTC) would 
be required which would decrease the amount of time our deploying 
Sailors spend at home. Condensing the IDTC would also reduce the time 
allotted to complete the necessary maintenance, repairs and training 
required in order to ensure deploying units were combat ready. This 
means the Sailors ashore who support the deploying units would have to 
work harder and longer in a condensed period of time to ensure the 
supported units were ready to go.
    Marine Corps Answer. During these challenging and busy times, the 
Marine Corps continues to answer each time the nation calls. Yet high 
operational tempo has a price--higher usage of aging equipment results 
in increased maintenance, and increased man-hours spent repairing 
equipment which equates to less time and money available for training, 
and possible degradation of readiness.
    Marines performing maintenance duties frequently work twelve to 
sixteen hours per day, six to seven days per week on overlapping and 
rotating shifts, in order to sustain the ninety-two percent ground 
equipment and seventy-seven percent aviation equipment readiness we are 
currently attaining. Aviation maintenance Marines work around the clock 
to provide safe and mission capable aircraft to support their buddies 
on the ground. Our motor pools, artillery gun parks and amphibious 
vehicle ramps are busy places. They find Marines working long hours to 
maintain the high readiness on equipment that is older than most of the 
mechanics working on it. The ``maintenance tempo'' is high; but again, 
through the hard work and dedication of our Marines, we remain ready 
despite high operational tempo.
    Air Force Answer. Since 1986, the Air Force has downsized by nearly 
40 percent, while experiencing a four-fold increase in our operational 
commitments. Airmen who remain behind at the home station are working 
extended duty days and expanded duty weeks to keep the home station 
running. According to the fiscal year 1997 Quality of Life Survey, the 
average work hours per week, for all members, increased from 47 in 
fiscal year 1996 to 50 in fiscal year 1997.
    Question. Explain the personnel policies that are in place for your 
service which minimize redeploying an individual or a unit soon after 
returning to their home station.
    Army Answer. On February 23, 1998, the Army implemented the 
Deployment Stabilization Policy. A key feature of the new policy is 
stabilization from repetitive deployments, enabling our soldiers to 
enjoy a period of time to become reacquainted with their families and 
providing them time to readjust to their living and working 
environment.
    The Army continues to spread deployment requirements across the 
force, but with the recognition that some units and soldiers 
specialists, by virtue of their mission and skills will be required to 
deploy more frequently. Army policy, as of February 23, 1998, provides 
a period of stabilization for soldiers returning from an operational 
deployment away from their permanent duty station. Soldiers deployed as 
individuals or within units for a period of at least 30 days as part of 
an operational mission will, to the greatest extent feasible, be 
provided a stabilization period upon return equal to one month of 
stabilization for each month of deployment. In the case where a soldier 
is reassigned from outside the continental United States to within the 
continental United States (CONUS), the soldier retains the unused 
portion of stabilization authorized prior to the soldier's return from 
overseas and will carry it over to the gaining CONUS commander. 
Implementation and management of this policy is the responsibility of 
commanders in the field.
    We must ensure continued readiness of the Force, and the care of 
our soldiers and their families. This stabilization policy will help 
limit the adverse effects of continual and repetitive deployments.
    Navy Answer. In October 1985, Navy initiated a concerted effort to 
eliminate excessive operating tempo (OPTEMPO) for ships and aircraft 
squadrons and ensure a reasonable personnel tempo of operations 
(PERSTEMPO). The program balances our requirements to support national 
objectives, with reasonable operating tempo and quality of home life 
for our naval personnel. The PERSTEMPO/OPTEMPO program is built around 
three specific goals:
    --Maximum deployment length of six months.
    --Minimum 2.0:1 Turn Around Ratio between deployments.
    --Minimum of 50 percent time in homeport for a unit over a five 
year period.
    FLTCINCs are required to submit a quarterly report to CNO 
encompassing the five year PERSTEMPO/OPTEMPO cycle. If a unit is 
projected to violate the criteria, an exception message with detailed 
justification must be forwarded to CNO along with a recommended course 
of action to bring the OPTEMPO/PERSTEMPO back in line with the 
established limits.
    Marine Corps Answer. The Marine Corps measures and tracks its tempo 
in the same manner that it trains, deploys, and fights--as units, not 
as individuals. We measure Deployed Tempo (DEPTEMPO), not Personnel 
Tempo (PERSTEMPO). DEPTEMPO is accumulated time deployed during a given 
annual period. This accumulated time is the number of days deployed 
starting at periods of ten days or more away from home station. Our 
goal is 180 days or less deployed per unit per 12 months, when looked 
at over a 36 month time period. We strive for a two to one turnaround 
ratio or at least 12 months between each unit's 6 month deployment. 
Every Marine's accumulated deployed time (ADT) and overseas control 
date (OCD) are tracked within our assignment process. These measures 
enable manpower planners to establish a queuing process for future 
dependents-restricted overseas assignment tours.
    With most contingencies that the Marine Corps responds to being 
absorbed by our forward deployed forces, tempo should remain manageable 
in the future. We will be able to maintain and sustain readiness in the 
face of this constant tempo by continuing to use our time-tested and 
effective rotational deployment scheme, and making adjustments as 
necessary.
    Air Force Answer. We aggressively manage tempo to ensure time away 
from home is minimized and deployments are fairly distributed. The Air 
Force desire is to limit the total number of days an individual is on 
Temporary Duty (TDY), to no more than 120 days within a 12 month 
period.
    Our Tempo Tracking System enables commanders at all levels to 
manage their resources effectively. In cases where individuals are 
tasked, the Tempo Tracking System is used by the local squadron 
commander to fair share deployments among the members of his squadron. 
Air Force-wide, the tracking system is used to deconflict taskings, 
globally source taskings, and ensure that we fairly distribute taskings 
among MAJCOMs/squadrons.
    Not only do we track individuals to minimize redeploying them soon 
after returning home, we also work to account for the effects of 
deployments on Permanent Change of Station (PCS) moves. Our Tempo 
Tracking System automatically adjusts an individual's overseas return 
date for every overseas TDY of two or more days. This adjustment 
lessens the chance an individual will be chosen for an involuntary 
overseas assignment. After enough days have been served TDY overseas, 
an individual can get credit for an entire overseas PCS assignment. In 
an effort to emphasize equity, other personnel policies have been 
established to consider the impact tempo has on assignments.
     If an individual is selected for a consecutive assignment 
to a high-TDY unit (a unit performing more than 179 days TDY annually), 
they can request a cancellation or new assignment.
     Individuals are not selected for involuntary overseas 
assignments when they are on TDYs overseas or in the CONUS 
participating in a contingency, rotational, or exercise TDYs.
     Following an overseas TDY, an individual will not receive 
an involuntary overseas assignment within 120 days after completing the 
TDY.
    Question. We are relying heavily on the Reserve components to 
support the ongoing operations in Bosnia and Southwest Asia. Can you 
describe how their level of participation in operations in recent years 
has risen?
    Army Answer. Recent deployments for the Reserve components have 
included soldiers from both the Army National Guard and United States 
Army Reserve. Specific instances include participation in various joint 
exercises and in ongoing operations, such as Joint Guard and Operation 
Southern Watch. As part of our ``Total Force'' concept, the Guard and 
Reserve are indispensable to U.S. military operations. The Reserve 
component's participation in operations has risen as the Active force 
structure has reduced and the employment of the military has increased. 
Examples of the Guard and Reserve providing valuable support include 
the counter-drug effort, Partnership for Peace, and the overseas 
deployment training program. Over 2,000 mobilized reservists supported 
operations in Haiti, during 1994-1995. Since December 1995, nearly 
16,000 Guard and Reserve soldiers have mobilized in support of 
operations in Bosnia. Only recently, 65 Army National Guard volunteers 
returned from Macedonia, where the soldiers provided engineer, military 
police, and aviation support for six months to Task Force Able Sentry. 
Currently, there are 205 Reserve component soldiers mobilized to 
support operations in Southwest Asia.
    Marine Corps Answer. The Marine Corps Reserve is an essential part 
of the Marine Corps Total Force. Over the past several years the Marine 
Corps has increased its use of reserve forces in operational missions 
and contingency operations. The Marine Corps relies on Reserve 
component members to augment and reinforce our active forces during 
times of increased OPTEMPO. For example, Reserve Marines participated 
in operations such as Restore Hope (116 Reserve Marines), Sea Signal 
(535 Reserve Marines), and Uphold Democracy (49 Reserve Marines). 
Today, the Marine Corps is providing Reserve augmentation to Operation 
Joint Guard from our Reserve Civil Affairs Group. Reserve forces are 
integral to the accomplishment of the Combatant Commands' mission 
requirements.
    Air Force Answer. Since the end of the Cold War, our reliance on 
the Reserve Component has increased dramatically. From 1953 to 1990 the 
Air Force Reserve participated in a total of 11 contingencies. Over the 
last 7 years, participation has risen 76 percent as the Air Force 
Reserve engaged in 34 world-wide contingency operations. On average, 
over 1,000 Air Force Reservists and over 1,000 Guard personnel are 
deployed around the world every day.
    For the most part, the Guard has been able to rely on volunteers to 
support all operations in Southwest Asia since the Gulf War. Until 
June, 1996, this had also been the case in Bosnia; however, due to lack 
of sufficient volunteers to meet requirements for air traffic 
controllers (ATC), the majority of whom are provided by the Guard, a 
structured, rotational Presidential Selected Reserve Call-up was 
implemented and continues today for Guard ATC personnel.
    Question. What is your perception of the impact these continuing 
deployments have had on Reserve personnel, their families, and their 
jobs?
    Army Answer. The Army Reserve conducted several soldier retention 
studies that focused on the question of deployment impact. Generally 
the level of impact and effects on retention are influenced by a 
combination of issues, e.g., soldiers' families, employment situation, 
and employer support along with each deployment. Findings from the 
study, surveys and focus groups over the last two-year period reflect 
that deployment alone has not been a sole reason for leaving the US 
Army Reserve. However, they are concerned about repeated deployments 
for operations other than war and, the length of deployments, both of 
which affect their intent to remain in the Reserve.
    Generally, Army National Guard families do very well during 
mobilization and deployments. A number of factors contribute to this 
situation: trained volunteers; involved State Family Program Staff; 
soldier screening through personal interviews; and an active 
communication network. Guard families have continued to come far since 
Desert Shield and Storm, responding well to the demands of Guard 
deployments. This situation is attributed to the broad-based Guard 
Family Program instituted prior to Desert Shield and Storm. The 
National Guard Family Program invests a great deal of time and money to 
maintain the Guard family in a ready state in preparation for 
deployment. Additionally, ``Soldier-Screening'' is conducted 
immediately upon mobilization to identify soldiers and families of 
greater risk, who may not fare well during deployment. Investigation of 
the individual situations and, if appropriate, reassignment is 
practiced on a case by case basis. Units are brought back to authorized 
strength by ``cross leveling,'' using suitable volunteers from 
neighboring states and units to ``backfill'' those who cannot deploy 
due to temporary family factors. Hence, most potential problems are 
identified and mitigated before actual deployment. Through a combined 
strength of over 20,000 paid and volunteer staff, the communications 
network provides adequate coverage to ensure the quick flow of 
information, up and down, as well as laterally through the Family 
Program communication chain. This extensive family support network and 
infrastructure allows us to meet deployment family needs and hereby 
support the mission.
    During recent deployments, many Quality of Life issues have been 
identified and resolved. Unresolved issues are identified and are 
incorporated into the Army Family Action Plan and Guard Family Action 
Plan when not tasked to the proponent area of interest for resolution. 
Quality of Life issues are at the forefront of Army Guard concerns and 
will continue to be so.
    Navy Answer. The overall impact is a positive one. Although the 
recall authority is involuntary, the Navy has been successful in 
attaining Reservists who volunteer for these demanding assignments, and 
who upon completion of their duties, often request to extend under 
Active Duty for Special Work (ADSW). The Reserve community embraces the 
opportunity to seamlessly integrate with the active Navy.
    Marine Corps Answer. There have not been any negative effects that 
have been observed on Reserve personnel, their families, and their 
jobs.
    Air Force Answer. The Air Force Reserve conducted a command-wide 
survey in December and January to determine what impact high 
Operational Tempo is having on reservists, their families and their 
jobs.
    Overall, the survey indicated that employer and family support has 
remained relatively stable between 1994 and 1997; however, aircrews are 
experiencing a disproportionately higher level of stress resulting in 
greater job conflict, increased family problems, and decreased 
willingness to volunteer for reserve duty. Specifically:
     10 percent of all respondents (including 17 percent of 
aircrew) are considering leaving the Air Force Reserve due to problems 
their participation is causing in their civilian jobs.
     20 percent of respondents (including 44 percent of 
aircrews) indicated the Reserve is demanding too much additional time 
away from their civilian job.
     35 percent of respondents indicated the amount of time 
absent to perform Reserve duties is causing some family problems (one 
2.5 percent indicated serious problems). 57 percent of aircrews 
indicated family problems (only 5.0 percent indicated serious 
problems).
     Aircrews are slightly less willing to volunteer as often 
or for as long a period as indicated in 1994.
     Despite these problems, over 69 percent of respondents 
(including 76 percent of aircrews) are very satisfied with their 
reserve jobs. Fewer than 3 percent of respondents indicated they are 
very dissatisfied.
    With respect to our Air National Guard personnel, aside from 
isolated instances where we have had to use a Presidential Selected 
Reserve Call-up (PSRC), all deployed Guard personnel have been 
volunteers, and there has been minimal impact to their jobs, their 
families, or them. There have, however, been a few complaints from 
employers whose employees have volunteered for extended overseas 
deployments (30 to 90 days). We are working closely with employers 
through the Employer Support for the Guard and Reserve program to 
minimize/address these instances.
    Our primary concern is when, for example in Bosnia, we had to use 
the PSRC. Because the Guard owns 70 percent of the combat 
communications and 62 percent of the air traffic control assets across 
the Air Force, we were not able to obtain enough volunteers to meet 
requirements and thus had to deploy these personnel under the PSRC. 
They have been deployed since June 1996 and some units have had to 
deploy twice. When faced with a second 120-day military operation other 
than war tour within a 2-year period, our Guard personnel do experience 
decreasing family and employer support.
    Question. Do you believe Reserve recruiting and retention will 
suffer as the result of the Bosnia deployment, for instance?
    Army Answer. Currently there are no documented analyses into the 
effect these deployments have on Army Reserve recruiting. 
Notwithstanding the absence of hard data, there still exists a 
widespread perception that multiple deployments of units over time does 
have negative effects on local recruiting markets, although the effect 
on the national market is negligible. The major effects appear to be 
limited to markets that surround the more heavily deployed units. The 
impact of repeated deployments on soldiers, their families, and their 
employers could eventually have a negative effect on retention as well. 
Over time this could cause a serious erosion in deployability of the 
very units that are most needed.
    Navy Answer. No. The overall sense of accomplishment is high and 
the Active and Reserve component are working side by side to provide 
valuable, real-time support to the war-fighting CINCs.
    Marine Corps Answer. No. We do not believe that Marine Corps 
Reserve recruiting and retention will suffer as a result of the Bosnia 
deployment.
    Air Force Answer. People are the heart and soul of any 
organization. This is especially true for the Air Force Reserve and Air 
National Guard. Both the Reserve and Guard attempt to recruit and 
retain men and women who are best qualified and able to meet mission 
requirements; provide them with opportunities for development and 
advancement and a safe working environment; and ensure they communicate 
effectively with families and employers. Quality of life is a 
significant factor.
    In addition to their civilian jobs, our citizen-airmen perform 80-
120 days of military duty per year, depending on their mission area. 
This puts stress on families and employers, which in turn puts stress 
on our members and affects their job performance. Although we do not 
believe overseas deployments have negatively impacted our recruiting 
and retention, we are paying close attention to some specific areas. 
For example, due to insufficient volunteers to support our air traffic 
control operation in Bosnia, a mission supported primarily by the 
Guard, we have had to use a Presidential Selective Reserve Call-Up.

                              Medical Care

    Question. The Military Health Services System (MHSS) is changing 
from a fee for service health care program (CHAMPUS) to a managed care 
system called TRICARE. TRICARE is now being provided in most of the 
regions of the country. This transition has caused some anxiety and 
confusion among beneficiaries. How satisfied are you with the medical 
care of the service? Do the troops like TRICARE?
    Navy Answer. I'm extremely pleased with the innovative methods the 
men and women of Navy Medicine are developing to keep our Sailors and 
Marines healthy, fit and on the job. ``Taking Healthcare to the 
Deckplates;'' and, ``Moving Information, Not People;'' are two of the 
Navy Surgeon General's four goals which have greatly improved customer 
service to our people throughout the world. Taking healthcare to the 
deckplates means taking care of Sailors and Marines as close to their 
units as possible so they can stay on the job. It means providing care 
in mobile vans at pierside, in aviation squadrons, at base gyms, in 
barracks and in the operational environment. Navy Medicine is also 
using technology to move information, not people. Instead of moving 
Sailors and Marines closer to specialized care, our medical people are 
using preexisting technology to bring health care closer to them. 
Today, telemedicine has become an alternative to MEDEVAC flights, not 
only saving time and money, but providing advanced and specialized 
healthcare to our people serving on ships and in remote locations.
    TRICARE is a drastic change in the way health care services have 
traditionally been provided to our people and, as with any change, can 
be unsettling. Implementation of TRICARE has not been fully completed, 
however the medical personnel of all three services are working 
together to address the concerns of our customers. Despite the expected 
difficulties in seeing through such a major undertaking, the initial 
statistics are promising. Enrollment in TRICARE has been greater than 
original estimates and the disenrollment rate is less than one percent.
    Marine Corps Answer. TRICARE is a profound and fundamental change 
in the way we provide health care services and as with any change it is 
unsettling and causes anxieties for some of our troops. UnSECNAV has 
appointed a task force to develop strategies for simplifying TRICARE 
and improving understanding. BUMED is committed to working to resolve 
problems. A TRICARE customer advocacy program demonstration was 
implemented in mid-1997. As service members become more familiar with 
TRICARE and some of its complexities are addressed, we believe TRICARE 
will be better received.
    Air Force Answer. I am confident that the quality of Air Force 
medical care is second to none.
    Unfortunately, the transition to TRICARE, which will be fully 
implemented this summer, is causing concern and confusion among active 
duty members. Air Force Quality of Life survey results attest to this, 
showing only 44 percent of the enlisted and 53 percent of the officers 
expressed satisfaction with medical care for both themselves and their 
families. However, the Quality of Life survey went to active duty 
personnel around the globe, even though TRICARE has not yet been 
implemented worldwide. We feel more meaningful and positive results 
will be generated once TRICARE has been in place worldwide for one to 
two years.
    Those areas where TRICARE is firmly established have shown 
significantly higher satisfaction with medical care among active duty 
members as compared with the Quality of Life survey. The lastest DoD 
Satisfaction Survey showed 74 percent of enlisted and 89 percent of 
officers who have actually used the TRICARE system have rated 
satisfaction as good to excellent. Therefore, we expect continued 
education about, and greater familiarity with, TRICARE to have been an 
increasingly positive impact on satisfaction.
    Question. Do you get many complaints from the troops about medical 
care? What types of complaints?
    Navy Answer. I have received complaints associated with the TRICARE 
program. However, we must keep in mind the TRICARE is not fully 
implemented and, like any new program, has experienced some start up 
problems. The Assistant Secretary of Defense (Health Affairs) and the 
three Surgeons General are working aggressively to address and solve 
the key concerns of our troops: portability; improving access to care 
for geographically separated units; solving billing concerns; and, 
claims processing in order to make the system more customer-focused and 
user-friendly.
    Marine Corps Answer. It is true that the transition from CHAMPUS to 
TRICARE has resulted in some confusion and anxiety which have been 
manifested in the form of complaints. The majority of the complaints 
have targeted the system and not the medical care received. The 
Secretary of Defense/Health Affairs Office has initiated action to 
ensure issues such as access for those in remote locations, enrollment, 
billing, and services are promptly addressed.
    Air Force Answer. Our men and women value greatly the medical care 
they receive. However, there is some anxiety about TRICARE. In spite of 
initial problems with the program start-up, Air Force people are very 
satisfied with the medical care they are receiving under TRICARE 
(active duty members are automatically enrolled). A recent DoD Health 
Care Satisfaction Survey given to individuals who have actively used 
TRICARE showed 74 percent of enlisted members and 89 percent of the 
officers rated their level of satisfaction as good as excellent. Of 
particular note, the quality of medical care received ranked the 
highest of all categories.
    Retired individuals 65 years and older have voiced dissatisfaction 
with the military health care systems due to diminishing space-
available care. The Air Force supports the DoD's efforts to continue 
pursuing legislation for full Medicare Subvention, which would allow 
older retirees to participate in TRICARE. Additionally, we support DoD 
in studying alternatives for these Medicare-eligible beneficiaries.
    Question. What is your impression of the medical care programs for 
dependents?
    Navy Answer. I believe we have a good medical program for our 
dependents where TRICARE is fully implemented and working. TRICARE 
Prime offers the least expensive option for our Active Duty Family 
Members (ADFMs). Prime enrollment data reveals robust enrollment among 
ADFMs. Retiree enrollment is also strong. Recent trends are encouraging 
with enrollment rising and patient satisfaction increasing. 
Additionally, the vast majority of Prime enrollees are re-enrolling. 
While encouraging, I believe we could make the system more ``user-
friendly'' by automatically enrolling ADFMs in TRICARE Prime at our 
MTFs and eliminating annual reenrollment. This would simplify the 
process and help our young Sailors and their families. However, seniors 
not eligible for TRICARE Prime feel disenfranchised from the system. 
Expanding the Mail Order Pharmacy Benefit for Medicare-eligibles is 
affordable and the right thing to do.
    Marine Corps Answer. Enrollment data reveals robust participation 
among active duty family members. Recent trends are encouraging with 
patient satisfaction increasing. We continue to work hard to overcome 
confusion and simplify TRICARE.
    Air Force Answer. Our medical care program for dependents, TRICARE, 
provides high quality, cost effective health care. the TRICARE 
standard-of-care requirements are extensive and continuously evaluated 
for compliance. As a result, TRICARE offers excellent health care for 
our families. TRICARE also offers family members three health care 
plans vice the single plan, CHAMPUS, previously available. The TRICARE 
standard option mirrors the old CHAMPUS program. TRICARE Prime is a 
Health Maintenance Organization option that offers the greatest cost 
savings to enrollees who agree to be treated solely through the TRICARE 
Prime system. TRICARE Extra is a Preferred Provider Organization option 
that offers reduced co-payments, compared to TRICARE Standard, to those 
who use only the providers in the network. These three options allow 
families to choose the health care plan which best meets their needs.
    Question. What feedback are you getting from the troops regarding 
the new dental plan?
    Navy Answer. Overall enrollment and satisfaction with the TRICARE 
Active Duty Family Member Dental Plan is good; attitude toward 
contractor, United Concordia Companies Incorporated by both civilian 
dentist and military family members has improved dramatically over the 
last 3 years. Navy and Marine Corps enrollment has remained constant 
over the last three years and is the highest of the military services. 
Contractor patient satisfaction survey indicates that 80% of enrolled 
beneficiaries rate the program Good or Excellent.
    The TRICARE Retiree Dental Program was implemented Feb 1998. 
Enrollment is strong, over 100,000 sponsors have enrolled during the 
first 6 weeks. Feedback is minimal as the program has been on line only 
6 weeks, but enrollment has been very brisk, exceeding both DoD and 
contractor expectations. Program appears to be very popular and much 
appreciated by the retired community.
    Our TRICARE Selected Reserve Dental Program was implemented in Oct 
97. Subscription to this program by all the services has been 
disappointing, less than 20,000 total military enrollment, and less 
than 5,000 Navy and Marine Corps enrollees. It may be too limited in 
scope of coverage to compete with dental insurance benefits offered by 
the employers of many reserve personnel.
    Marine Corps Answer. Overall, feedback indicates satisfaction with 
the new dental plan. The TRICARE Active Duty Family Member Dental Plan 
Beneficiary Survey revealed:
    (1) 59 percent of respondents reported satisfaction with the 
benefit and 79 percent stated they would recommend the plan to others.
    (2) Other positive responses included: the number of working 
dentists; ease of making an appointment; minimal travel distance to a 
provider's office; quality of care, claims processing, and complaint 
resolution.
    However, a few criticisms indicated a lack of sufficient 
orthodontic coverage, and that pediatric care is difficult to obtain.
    Air Force Answer. The Department of Defense and the Services have 
been tracking customer satisfaction with the TRICARE Active Duty Family 
Member Dental Plan (FMDP) since it changed contractors, on February 1, 
1996. Although the benefit package was unchanged, the transition was 
initially troubled by marketing, enrollment, and provider network 
development problems. As the Office of the Assistant Secretary of 
Defense (Health Affairs) (OASD(HA)) and the contractor addressed these 
issues, satisfaction increased. An October 25, 1996, memorandum titled 
``In Progress Review of the TRICARE Active Duty Family Member Dental 
Plan'' stated high beneficiary satisfaction with the FMDP and a 
significant decrease in the complaints. Overall, beneficiaries praised 
reductions in the claim processing times and the high quality of dental 
care. OASD(HA) directed an additional customer survey in June 1997. 
This telephone survey of 2000 beneficiaries in 12 TRICARE Regions 
showed over 80 percent satisfaction with the FMDP. The TRICARE Service 
Office in Denver, Colorado, continues to assess and improve the 
performance of the current FMDP contractor, United Concordia Companies, 
Inc.

                  Department of Defense Modernization

    Question. Last year, Congress provided approximately 
$81,000,000,000 for the Department of Defense (DoD) modernization 
program. The DoD fiscal year 1999 budget request for modernization 
program is over $84,000,000,000.
    Do you believe that there is enough emphasis in the fiscal year 
1999 budget on Army modernization programs? Why?
    Army Answer. The Army has developed a budget that adequately funds 
our programs consistent with our modernization strategy and within the 
existing fiscal constraints. The Army's fiscal year 1999 budget is 
approximately $1,700,000,000 above last year's President's budget 
submission. Based on fiscal constraints, the fiscal year 1999 
President's budget and Future Years Defense Program are adequate 
operationally and economically. An increase of approximately 
$1,000,000,000 is realized each year throughout the Program Objective 
Memorandum.
    Navy Answer. Increasing our investment to support the 
recapitalization and modernization of the Navy is essential to maintain 
operational primacy. Last year the QDR and the National Defense Panel 
validated the need for our forward expeditionary posture and the 
requirement to maintain a 12 Carrier Battle Group and a 12 Amphibious 
Ready Group structure, but with reduced combatant and submarine force 
levels. We are proceeding with our plans to equip ourselves with the 
weapons necessary to accomplish National Command Authority taskings 
from peacetime surveillance to full scale war.
    Marine Corps Answer. As the Nation's force in readiness chartered 
by the 82d Congress ``to be the most ready when the Nation is least 
ready,'' we have funded our top priority, near-term readiness. However, 
we have once again been forced by topline constraints to defer 
modernization--the future readiness of the Corps--as well as many 
quality of life programs, and funding for the infrastructure at our 
bases and stations in order to fund near-term readiness. As the 
Commandant has stated, we are quite literally mortgaging today's health 
at the expense of tomorrow's wellness, and have been for at least the 
last eight years. We are facing virtual block obsolescence of critical 
aging ground and aviation equipment which is becoming more and more 
expensive to maintain in terms of parts as well as manhours.
    For example, in the area of aviation, our CH-46E Sea Knight was 
first introduced to the fleet in the mid 1960s, and has an average life 
of over 30 years. Our CH-53D, which is also approaching 30 years of 
age, has exceeded its original projected life by seven to ten years, 
and our fleet of KC-130Fs is approaching 40 years of age, almost twice 
the original projected life. The V-22, replacement for our CH-53Ds and 
CH-46Es, was accelerated by the QDR, allowing us to procure 11 more 
aircraft within the FYDP than originally planned, however, we need to 
ramp up to the maximum economical rate of production as soon as 
possible after completion of the test phase. This budget allows for the 
necessary research and development to upgrade our UH1Ns and AH1Ws, 
however, actual procurement of this critical upgrades does not begin 
until FY 2002.
    In the area of ground equipment to support our Marines, while this 
budget initiates a reversal of the past years' historically low levels 
of modernization funding, the FY 1999 level is considerably below our 
historical average of $1.2 billion. Assuming no change in our topline, 
we begin to approach that level in the outyears; however, it is 
essential to note that it will take a long time to recover from the 
cumulative effects of low procurement levels necessitated during the 
budget deficit recovery years.
    We have used many approaches to mitigate the impact of these 
shortfalls. We have aggressively pursued improved business practices, 
bought used items like recapped tires instead of new ones, and 
remanufactured major aviation end items such as the AV-8B and the AH1W/
UH1N. We are pursuing the most cost effective options to replacing our 
aging fleet of ground equipment including the five ton truck, the 
HMMWV, and the howitzer. We have thus supported the QDR recommendation 
for a modest reduction in force structure to free up funds for needed 
modernization. I believe we have a cogent, common-sense approach to 
obtain a 21st century Marine Corps that will be effective, efficient, 
and affordable; but we cannot execute that plan without additional 
funds.
    We simply must improve modernization funding for our aviation and 
ground units if we are to sustain a ready, capable Corps in the next 
century. If we do not, today's modernization concerns will become 
tomorrow's readiness dilemmas.
    Air Force Answer. The FY99 President's Budget (PB) balances the Air 
Force goals of keeping people first, sustaining readiness, and securing 
time-phased modernization. The current Air Force modernization funding 
level within the Fiscal Year 1999 PB supports both Air Force goals and 
DoD's $60 billion procurement goal for Fiscal Year 2001.
    Question. Does your budget sustain your modernization efforts in 
the outyears? If not, what are the shortfalls?
    Army Answer. Yes, an increase of approximately $1,000,000,000 is 
realized each year throughout the Future Years Defense Program. The 
momentum will be continued through the outyears.
    Navy Answer. Our major modernization programs are on track. We 
constantly monitor and assess our readiness to determine the right 
fiscal balance among operations, modernization, and recapitalization 
accounts. The Navy's overall resources trend is projected to remain 
flat across the FYDP. Within these resources we are faced with four 
significant challenges: adequately funding current operations and 
forward deployed readiness levels, protecting quality of life 
initiatives for our sailors, modernizing existing assets, and procuring 
new platforms to recapitalize. Successfully meeting these challenges 
will depend on an ability to change the balance between warfighting 
forces and the activities that support them. The specific efficiencies 
proposed in the budget will be insufficient to fully reduce costs to 
the level necessary to overcome all these challenges. Congressional 
support and authority for further base closures is required so that we 
may eliminate excess overhead and use the savings to modernize and 
recapitalize the Navy.
    Marine Corps Answer. Over the last several years, topline 
constraints have forced us to make tough decisions in striking a 
balance between readiness, quality of life, and force modernization. 
For some time now, financing our top priority, near-term readiness has 
come at the expense of future modernization. There is an urgent and 
immediate need to modernize equipment for our ground and aviation 
units. If additional funds became available, I would accelerate 
procurement of several important ground and aviation programs.
    The FY 1999 request for procurement of ground equipment and 
ammunition is approximately fifty percent above the level appropriated 
for Fiscal Year 1998, allowing for the start of recapitalization of 
critical Fleet Marine Force equipment that is approaching the end of 
its useful life, as well as replacement of aging equipment with new, 
more capable equipment such as:
    --Lightweight 155mm Howitzer, the replacement for our almost 20-
year old, well-worn M-198 Howitzer;
    --Medium Tactical Vehicle Replacement (LTVR), a lightweight truck 
fleet upgrade for our almost 20-year old 5-ton trucks;
    --Light Tactical Vehicle Replacement (MTVR), a lightweight truck 
fleet upgrade for our aging HMMWV;
    --Jaevlin, our medium range, man-portable antitank weapon;
    --procurement of our short range anti-armor weapon, Predator; and,
    --upgrades to our C4I systems--to provide better, more reliable, 
more secure and more joint compatible C4 capability.
    While this budget initiates a reversal of the past years' 
historically low levels of ground equipment modernization funding, the 
FY 1999 level is still considerably below our historical average of 
$1.2 billion. Assuming no change in topline, the Marine Corps begins to 
approach that level in the outyears. It is essential to note, however, 
that it will take a long time to recover from the cumulative effects of 
low procurement levels necessitated during the budget deficit recovery 
years, and that while the projected levels in the outyears will allow 
for acceleration of procurement of some of our ground equipment, it 
will not fully satisfy Marine Corps requirements.
    Marine Corps equipment is aging and in many cases has exceeded its 
useful life. Maintenance costs are increasing and our Marines are 
working longer and longer hours to maintain aging equipment. The more 
time and money we spend on repairing equipment, the less we have to 
train Marines. We simply must maintain the increased levels of 
modernization funding we begin to see in the outyears if we are to 
sustain a ready, capable Corps in the next century. If we do not, 
today's modernization concerns will become tomorrow's readiness 
dilemmas.
    The situation is much the same for modernization in the area of 
aviation. Our CH-46E Sea Knight was first introduced to the fleet in 
the mid 1960's, and has an average age of over 30 years. Our CH-53D, 
which is also approaching 30 years of age, has exceeded its original 
projected life by seven to ten years, and our fleet of KC-130Fs is 
approaching 40 years of age, almost twice the original projected life. 
The V-22, replacement for our CH-53Ds and CH-46Es, was accelerated by 
the QDR, allowing us to procure 11 more aircraft within the FYDP than 
originally planned, however, we need to ramp up to the maximum 
economical rate of production as soon as possible after completion of 
the test phase. This budget allows for the necessary research and 
development to upgrade our UH1Ns and AH1Ws, however, actual procurement 
does not begin until FY 2002.
    Air Force Answer. The fiscal year 1999 President's Budget (PB) 
reflects a balanced and time-phased Air Force modernization plan for 
current and future readiness. Our efforts to streamline the acquisition 
process have helped us to achieve this result within a flat budget 
environment. However, acquisition reform initiatives alone will not be 
enough to fuel our modernization program. We must also undertake 
efforts to reduce the cost of the defense infrastructure if we are to 
achieve our modernization goals efficiently.
    Question. What are your top modernization programs? Are they fully 
funded in the fiscal year 1999 budget request and in the outyears? If 
not, what are the shortfalls?
    Army Answer. The Army's goal of digitizing a Division by fiscal 
year 2000 and Corps by 2004 is our top initiative. Our digitization 
efforts include the ongoing modernization efforts of approximately 97 
systems encompassing 538 budget lines. The total estimate of the 
digitization effort is $2,600,000,000 in fiscal year 1999. The Army did 
not take this $2,600,000,000 from programs to create a new effort. It 
was already part of the Army Total Obligation Authority that was 
allotted to these many existing programs. Of this total, approximately 
$261,000,000 was added to digitization by Office of the Secretary of 
Defense for fiscal year 1999. The $261,000,000 provides for improved 
interoperability, increased integration, improved security, network 
management, and more robust common architectures. It is key to the 
horizontal efforts that go across these systems.
    Crusader and Comanche are the two major weapons systems programs 
that continue development of new platforms.
    Other top Army's dollar value modernization programs in the 
President's fiscal year 1999 budget are the Longbow Apache helicopter, 
the Abrams tank, and the Army Tactical Missile System/Brilliant Anti-
Armor Submunition. During the Future Years Defense Program (2000-2005), 
we will spend approximately $10,400,000,000 on those systems.
    Navy Answer. We have forwarded a plan for accelerated procurement 
of CVN 77, which will be the first new carrier of the 21st Century 
which will provide a vital bridge to our next generation carrier, CVX. 
The F/A-18 E/F Super Hornet promises a great future for carrier-based 
aviation. The Joint Strike Fighter is an integral part of our forward-
looking plan for naval aviation. The Surface Combatant 21 family, led 
by the multipurpose DD 21, with its focus on land attack, will help 
revolutionize the Navy's shipbuilding and warfighting strategy. Another 
exciting program we continue to develop is the Theater Ballistic 
Missile Defense capability that is embedded in our Aegis cruisers and 
destroyers. Our shipbuilding plan overall produces technologically 
superior ships such as DDG 51, LPD 17 and the New Attack Submarine. The 
average rate of production in the Future Years Defense Program (FYDP) 
is adequate in the near term to support the projected Fiscal Year 2003 
force of about 300 ships. However, beyond the FYDP, this rate of 
production will not permit us to maintain the required ship and 
aircraft inventory.
    Marine Corps Answer. For some time now, the Marine Corps has been 
financing its top priority, near-term readiness, at the expense of 
future modernization. There is an urgent and immediate need to 
modernize equipment for our ground forces and aviation units.
    While the fiscal year request for procurement of ground equipment 
initiates an upward ramp, allowing for the start of recapitalization of 
critical Fleet Marine Force equipment that is approaching the end of 
its useful life, as well as replacement of aging equipment with new, 
more capable equipment, the fiscal year 1999 levels is still 
approximately $500 million below our historical average of $1.2 
billion. Assuming no change in our topline, we begin to approach that 
level in the outyears; however, it is essential to note that it will 
take a long time to recover from the cumulative effects of low 
procurement levels necessitated during the budget deficit recovery 
years. We simply must increase ground equipment procurement funding if 
we are to sustain a ready, capable Corps in the next century. If we do 
not, today's modernization concerns will become tomorrow's readiness 
dilemmas.
    The situation is much the same for modernization in the area of 
aviation. Our CH-46E Sea Knight was first introduced to the fleet in 
the mid 1960's, and has an average age of over 30 years. Our CH-53D, 
which is also approaching 30 years of age, has exceeded its original 
projected life by seven to ten years, and our fleet of KC-130Fs is 
approaching 40 years of age, almost twice the original projected life. 
The V-22, replacement for our CH-53Ds and CH-46Es, was accelerated by 
the QDR, allowing us to procure 11 more within the FYDP than originally 
planned, however, we need to ramp up to the maximum economical rate of 
production as soon as possible after completion of the test phase. This 
budget allows for the necessary research and development to upgrade our 
UH1Ns and AH1Ws, however, actual procurement of this critical upgrade 
does not begin until fiscal year 2002.
    We have used many approaches to mitigate the impact of these 
shortfalls. We have aggressively pursued improved business practices, 
bought used items like recapped tires instead of new ones, and 
remanufactured major aviation end items such as the AV-8B and the AH1W/
UH1N. We are pursuing the most cost effective options to replacing our 
aging fleet of ground equipment including the five-ton truck, the 
HMMWV, and the howitzer, and we have supported the QDR recommendation 
for reductions in our active and reserve force structure in order to 
free up funds for needed modernization. I believe that we have a 
cogent, common-sense approach to obtain a 21st century Marine Corps 
that will be effective, efficient, and affordable but we cannot execute 
that plan without additional funds.
    Following is a list of our highest priority ground and aviation 
programs where we could use additional funding in fiscal year 1999. 
Each of these programs is currently financed in the budget or the 
accompanying FYDP but could be accelerated should additional funds 
become available. Please note however, that we have worked hard to 
intricately balance our request within the constraints of the 
President's Budget, and unless funds are available in addition to the 
present topline, we feel there is no better allocation of funds within 
Marine Corps accounts than that reflected in our budget request.

------------------------------------------------------------------------
                                                             (Dollars in
            APPN                         Program              millions)
------------------------------------------------------------------------
Aviation:
    APN.....................  MV-22 (1 Aircraft)...........        $78.0
    APN.....................  AV-8B (2 Aircraft + spares)..         43.1
    RDT&E,N.................  AV-8B Advanced Targeting FLIR         25.9
    APN.....................  CH-53E Night Vision System            30.0
                               ``B'' Kits.
    APN.....................  AV-8B A/C Mods (ALR-67                 2.3
                               Antenna).
    APN.....................  AH-1W Night Targeting System.         11.0
Ground:
    PMC.....................  Base Telecomm Infrastructure.         64.1
    PMC.....................  Light Tactical Vehicle                37.0
                               Replacement.
    PMC.....................  Mod Kits Tracked Vehicles....          4.6
    PMC.....................  Y2K Compliance/Computer               20.0
                               Replacement.
    RDT&E,N.................  Marine Corps Warfighting Lab.         10.0
    RDT&E,N.................  LW155 Howitzer...............          6.8
    RDT&E,N.................  Predator/SRAW................          4.0
    RDT&E,N.................  AAAV.........................          5.0
------------------------------------------------------------------------


    Air Force Answer. The fiscal year 1999 President's Budget (PB) 
allows us to modernize without sacrificing current readiness or 
creating outyear funding spikes in funding requirements. While no 
program is fully funded to achieve maximum efficiency, no program 
submitted in the fiscal year 1999 PB contains shortfalls. Individual 
programs are not ranked within the PB, however, some key programs 
within our core competencies are:
     Global Mobility: C-17
     Gl Attack: B-1 Conventional Munitions Upgrade Program and 
Defensive Systems Upgrade Program
     Precision Engagement: Procuring over 75,000 Precision 
Guided Munitions (Joint Direct Attack Munition, Sensor Fuzed Weapon, 
Wind Corrected Munition Dispenser, Joint Stand-Off Weapon, and Joint 
Air to Surface Standoff Missile); Joint Strike Fighter development
     Air and Space Superiority: F-22 Engineering and 
Manufacturing Development (EMD); Airborne Laser development; Space 
Based Infrared System EMD; Evolved Expendable Launch Vehicle EMD
     Information Superiority: Global Broadcast System
    Question. Are you concerned that near-term readiness is funded at 
the expense of long-term readiness? If so, what programs concern you 
the most? How would you reduce that risk?
    Army Answer. Our primary concern is balance. The Army must receive 
adequate and predictable funding to sustain its full spectrum 
capabilities and ensure our Nation remains versatile, flexible, and 
credible in response to crises around the world. Maintaining the 
delicate balance between requirements and resources is increasingly 
difficult. Funding must be adequate, sustained, predictable, and 
synchronized to meet the readiness, force structure and endstrength, 
quality of life, and modernization requirements of today and an 
uncertain future. With 13 consecutive real declines in Army budgets 
from 1985 to 1998, the Army has had to assume risk in certain areas and 
make tough choices to balance requirements with risks. Even with a 
marginal increase in fiscal year 1999, the Army must assume prudent 
risks in a number of areas. All Army requirements must vie for steadily 
decreasing resources in a world of steadily increasing operational 
requirements and uncertainty. Balance reduces both near- and long-term 
risk to the extent possible without any increases in resources. We are 
counting on achieving efficiencies to help mitigate the risk to current 
readiness. We must closely monitor our progress in these and to the 
extent that we lose buying power increases our risk to current 
readiness. We will closely monitor our Army unit readiness 
contributors, such as base operations, real property maintenance, and 
Army training, to maintain current readiness while preserving our 
future modernization activities.
    Navy Answer. In the near term, readiness is adequately funded. 
However, in the long term, the Navy is faced with significant 
challenges: modernizing existing assets and procuring new platforms to 
recapitalize in order to remain the premier Naval power of the world. 
Successfully meeting these challenges will be dependent on an ability 
to change the balance between warfighting forces and the activities 
that support them. We must continue to shed excess infrastructure, 
become more efficient in the manner in which we operate and support our 
forces, and make a larger proportion of funds available to support 
needed investments for long term readiness. The specific efficiencies 
proposed in the budget will be insufficient to fully reduce costs to 
the level necessary to overcome all these challenges. Congressional 
support and authority is requested for further base closures so that we 
may eliminate excess overhead and use the savings to modernize and 
recapitalize your Navy.
    Marine Corps Answer. Yes, I am concerned that near-term readiness 
is funded at the expense of long-term readiness. Over the last several 
years, topline constraints have forced us to make tough decisions in 
striking a balance between readiness, quality of life, and force 
modernization. For some time now, financing our top priority, near-term 
readiness, has come at the expense of future modernization. There is an 
urgent and immediate need to modernize equipment for our ground forces 
and aviation units.
    While the fiscal year 1999 request for procurement of ground 
equipment and ammunition is approximately fifty percent above the level 
appropriated for fiscal year 1998, allowing for the start of 
recapitalization of critical Fleet Marine Force equipment that is 
approaching the end of its useful life, as well as replacement of aging 
equipment with new, more capable equipment, the fiscal year 1999 level 
is still approximately $500 million below our historical average of 
$1.2 billion. Assuming no change is our topline, we begin to approach 
that level in the outyears; however, it is essential to note that it 
will take a long time to recover from the cumulative effects of low 
procurement levels necessitated during the budget deficit recovery 
years. We simply must increase ground equipment procurement funding if 
we are to sustain a ready, capable Corps in the next century. If we do 
not, today's modernization concerns will become tomorrow's readiness 
dilemmas.
    The situation is much the same for modernization in the area of 
aviation. Our CH-46E Sea Knight was first introduced to the fleet in 
the mid 1960's, and has an average age of over 30 years. Our CH-53D, 
which is also approaching 30 years of age, has exceeded its original 
projected life by seven to ten years, and our fleet of KC-130Fs is 
approaching 40 years of age, almost twice the original projected life. 
The V-22, replacement for our CH-53Ds and CH-46Es, was accelerated by 
the QDR, allowing us to procure 11 more within the FYDP than originally 
planned, however, we need to ramp up to the maximum economical rate of 
production as soon as possible after completion of the test phase. This 
budget allows for the necessary research and development to upgrade our 
UH1Ns and AH1Ws, however, actual procurement of this critical upgrade 
does not begin until fiscal year 2002.
    While I remain committed to fully financing our operating forces, I 
am concerned about trends in maintenance of our equipment which can 
impact readiness and quality life. High operational tempo and aging 
equipment have caused dramatic increases in the cost to maintain our 
equipment, both in terms of parts and manhours. The solution to this 
problem is replacement of our aging equipment.
    In terms of infrastructure, I am concerned about the maintenance of 
our bases and stations and about the continued underfunding of our 
military construction and family housing accounts. Funding in each of 
these areas remains austere, and under existing topline constraints, 
does no more than minimize the deterioration of our facilities. In 
spite of efforts to contain it, our backlog of maintenance and repair 
grows by approximately $60 million each year and exceeds $1 billion by 
fiscal year 2003, far exceeding the Marine Corps goal of $100 million 
by fiscal year 2010.
    In the area of military construction, our goal is to replace 
physical plant every 100 years by investing one percent of plant value 
in new construction. The Marine Corps budget as currently structured, 
provides for replacement of physical plant well in excess of every 150 
years.
    Additionally, we have a family housing deficit of approximately 
10,000 units. At projected funding levels, using traditional military 
construction methods, we will make little, if any progress toward 
elimination of this deficit. We are, however, using our limited 
resources to revitalize existing housing units and we are pursuing 
Public/Private Ventures (PPV) where feasible. If proposed PPV 
initiatives are successful, the 10,000 unit deficit should be 
eliminated by fiscal year 2034.
    We have used many approaches to mitigate the impact of these 
shortfalls. We have aggressively pursued improved business practices, 
bought used items like recapped tires instead of new ones, and 
remanufactured major aviation end items such as the AV-8B and the AH1W/
UH1N. We are pursuing the most cost effective options to replacing our 
aging fleet of ground equipment including the five-ton truck, the 
HMMWV, and the howitzer, and we have supported the QDR recommendation 
for reductions in our active and reserve force structure in order to 
free up funds for needed modernization. I believe that we have a 
cogent, common-sense approach to obtain a 21st century Marine Corps 
that will be effective, efficient, and affordable but we cannot execute 
that plan without additional funds.
    That said, please allow me to make two additional points. It is 
critical to the Marine Corps and to the Department of Defense that the 
supplemental request be funded ``above the line.'' Additionally, we 
have worked hard to intricately balance our request within the 
constraints of the President's Budget, and unless funds are available 
in addition to the present topline, we feel there is no better 
allocation of funds within Marine Corps accounts than that reflected in 
our budget request.
    Air Force Answer. The Air Force recognizes the necessity to balance 
near-term readiness against future readiness to ensure the ability to 
meet national security requirements. The FY99-03 program supports Air 
Force goals--people first, sustain readiness, and protect time-phased 
modernization. The Air Force budget is delicately balanced, with each 
of the goals linked to the others. The Air Force has increased funding 
for modernization programs as much as possible while still retaining a 
balanced Air Force.
    We are, however, concerned about contingency funding. Current 
readiness requirements could have an impact on our modernization plan, 
particularly contingency events and their drain on current operational 
accounts. Without supplemental funding to cover contingency operations 
in Southwest Asia and the Balkans, all programs are at risk for 
reprioritization. Supplemental funding gives us the best chance of 
maintaining a balance across all current accounts, as well as 
protecting future readiness and capability.
    In order to reduce the risk in a constrained budget environment, 
the Air Force must time-phase its modernization and carefully monitor 
impacts of current events on future readiness. But the solution is not 
limited to a focus on near-term vs. far-term readiness. The Air Force 
is burdened with excess infrastructure. Relief from this burden through 
additional base closures is needed to maintain an appropriate balance 
between people, readiness, and modernization programs.

                        Reprogramming O&M Funds

    Question. Could you explain to the Committee the importance of 
reprogrammings in the Operation and Maintenance (O&M) account to 
maintaining readiness?
    Army Answer. We provide O&M funding to our field commanders to 
perform their assigned missions. This funding covers readiness which is 
composed of three basic components: operating tempo (OPTEMPO), base 
operations, and real property maintenance. We fund OPTEMPO at 100 
percent of requirements to clearly articulate to the commanders the 
importance of their responsibility to remain trained and ready. Due to 
affordability, we are unable to fully fund the other components of 
readiness and expect field commanders to adjust their funding to ensure 
they can accomplish their missions. When the O&M budget is extremely 
tight, as it was in fiscal year 1998, and we expect it to be in fiscal 
year 1999, any decrements to the plan will throw off this delicate 
balance. The commanders then must migrate money to where it is most 
critically needed to allow them to remain trained and ready. 
Reprogramming allows the commanders the flexibility necessary to ensure 
all three components of readiness remain adequately funded while 
enabling the commander to react to emergent requirements.
    Navy Answer. The ability to reprogram funds within the Operation 
and Maintenance accounts is essential to ensure readiness can be 
maintained in a dynamic environment. It is crucial for the field 
commander's ability to respond to emergent requirements and CINC 
operations.
    From an operational standpoint, the ability to reprogram funds 
precludes potential stand down of essential installation activities 
while the commander awaits approval to transfer resources within the 
total provided for the fiscal year. For example, in FY 1997 because 
spare parts were being used at a higher rate than budgeted, the Navy 
realigned funds internally to avoid grounding aircraft and prevent 
readiness degradation. Under the current reprogramming requirements, 
the Navy would have to significantly reduce flying hour training 
activities pending receipt of the necessary approvals.
    Additionally, many times during a fiscal year, the CINCs must 
engage in the quick planning and execution of an emergent requirement 
such as experienced this fiscal year with increased operating tempo to 
support contingency operations. These activities typically require 
immediate action by the CINC and/or the Joint Chiefs of Staff and the 
Secretary of Defense in ordering the action, and by the Military 
Departments in finding resources necessary to undertake this unbudgeted 
operation. In executing these orders, funding sources must play a 
secondary role to the protection of life, limb and physical assets. The 
current funding constraints and reprogramming requirements are an 
impediment to timely action by the Secretary, Chairman, or CINC to 
fulfill the Department's responsibilities.
    Marine Corps Answer. The reprogramming restrictions, within the O&M 
appropriation that require Congressional approval are: Moves of $15 
million or more to or from a Budget Activity; Moves of $15 million or 
more to or from Operating Forces; Moves of $15 million or more to or 
from Depot Maintenance. Moves of $15 million or more to or from 
Maintenance of Real Property require Congressional notification. These 
restrictions have been imposed to improve Congressional oversight of 
these accounts and to help insure that O&M funds are expended in 
accordance with Congressional intent. Historically, the Marine Corps 
has executed the O&M appropriation in accordance with Congressional 
intent.
    The ability to reprogram within the appropriation is very 
important. This ability allows local commanders the flexibility to 
respond to and deal with emergent issues. In the recent past, the 
Marine Corps has dealt with hurricane damage, flood damage, contingency 
operations and an increasingly difficult recruiting atmosphere.
    The reprogramming restrictions in place for FY 1998 could impede 
timely execution of programs approved by the Congress and the ability 
to react to emergent requirements. In order to ensure Congressional 
limitations are not breached, Marine Corps commands may not realign any 
funding without the approval of Headquarters.
    Air Force Answer. The Air Force O&M Budget is carefully balanced to 
protect readiness. The O&M appropriations include a myriad of competing 
interdependent requirements that must be balanced within constrained 
fiscal limitations. Air Force operational commanders are charged with 
maintaining ready, trained forces within available funding; therefore, 
the Department's philosophy has been to decentralize financial 
resources to the commanders who have the responsibility for day-to-day 
operational decisions. Our wing commanders realign funds (within 
current reprogramming parameters) to meet their day-to-day mission 
requirements. The most efficient way they can react to changes such as 
emergency contingency operations, training or deployment requirements, 
or unforeseen base infrastructure needs such as environmental or real 
property requirements is to have the flexibility to realign available 
O&M funding.
    Question. The Committee is aware that the Senior Readiness 
Oversight Council recently met concerning the development of the 
reprogramming baseline for the Operation and Maintenance accounts in 
fiscal year 1998. What was the outcome of that meeting?
    Navy Answer. The response was favorable. With the endorsement of 
the Senior Readiness Oversight Council, coordinated briefings by all 
the Military Departments were provided to all Defense committee staffs 
in February and March 1998. The benefit of this dialogue was mutual in 
that the Committee staffs realized a greater appreciation for the 
impact of undistributed Congressional adjustments while the Military 
Departments were provided specific insights to Congressional Readiness 
concerns.
    Marine Corps Answer. For the Marine Corps, the calculation of the 
baseline was briefed and accepted without comment or question. Proposed 
realignments within the O&M appropriation are within approval threshold 
and within Congressional intent.
    Air Force Answer. The Senior Readiness Oversight Council met and 
concurred with the Air Force recommendation to set the fiscal year 1998 
baseline within the Operation and Maintenance appropriation.
    Question. Gentlemen, the Committee is aware that Department of 
Defense has significantly changed the Operation and Maintenance funding 
allocations compared to the allocations expressed in the Fiscal Year 
1998 National Defense Appropriations Act. Could you explain the 
adjustments that your services have made to the allocation of Operation 
and Maintenance funds?
    Army Answer. The most significant adjustments were from ground 
operating tempo (OPTEMPO) and real property maintenance to base support 
and land forces readiness. The adjustments were required to fund 
critical programs which were short of funds. This includes additional 
Active component support for the Reserve components training program 
and Force XXI initiatives, as well as across the board activities in 
base support. The impact on OPTEMPO was to reduce our program to 650 
miles, which we are watching closely to ensure we maintain readiness. 
One area where we did limit adjustments was in depot maintenance, and 
it was primarily left intact.
    Navy Answer. Quadrennial Defense Review (QDR) decisions subsequent 
to the submission of the Fiscal Year 1998 President's budget coupled 
with the application of Congressional undistributed adjustments 
provided for a net realignment of about $100 million among the budget 
activities. The allocation adjustments were made in concert with QDR 
decisions and to make executable those programs severely impacted by 
undistributed Congressional reductions.
    Marine Corps Answer. The Marine Corps has made few realignments. We 
believe all were within Congressional intent and authorized parameters. 
The realignments that we have identified were primarily 
reclassifications of costs or reflecting a decision to centralize 
funding of a program vice the originally planned decentralization 
(i.e., outsourcing and privatization investment costs).
    Air Force Answer. The Air Force distributed all Congressional marks 
as directed in the Appropriation Bill. Historically, we make several 
adjustments to the allocations to meet the full intent of the Congress 
and to balance the program for fact-of-life changes based on inputs 
from our field commanders. The most significant adjustment in fiscal 
year 1998 was the realignment of $224 million of the contingency mark 
(provided in one budget activity) to each budget activity where 
contingencies were actually programmed and expected to occur. In 
addition, we made several smaller fact-of-life adjustments based on 
emerging requirements to preclude us from taking draconian actions 
against programs with limited flexibility.
    Question. The Committee is aware that revised allocations have 
effectively reduced the amount of funding available for readiness 
related training, depot maintenance, and real property maintenance. 
What fact of life adjustments, or emergent service priorities, have you 
funded at the expense of those accounts that fund activities directly 
related to maintaining readiness?
    Army Answer. The major adjustments included adding funds to the 
Active component support for the Reserve components training program to 
bring it to a minimal level of funding; to the Korean Battle Simulation 
Center to ensure funding of planned requirements in this critical 
theatre; to Force XXI initiatives; to base support activities to 
prevent them from falling below barely adequate funded levels; and to 
recruiting and advertising to help meet near term accession goals.
    Navy Answer. Funds were reduced from ship depot maintenance and 
intermediate maintenance in a accordance with Quadrennial Defense 
Review decisions. Funds were added to ship inactivations and readiness 
areas such as ship operations, recruiting, and training.
    Marine Corps Answer. The Marine Corps has made no realignments from 
the identified readiness categories (i.e., the Activity Groups/Sub-
Activity Groups (AG/SAGs) for Operating Force, Depot Maintenance and 
Maintenance of Real Property) to fund emergent issues in other AG/SAGs. 
Marine Corps operating force commanders have made individual 
realignments from unit training to unit maintenance within the 
Operating Forces funding amounts to deal with emergent issues.
    Air Force Answer. Fact of life changes to the program were based on 
emerging requirements identified by our field commanders, including 
increased pilot production to mitigate our current shortfall and the C-
130 infrastructure funding transfer. Realignments after the 
Appropriation Act allocations were necessary to rebalance operations 
and maintenance across all programs while still allowing us to perform 
readiness-related training, depot maintenance and real property 
maintenance activities.
    Question. The Committee understands that there is an annual 
migration of funds from readiness related accounts into base operations 
support. Why? Is it your view that the Department systematically 
underfunds facilities and support activities?
    Army Answer. We provide Operation and Maintenance (O&M) funding to 
our field commanders to perform their assigned missions. This funding 
covers readiness, which is composed primarily of operating tempo 
(OPTEMPO), and includes base operations and real property maintenance 
(RPM) dollars. We fund OPTEMPO at 100 percent of requirements to 
clearly articulate to commanders the importance of the responsibility 
to remain trained and ready. Due to affordability, we are unable to 
fund full the other components of readiness. Nonetheless, we built a 
balanced fiscal year 1999 budget that fully funds OPTEMPO and funds 
Base Operations and RPM at an acceptable level of risk.
    When the O&M budget is extremely tight, as it was in fiscal year 
1998 and we expect it to be fiscal year 1999, any decrements to the 
plan (and/or new requirements) can upset this delicate balance. Facing 
tight budgets and decrements to the plan, field commanders then migrate 
funds from OPTEMPO accounts to pay congressional bills, ``must fund'' 
bills, base support shortfalls. To avoid breaking minimally funded 
programs, commanders must accept increased training risk by paying 
bills with OPTEMPO funds--their only flexible source.
    Navy Answer. The Department does not systemically underfund 
facilities and support activities. Nor is there an annual migration of 
readiness funds to the base operations accounts. Our base support costs 
are reflected in the budget submission to Congress and represent the 
minimum funds necessary to sustain daily operations of bases and 
stations and provide essential support for quality of life programs. 
Sometimes this minimum funding is adjusted as a consequence of 
Congressional action. When adjustments unacceptably impact execution of 
the program, we realign resources to meet the must fund requirements.
    This pattern of adjustment and realignment continued with the FY 
1998 appropriation and was addressed to the Senior Readiness Oversight 
Council and included in the briefings provided the Defense Committee 
staffs.
    Marine Corps Answer. The Marines Corps has historically not 
realigned funding from the O&M ``readiness accounts,'' primarily 
support for the operating forces, into base operations. We have made a 
deliberate effort in both programming and budget to fund readiness and 
quality of life accounts at sustainable levels and maintained this 
resolve through budget execution.
    Air Force Answer. The Air Force operations and maintenance budget 
maintains a delicate balance between readiness and quality of life 
within a constrained topline. While efficiencies and constraints 
continue in the Fiscal Year 1998 budget, the Air Force does not 
systematically underfund facilities and support activities. Commanders 
must have flexibility to accomplish readiness objectives within a 
constrained fiscal environment while at the same time meeting the 
emerging requirements. More and more, we have challenged our commanders 
to achieve readiness objectives while forcing them to cash flow issues 
for increased contingency requirements, natural disasters, and other 
real world events. Commanders must have the flexibility to ensure 
readiness is maintained while taking care of people and responding to 
myriad situations on a daily basis.

                     The Readiness Reporting System

    Question. Several different measures of training operations, the 
state of Department of Defense (DoD) equipment, and trends in military 
personnel suggest a decline in readiness. The Army reports that actual 
training operating tempo (OPTEMPO) will be nearly 25 percent below the 
Army goal in 1998; there appears to be an across the board problem in 
DoD with aviation mission capable rates; and all the services have 
noted recruiting and retention problems. It is not clear whether these 
problems will result in degradation of the reported readiness of U.S. 
forces under the current reporting system. Gentlemen, please explain to 
the Committee the indices the DoD currently uses to measure readiness.
    Army Answer. The Army employs the Joint Staff designed system known 
by the acronym ``SORTS'' for ``Status of Resources and Training 
System'' for individual unit status reporting. This system enables 
assessment of the current and planned distribution of resources within 
the organization designed to fulfill the requirements of the National 
Military Strategy.
    As much as possible, readiness assessments are based on 
quantifiable, objective measurement criteria, such as available 
personnel strengths, equipment fill rates, and specific training 
requirements. ``Personnel'' includes three subsets measures against the 
reporting unit's required personnel strengths; ``Equipment on Hand'' 
measures equipment on hand against equipment authorized; ``Equipment 
Serviceability'' measures how well ``on hand'' equipment is maintained; 
and ``Training'' is based on a commander's estimate of the number of 
training days required in order for the unit to be fully capable of 
performing the unit's mission essential tasks.
    In addition, commanders provide official comments in the Unit 
Status Report that address the availability of other training 
resources, such as fuel, ammunition, training areas, and funds, and any 
readiness perspective they consider important to communicate to the 
Army's senior leadership.
    Navy Answer. The Navy uses a variety of indices to determine unit 
level readiness such as the availability of people, training 
proficiency, material condition and operational availability of our 
ships and aircraft. Additionally, the Navy monitors other indices which 
measure the adequacy of resources from an overall perspective. Such 
indices include spare parts availability, aircraft and engine depot 
support as well as personnel accession, quality, and stability.
    Our readiness metrics have proven reliable in identifying 
deficiencies and we have been quick in taking corrective action when 
necessary. By continually expanding and improving our readiness 
measurements, we strive to enhance our detection capability and prevent 
readiness degradation before it occurs.
    Marine Corps Answer. The Marine Corps uses the Joint Staff directed 
Status of Resources and Training System (SORTS) as its first level 
index to look at unit readiness. SORTS provides the broad overview 
common to all the Services. Problems and trends noted in units' SORTS 
reports are regularly cross-checked or reviewed in greater detail using 
other commodity area systems. Some of the other indices used are:
    (1) Unit Activity and DepTempo: Marine Corps Training Exercise 
Employment Plan (MCTEEP). MCTEEP is a software program which provides 
data on unit deployment training and exercises activities entered by 
battalion/ squadron level units. The data contained in MCTEEP details 
deployment and exercise dates, times, numbers of participating 
personnel and costs. Deployment Tempo (DEPTEMPO), the Marine Corps' 
standard method for tracking unit time away from home station can also 
be calculated with proper data entry. Training remains the most 
subjective area of readiness reporting, particularly with respect to 
ground units.
    (2) Manpower: Marine Corps Total Force System (MCTFS). Data from 
the MCTFS, which spans active and reserve pay and personnel records, is 
used to establish a measure of ``health'' of both units and MOSs. By 
``health'', we mean a unit's strength or the assignable strength of a 
particular MOS.
    (3) Aircraft readiness is portrayed in weekly Aircraft Material 
Readiness Reports (AMMRs) which provide aircraft status; numbers of 
mission capable aircraft, maintenance status, aircraft location and 
parts required to complete repairs. When tracked over time and looked 
at in relation to their deployment status and the data contained in the 
Navy's Aviation 3M System, SORTS data can be cross checked.
    (4) Log/Equip. Marine Corps Ground Equipment Readiness Report 
(MCGERR), a command information system which provides equipment status 
by unit, location or roll-up throughout the Marine Corps. MCGERR is a 
subsystem of the Marine Corps Asset Tracking Logistics and Supply 
System and Marine Corps Integrated Maintenance Management System 
(ATLASS/MIMMS). ATLASS/MIMMS integrates supply and maintenance 
information to provide asset status and visibility for ground 
equipment. MCGERR retrieves, integrates, and processes the unit 
provided data to:
    Reflect the current status of selected ground equipment authorized 
and possessed by reporting units.
    Provide the identification of MCGERR tracked equipment excesses and 
deficiencies within the reporting unit.
    Provide data for the determination of equipment/supplies on-hand 
``S'' rating and the equipment's operational status ``R'' rating for 
use in SORTS reporting. Additionally, MCGERR provides an overall 
assessment of a unit's total equipment rating for tracking within the 
Marine Corps.
    Air Force Answer. Readiness is an extremely complex combination of 
interrelated factors which can not be easily quantified. OSD uses the 
same indicators and systems to measure readiness that the services use.
    The Status Of Resources and Training System (SORTS) provides an 
overall unit perspective of readiness and is used by all of the 
services in assessing their unit readiness. Units are rated by overall 
C-Level:
    C-1. Unit possesses the required resources and is trained to 
undertake the full wartime mission(s) for which it is organized or 
designed.
    C-2. Unit possesses the required resources and is trained to 
undertake most of the wartime mission(s) for which it is organized or 
designed.
    C-3. Unit possesses the required resources and is trained to 
undertake many, but not all, portions of the wartime mission(s) for 
which it is organized or designed.
    C-4. Unit requires additional resources or training to undertake 
its wartime mission(s), but it may be directed to undertake portions of 
its wartime mission(s) with resources on-hand.
    C-5. Unit is undergoing a Service-directed resource action and is 
not prepared, at this time, to undertake the wartime mission(s) for 
which it is organized or designed. Assign this C-level only if 
authorized by the major command.
    The overall picture of Air Force readiness for our 300-plus combat 
operational units (since January 1996) follows. ------. Additional 
indicators, such as mission capable rates, cannibalization rates, 
retention rates, recruiting, spare parts stocks, deployed days, 
commander's assessments and many others are used to improve the 
fidelity of the SORTS reports. The Chairman's Readiness System, 
consisting of the Joint Monthly Readiness Review (JMRR) and the Senior 
Readiness Oversight Council (SROC) provides aggregate views of the 
ability of joint and combined forces to carry out their assigned 
missions.
    All of these and many more are used when examining the readiness of 
our military forces. The Joint Staff, in coordination with the 
services, has published a Readiness Assessment System (RAS) Business 
Plan. The RAS is an integrated, automated readiness reporting and 
assessment tool capable of addressing the full spectrum of missions 
required by the National Military Strategy.
    Question. What are the relationships between these indices and the 
problems we currently see? How does a decline in training operating 
tempo (OPTEMPO) effect these measures?
    Army Answer. OPTEMPO execution is not a barometer of readiness. 
Readiness is judged by commanders, who are responsible for taking their 
units to war. The commander's readiness evaluation is based on the 
ability of his unit to conduct wartime tasks. This ability is judged on 
the unit's performance in training exercises, which may be live 
training events (which require a substantial OPTEMPO investment), 
virtual training using simulators, or constructive training using 
simulations. A commander develops a training plan using a mix of these 
three training regimes, depending on variables, such as the 
availability of training areas, ammunition, personnel strength, and 
funding. Live training is the most demanding on resources and the 
environment. Any decline in training OPTEMPO can be expected to reduce 
the frequency and size of live training events. Likewise, the diversion 
of OPTEMPO funds to support contingency operations can be expected to 
adversely impact training opportunities. The frequency, size, mix, and 
quality of live, virtual, and constructive training events will all 
factor into a commander's assessment of unit training readiness.
    Navy Answer. Our readiness indices have proven reliable in 
identifying deficiencies when they occur. Reduced training OPTEMPO will 
have an impact on a unit's proficiency while operating within the 
Inter-Deployment Training Cycle (IDTC). Our readiness indices are 
designed to identify the extent of any readiness degradation and we 
have been quick to implement corrective action when necessary.
    Marine Corps Answer. For the Marine Corps, our readiness indices 
give us effective indicators of essential trends we need in order to 
assess readiness at the Service headquarters level. The Marine Corps 
funds and ensures current readiness first, even to the detriment of 
other areas, so we have no major immediate readiness problems, other 
than those that may be caused by the unfunded contingencies and the 
``El Nino'' storm damage already reported.
    Generally, Marine Corps readiness indices show high readiness in 
our forward deployed forces, while those just returned from deployment 
are resourced at lower levels. This is normal and expected from Marine 
units in our time-tested rotational unit deployment cycles. After units 
returned from deployment, personnel transfer and enlistments begin to 
expire; maintenance resource and repair priorities are given to those 
units preparing to deploy. As a unit gets to within three to six months 
of deployment its across the board priorities are raised, new personnel 
arrive and equipment maintenance and repair priorities are raised to 
higher levels. This ensures that units will deploy with the requisite 
number of fully trained personnel and with equipment in a combat ready 
status.
    Our main index, the Status of Resources and Training System 
(SORTS), best represents an aggregate picture from which to gauge unit 
readiness. For the Marine Corps, SORTS is the vehicle from which 
``checks'' are made against other reporting systems utilized. Our SORTS 
ratings are commensurate with the typical level of personnel manning 
levels, fiscal resourcing, and maintenance priority assigned to units 
in our rotational deployment cycle. To reiterate our point, units 
preparing to deploy and deployed show high readiness in SORTS. Those 
units just returning from deployment may exhibit lower readiness 
ratings, until they again prepare to deploy.
    Some of the other readiness indices include:
    (1) Unit Activity and DepTempo: Marine Corps Training Exercise 
Employment Plan (MCTEEP). MCTEEP is a software program which provides 
data on unit deployment training and exercises activities entered by 
battalion/squadron level units. The data contained in MCTEEP details 
deployment and exercise dates times, numbers of participating personnel 
and costs. Deployment Tempo (DEPTEMPO), the Marine Corps' standard 
method for tracking unit time away from home station is also 
calculated.
    (2) Manpower. Marine Corps Total Force System (MCTFS). Data from 
the MCTFS, which spans active and reserve pay and personnel records, is 
used to establish a measure of ``health'' of both units and individual 
MOSs. By ``health'', we mean a unit's strength or the assignable 
strength of a particular MOS.
    (3) Aircraft readiness is portrayed in weekly Aircraft Material 
Readiness Reports (AMMRs) which provide aircraft status; numbers of 
mission capable aircraft, maintenance status, aircraft location and 
parts required to complete repairs. When tracked over time and looked 
at in relation to their deployment status, they portray an excellent 
readiness cross check to SORTS data.
    (4) Log/Equip. Marine Corps Ground Equipment Readiness Report 
(MCGERR), a command information system which provides equipment status 
by unit, location or roll-up throughout the Marine Corps. MCGERR is a 
subsystem of the Marine Corps Asset Tracking Logistics and Supply 
System and Marine Corps Integrated Maintenance Management System 
(ATLASS/MIMMS). ATLASS/NIMMS integrates supply and maintenance 
information to provide asset status and visibility for ground 
equipment. MCGERR retrieves, integrates, and processes the unit 
provided data to:
    Reflect the current status of selected ground equipment authorized 
and possessed by reporting units;
    Provide the identification of MCGERR tracked equipment excesses and 
deficiencies within the reporting unit;
    Provide data for the determination of equipment/supplies on-hand 
``S'' rating and the equipment's operational status ``R'' rating for 
use in SORTS reporting. Additionally, MCGERR provides an overall 
assessment of a unit's equipment capability ``E'' rating for internal 
tracking within the Marine Corps.
    The Marine Corps does not measure Operations Tempo (OPTEMPO), but 
measures Deployment Tempo (DEPTEMPO), because its units train, deploy 
and fight as units, not as individuals. The Marine Corps Training 
Evaluation and Employment Planner (MCTEEP) is the readiness tool the 
Marine Corps uses to measure DEPTEMPO. A decline in DEPTEMPO would be 
identified in the JMRR, SROC and QRRC briefs/reports. Reduced DEPTEMPO 
will also mean less wear and tear on our aging equipment, saving time 
and money and enabling our already taxed Operations and Maintenance 
dollars to go even farther. We would also expect to see a somewhat 
increased readiness level reported by affected units in their SORTS 
reports because of this.
    Air Force Answer. These indicators show us where our readiness 
challenges lie and provide us the opportunity to take corrective 
actions. For example, the recent downturn in retention indicators has 
been addressed in a number of ways, including increased bonuses and 
attempts to alleviate the high TEMPO experienced by our people. 
Sustained improvements in a variety of these indicators should 
ultimately improve overall SORTS readiness levels (i.e., C-level).
    A decrease in training opportunities could result in a loss of 
required skills if it is long-term and widespread. This could show up 
as a decrease in SORTS training indicators, a shortage in trained 
crewmembers at the unit level, or a decrease in mission capable rates 
due to a lack of trained maintenance personnel. Predicting these 
occurrences is very difficult, as each situation is unique and depends 
a great deal on the conditions which caused it.
    Question. It has been widely reported that mission capable rates 
for Navy aircraft are approximately 75%. What effect does the fact that 
you cannot fly 25% of your aircraft have on the reported readiness of 
aviation units under the SORTS system?
    Navy Answer. The material condition of our aircraft is an important 
indicator of near-term readiness and that is why we pay close attention 
to aircraft mission capable (MC) rates. The Department's goal for MC is 
73% and anytime it is not attained, it warrants our attention. The goal 
is 73% because our aircraft must undergo various maintenance and 
inspections to ensure optimum performance and safety is maintained. 
Maintaining this level of mission capable aircraft ensures sufficient 
quantities of aircraft are available to perform the necessary training 
required to meet all operational commitments. If sufficient quantities 
are not available, the SORTS system will identify readiness degradation 
and allow the Navy to take quick corrective action if necessary.
    Marine Corps Answer. Under the current SORTS system, we do not 
downgrade an aviation unit's readiness status from C-1 (capable of 
carrying out all wartime missions) to C-2 (capable of carrying out the 
bulk of wartime missions) until a unit's aircraft MC rate drops below 
75%. This metric has been utilized for many years and has proven to be 
a reliable indicator of our units' material condition readiness and the 
resources required to bring them up to the C-1 level in A/C material 
condition readiness.
    Air Force Answer. Generally speaking, a given mission capable rate 
will only impact a unit's SORTS report if they are unable to undertake 
their wartime mission or if the shortage of aircraft impacts the unit's 
ability to train. Of the aviation units currently reporting reduced 
readiness, approximately one-third (27) list the reason as being 
related to mission capable rates (a lack of spare parts or equipment 
problems).
    Question. Do the current measures assess readiness in terms of 
Department of Defense's ability to meet the two major regional 
contingency scenarios?
    Army Answer. Yes, in accordance with the parameters of the 
Chairman's Readiness System, the Army assesses its ability to 
successfully execute two major theater wars (MTWs) whenever the 
Director of Operations for the Joint Staff, through the Joint Monthly 
Readiness Review (JMRR), directs a two MTW scenario for that quarter's 
JMRR assessment.
    Each quarter, the Joint Staff publishes a notional warfighting 
scenario that includes small scale contingencies (SSC) and/or MTWs to 
be used as a basis for Commanders-in-Chief (CINCs) and service 
assessments. During full JMRRs, the services' operations deputies brief 
the readiness status of major combat units and critical support 
capabilities to the Joint Staff. Additionally, services brief the units 
that are engaged in ongoing operations and which units would engage in 
the warfighting scenario. For the latter, deficiencies in executing the 
warfighting scenario are identified. These JMRR deficiencies are 
categorized in two ways: readiness issues reflect an inability of 
existing forces to fully perform their functions, and capability issues 
usually reflect shortfalls in force structure, which hinder the Army's 
ability to execute required missions at the theater or national-level 
in support of the national strategy. Each concern is addressed. In some 
cases, near-term fixes (within two years) are identified and 
implemented. In other cases, the solution is best addressed through 
programmatic action. In some cases, there is no solution and risk is 
assumed. Overall, this JMRR assessment has been a critical link in 
identifying service and CINC concerns and shortfalls. It takes straight 
readiness data to the next step by applying that data and those units 
to the National Military Strategy in dual-MTW scenarios.
    Navy Answer. Yes. Within the Joint Monthly Readiness Review 
process, each Service, in coordination with the Joint Staff and other 
Services, routinely assess their ability to meet a dual Major Theater 
War (MTW) scenario.
    Marine Corps Answer. Yes, the current measures assess readiness in 
terms of DoD's ability to meet the two major regional contingency 
(MRCs) (now known as major theater war (MTW) scenarios. Each Joint 
Monthly Readiness Review (JMRR) and Senior Readiness Oversight Council 
(SROC) meeting concludes with a summary assessment of DoD ability to 
undertake the two MTW scenarios. Readiness assessments are made by the 
regional CINCs, the Services, the Joint Staff functional areas and the 
Combat Support Agencies.
    Air Force Answer. Yes, the Chairman's Readiness System assesses the 
ability of the Armed Forces to respond to the two major theater war 
scenario along with a variety of other scenarios.
    Question. What measures are being taken to improve readiness 
measurement?
    Army Answer. The Army's training, maintenance, and support 
resourcing mechanisms are the target of the most significant upgrades 
to our readiness reporting system. The current operating tempo systems 
generates requirements for fuel, repair parts, depot-level repairs, and 
some recurring operating costs based on event-driven training 
requirement models, but is not directly linked to unit readiness 
reporting. Operational Readiness (OPRED) is a new methodology the Army 
is developing to reflect more accurately the total cost of preparing a 
unit for war. OPRED effectively links doctrinal training requirements 
and training and maintenance resourcing to unit training readiness 
ratings. In addition to costs currently captured, it includes other 
associated costs, such as training aids, simulators, ranges, land, 
maintenance, and force projection facilities. In effect, OPRED ties 
together the most critical elements of the Installation Status Report, 
Training Status Report, and the Unit Status Report. The Army is 
currently in the process of rewriting its readiness reporting 
regulation based upon the OPRED concept.
    Navy Answer. The Navy is continually improving and expanding our 
robust readiness measurements. Our most recent efforts have focused on 
our non-deployed forces where readiness degradation and shortfalls 
would first be observed. Some of the promising new tools under 
development centered on aircraft mission capable rates and ship's 
operating time free of serious casualty reports. In another effort, our 
Federally Funded Research and Development Center, the Center for Naval 
Analyses (CNA), continues to work on a tool which links readiness to 
the quality of our personnel. In this case, we have defined personnel 
quality as a function of length of service, educational status, 
frequency of promotion, percentage demoted, and aptitude category 
status. We are beginning to see relationships between this personnel 
quality index and our achieved readiness. This research is particularly 
encouraging because it reinforces what we believe--that highly skilled, 
motivated Sailors and Marines are key to our readiness.
    Marine Corps Answer. The Marine Corps is working very closely with 
the Joint Staff to improve the SORTS reports to ensure the most timely 
and accurate reports possible as technological advances increase the 
Services' tracking capability.
    At the Service headquarters level, the Marine Corps is using the 
Global On-line Marine Edit and Report System (GOMERS) application to 
ensure an error free formatted SORTS report message is sent directly 
from the battalion/squadron level to the Joint Staff for processing, 
making reports both timely and accurate. We are continuing the use and 
expanding the capabilities of our event tool, the Marine Corps Training 
and Exercise Employment Program (MCTEEP) to better aid units in data 
entry of events, more detailed identification of participating units/
elements and tracking of associated training and exercise costs. 
Additionally, training is provided to over 500 SORTS data handlers by 
Air Education Training Command (AETC) Keesler Air Force Base. AETC 
supports 18 classes per year at seven different bases within the Marine 
Corps. Finally, in addition to updating the SORTS SOP (MCO P3000.13C), 
we periodically publish SORTS advisory messages. These advisories 
emphasize reporting requirements, clarify areas of concern, and assist 
units in report preparation.
    Air Force Answer. We have implemented several improvements in the 
measurement of readiness that include review, oversight and mechanisms 
to correct deficiencies:
     The Joint Monthly Readiness Review is the central 
component of the Chairman's and the Air Force's readiness system. It 
has recently incorporated a deficiency review into the process which 
categorizes all identified deficiencies according to ``risk'' and seeks 
to resolve those most critical to mission success.
     The Senior Readiness Oversight Council brings the senior 
civilian and military leadership together in monthly meetings to review 
significant readiness topics and provide guidance for corrective 
measures.
    We have implemented several initiatives to improve our readiness 
measures:
     Aggressively working to link near-term readiness 
considerations with longer-term programs (through the President's 
Annual Defense Budget).
     Stood up a Readiness Integrated Process Team to 
institutionalize readiness as part of the programming process, 
including investigation and development of predictive readiness 
measurements and analysis.
     Increased the emphasis on the role of the commander's 
assessment to improve the accuracy of the unit's Status of Resources 
and Training System (SORTS) reports.
     Implemented the Ready Aircrew Program for the combat air 
forces which closely relates unit level flying training to a CINC's 
prescribed mission essential task lists.
    The Joint Staff, in coordination with the services, has published a 
Readiness Assessment System (RAS) Business Plan. The RAS is an 
integrated, automated readiness reporting and assessment tool capable 
of addressing the full spectrum of missions required by the National 
Military Strategy.
    Question. The Committee understands that each of you is a member of 
the Senior Readiness Oversight Council (SROC). What is the role of the 
SROC in reviewing the state of current readiness?
    Army Answer. The SROC is the second step in the Chairman's 
Readiness System. They key components of the system are the Joint 
Monthly Readiness Review (JMRR), the SROC, and the Quarterly Readiness 
Report to Congress (QRRC). Each quarter, the Joint Staff publishes a 
notional warfighting scenario that includes small scale contingencies 
and/or Major Theater Wars to be used as a basis for Commanders-in-Chief 
and service assessments. The central component of the assessment 
process is the JMRR. During full JMRRs, the services' operations 
deputies brief to the Joint Staff the readiness status of major combat 
units and critical support capabilities, which units are engaged in 
ongoing operations, and which units would engage in the warfighting 
scenario. For the latter, deficiencies in executing the warfighting 
scenario are identified and categorized either as a readiness or a 
capability shortfall. Each concern is addressed. In some cases, a near-
term fix is identified and implemented. In other cases, the solution is 
best addressed through programmatic action. In some cases, risk is 
assumed. To provide civilian oversight, significant issues raised 
through the JMRR process are used to make a monthly risk assessment 
that is reported to the SROC, chaired by the Deputy Secretary of 
Defense, and attended by the Vice Chairman of the Joint Chiefs of 
Staff, service Chiefs (or service Vice's), service Under Secretaries, 
and key Department of Defense (DoD) civilian leadership. At each Full 
SROC, Service Chiefs brief the current readiness of his forces, the 
ability of his forces to execute that quarter's JMRR scenario, force 
readiness projections out twelve months, deployment tempo, and key 
readiness trends in the area of personnel, training, and equipment. 
These SROC assessments are then reported to Congress in the QRRC not 
later than 30 days after the end of each quarter. The QRRC highlights 
issues discussed in the SROC and provides Congress with an assessment 
of the DoD's ability to execute the National Military Strategy.
    Navy Answer. The Senior Readiness Oversight Council meets monthly 
and discusses a wide range of readiness issues which may affect both 
current and future readiness. With regard to current readiness, much 
like the Joint Monthly Readiness Review (JMRR), each Service, in 
coordination with the Joint Staff and other Services, routinely assess 
their ability to meet a dual Major Theater War (MTW) scenario. 
Additionally, emerging readiness issues are addressed and proposed 
solutions are presented to ensure senior leadership can make informed 
decisions on readiness related issues.
    Marine Corps Answer. The SROC composition consists of the Deputy 
Secretary of Defense, the Vice Chairman of the Joint Chiefs of Staff, 
Under Secretaries of the Departments, the Service Chiefs, and Under 
Secretaries of Defense. While the Service Chiefs are the primary 
members of the SROC, Service Vice Chiefs attend many of the meetings.
    The SROC is designed to bring joint, service and DoD readiness 
concerns under one common forum for open and frank discussion. When 
done in conjunction with a full reporting Joint Monthly Readiness 
Review (JMRR), the Service Chiefs report current and projected service 
status assessment, and service readiness to undertake the JMRR scenario 
within the framework of the National Military Strategy. Other current 
readiness issues are addressed as requested by DoD officials. To 
conclude the meetings, the VCJCS/J-3 provide an overall readiness 
assessment as a summary of DoD's ability to undertake the two MTW 
strategy with a risk evaluation.
    Air Force Answer. The SROC brings the senior civilian and military 
leadership together in monthly meetings to review significant readiness 
topics. The stated objectives of the council are to: advise the 
Secretary and Deputy Secretary of Defense on overall force readiness; 
provide a military perspective on readiness; link near-term readiness 
issues with the budget process; and to alert civilian Department of 
Defense leaders on significant readiness problems.
    At each SROC meeting, the Service Chiefs or their representatives 
provide a current and projected unit status assessment similar in scope 
and form to that provided in the Chairman's Joint Monthly Readiness 
Review (JMRR). The Vice Chairman of the Joint Chiefs of Staff provides 
a joint readiness assessment and an overall assessment of the readiness 
of the Armed Forces to fight and meet the demands of the National 
Military Strategy.
    Question. What is the role of the SROC in improving existing 
readiness measures?
    Army Answer. The Senior Readiness Oversight Council (SROC) does not 
have a direct function in improving existing readiness measures. 
Instead, it takes existing measures and uses the information obtained 
to conduct its assessment in accordance with the quarterly Joint 
Monthly Readiness Review scenarios. The SROC does provide a current and 
projected unit status assessment at the strategic level. The SROC also 
brings the senior civilian and military leadership together in monthly 
meetings to review significant readiness topics.
    Navy Answer. One of the main objectives of the SROC is to bring 
short and long term emerging readiness issues to the attention of 
Senior Leadership. Providing an expanded view of readiness ensures 
senior leadership is informed, facilitates discussion, and enhances 
decisions on readiness related issues.
    By focusing the Service's efforts in these areas, the SROC has 
improved the readiness monitoring process and enhanced the ability to 
take quick corrective action to resolve or avoid readiness degradation.
    Marine Corps Answer. The SROC is designed to bring joint, Service 
and DoD readiness concerns under one common forum for open and frank 
discussion. When done in conjunction with a full reporting Joint 
Monthly Readiness Review (JMRR), the Service Chiefs report current and 
projected Service status assessment, and Service readiness to undertake 
the JMRR scenario within the framework of the National Military 
Strategy. Other current readiness issues are addressed as requested by 
DoD officials. To conclude the meetings, the VCJCS/J-3 provide an 
overall readiness assessment as a summary of DoD's ability to undertake 
the two MTW strategy with a risk evaluation.
    Air Force Answer. The SROC is the highest executive forum for 
readiness-related issues within the Department of Defense. It provides 
guidance and establishes policy for military readiness matters. Key 
among its concerns is the assessment of our military's capability to 
accomplish the full spectrum of missions in the National Military 
Strategy. Many decisions stem from readiness assessments (e.g., 
planning, budgeting, apportionment of forces); therefore, the SROC 
process is designed to provide our military and civilian leaders a 
precise reflection of our military capability.

                Vulnerability of Information Technology

    Question. How do your training exercises prepare your units to 
fight in an environment where their information technology systems may 
be disrupted or completely disabled?
    Army Answer. In response to increased vulnerabilities stemming from 
the growing reliance on computers at every echelon, the Army 
established a permanent Red Team as part of the Land Information 
Warfare Activity (LIWA). The LIWA is the Army's single focal point for 
information operations and provides support to Land Component 
Commanders. The Red Team is a capabilities-based organization that is 
used to portray the full range of cyber threats that could be directed 
against our tactical forces. The Army's intent is to incorporate 
attacks on information systems of our command and control capabilities 
into all exercises.
    Navy Answer. The Navy's policy is to conduct ``Red Team'' 
evaluations against all deploying Carrier Battle Groups (CVBG) and 
Amphibious Ready Groups (ARG) during the Joint Task Force Exercise 
(JTFEX) phase of the CBG/ARG work-ups. These Red Team evaluations 
specifically target information systems and networks and are designed 
to evaluate the CVBG/ARG's ability to function with degraded or 
disrupted systems.
    Marine Corps Answer. As a matter of standard operating procedure, 
Marine units plan and exercise using built-in tiered redundancies in 
their information transmission means. For example, forward deployed 
Marine Expeditionary Units, which must be able to execute contingency 
operations within six hours, train to quickly transition to alternate 
communication means when their primary SHF channels become disrupted. 
Such alternatives include voice traffic reports, data transfer using 
data-burst UHF satellite links and use of commercial INMARSAT channels 
to support their C4I systems, and hand delivery of information. Our 
Marines train in such a manner to expect that they will have to use 
alternate means in any operation. Even as we continue to modernize our 
information technology through the procurement of systems like the 
anti-jam SMART-T EHF satellite radio, Marines will continue to train in 
use of alternative means to transmit information.
    Air Force Answer. Exercises prepare our units to accomplish their 
mission, to face unexpected challenges, recognize disruptions, explore 
options, learn and refine practices, procedures and doctrine, and to 
deal with unforeseen problems while accomplishing their mission. 
Exercises simulate possible wartime conditions, test current technology 
and procedures, and enable us to design and validate our systems' 
ability to counter current and future threats.
    The Air Force is involved in exercises at the Joint, Service and 
major command (MAJCOM) levels that incorporate information technology 
system disruptions or denials. For example, Air Force personnel 
participated in the Joint Chiefs of Staff (JCS) ELIGIBLE RECEIVER 97 
exercise that focused on defensive information warfare and included 
events where information/communications systems were disrupted or 
completely disabled. At the Service level, the Air Force conducts a 
command and control (C2) exercise, Blue Flag, which includes a 
realistic, interactive enemy force. An example of a MAJCOM level 
exercise is Air Combat Command's CROWN ROYALE that tests information 
technology outages. Through these exercises, we have learned about 
information protection, network design, configuration management, and 
network performance.
    Question. Do you conduct training exercises where the information 
technology systems are turned off?
    Army Answer. Tactical units are expected to be able to work through 
and overcome the full range of potential problems that occur on and off 
the battlefield. This includes the loss of information systems. During 
warfighter exercises, units are often faced with the challenge of 
fighting without the aid of their information systems. While not 
intentionally turned off, they are not used if adjudicated threat force 
actions, such as jamming and destruction, would have inhibited their 
operation during the fight.
    Navy Answer. For safety reasons as well as to ensure that the JTFEX 
is completed, the ``Red Team'' does not usually ``turn off'' 
information technology systems unless specifically directed to by the 
Fleet Commander (which to date has not happened). There certainty are 
instances during training exercises when systems are simulated as being 
turned off (completely disabled) to assess the crew's ability to 
implement ``work arounds.''
    Marine Corps Answer. Marine units often use electronic attack means 
provided by our radio battalions to test their ability to operate when 
information technology has been disrupted or disabled. Marines also 
test their ability to maintain operational security under such 
conditions through the use of communications monitoring. However, even 
under the best of conditions, maintaining C4I systems to support 
operational Marine units is a challenging task. Due to the nature of 
information technology equipment, Marines frequently train and carry 
out contingency operations with disrupted or degraded communications. 
We have found that system redundancy and training are key to 
maintaining the ability to operate with degraded C4I systems.
    Air Force Answer. Yes, exercise scenarios incorporate events where 
information technology systems affecting operations, intelligence, 
communications, and computers, to name a few, are restricted or turned 
off. These training scenarios present unexpected challenges to 
participants. They learn to ensure the continuity of mission and 
business operations by recognizing system disruptions, exploring 
options and using back-up systems and procedures.
    Question. Do you consider the need to prepare your information 
technology systems for the year 2000 date change to be a serious 
readiness issue?
    Army Answer. Yes. Our Army's ability to shoot, move and communicate 
effectively--both within our service and in conjunction with Joint and 
Combined forces--has come to rely heavily on information technology. 
The increasing importance of information dominance, with its continual 
introduction of more sophisticated weaponry to the inventory, has made 
this reliance critical. The year 2000 problem is a readiness issue. 
Both the Chief of Staff and the Secretary have given the year 2000 
issue top priority status.
    Question. Would you consider a unit ``combat ready'' in December 
1999 if its information technology systems had not been proven year 
2000 compliant in a full end-to-end test or in a rigorous training 
exercise?
    Army Answer. We will consider all units combat ready if all mission 
critical information technology systems are validated and certified as 
year 2000 compliant. We are taking all prudent steps possible to make 
sure that our information technology systems will operate before, 
during and after the year 2000. However, we do not believe a full end-
to-end test or a rigorous training exercise is prudent, affordable, or 
necessary to establish this. We are requiring that all mission critical 
systems in the Army be certified year 2000 compliant at the General 
Officer/Senior Executive Service level. This certification is done 
following appropriate testing and validation, to include testing of the 
primary interfaces. Additionally, we are developing contingency plans 
for those major systems that are currently non-compliant. This will 
give us a back-up if any of the renovation efforts for non-compliant 
systems are not implemented in time or do not work as desired.
    Navy Answer. The Navy considers the Year 2000 issue a serious 
matter with the potential to affect operational readiness and is taking 
appropriate action. We are following the five-phase Management Plan 
issued by the Department of Defense and the Year 2000 Action Plan 
developed by the Department of the Navy. These provide guidance on 
assessing the problem, renovating systems as needed, validating fixes, 
and installing solutions and corrected systems. We are also preparing 
contingency plans to ensure the continuity of Naval operations at the 
millennium rollover should unexpected problems arise. The Secretary of 
the Navy staff is providing departmental oversight. At the service 
level we have established a Navy Y2K Project Office to instill Navy-
wide awareness of the issue and its potential consequences, to 
specifically engage senior Navy leaders, and to facilitate and oversee 
a capability-based end-to-end system assessment and subsequent 
integrated Fleet test. The accomplishment of these tasks is one of the 
Navy's top priorities.
    Marine Corps Answer. Yes, it is a serious issue and it is being 
treated accordingly. We have assessed the impact of the year 2000 and 
determined it touches all mission and support systems; may cause 
program and upgrade delays; places additional cost burdens on some 
programs; may require early termination of systems; and may drive a 
solution toward early migration and modernization. All information 
technology systems have been assessed and are currently being renovated 
to ensure Y2K compliance.
    Air Force Answer. Yes. The year 2000 problem is the Air Force's 
number one software and information technology issue. We are currently 
tracking over 3,000 weapon and automated systems affected by this 
problem. Mission critical systems are our primary focus. Our goal is to 
make all fixes by 31 Dec 1998, and to use 1999 for testing. We are 
confident the year 2000 date change will not affect the Air Force 
mission.
    Question. Would you consider a unit ``combat ready'' in December 
1999 if its information technology systems had not been proven Year 
2000 compliant in a full end-to-end test or in a rigorous training 
exercise?
    Navy Answer. No, I would not. As part of the predeployment 
preparations, battlegroup commanders have required rigorous operational 
exercises to fully flex onboard and supporting systems in the 
operational environment and to assure themselves that the units are 
combat ready. The Navy's approach to ensuring combat readiness, post-
Y2K implementation, remains consistent and includes plans to conduct 
end-to-end operational testing both in the laboratory environment and 
in the actual operational afloat environment. It is important to note 
that these tests will not be limited to information technology systems, 
but will include many systems which employ computers, processor chips, 
and software. We are assessing all systems, whether they are 
information systems, control systems, or weapons systems. The approach 
includes integration testing after the actual systems have been 
evaluated and repaired. We are testing systems themselves, then their 
immediate interfaces to other systems, and finally will conduct tests 
in a ``system of systems'' environment during workup exercises for 
deploying battlegroups to ensure that all the fixes work together to 
deliver critical operational capability.
    Marine Corps Answer. No, we would not consider a unit combat ready 
if its information technology systems had not been proven year 2000 
compliant through adequate testing. The United States Marine Corps is 
totally committed to assure that no mission critical system failures 
occur due to the year 2000. Failure of a mission critical system due to 
the year 2000, could potentially lead to a degradation in our ability 
to accomplish our missions. Therefore, the Marine Corps is using an 
integrated system-by-system, command-to-command approach that will 
ensure critical warfighting and warfighting support capabilities remain 
intact through the year 2000 and beyond.
    Air Force Answer. Yes. While year 2000 testing will be extensive 
and complex, it is simply not possible to do a full end-to-end test to 
prove year 2000 compliance. The Air Force year 2000 testing program 
includes testing systems and their interfaces, as well as system-of-
systems testing. We are also working with the Office of the Secretary 
of Defense (OSD) and the Joint Staff in developing a year 2000 System-
of-Systems Test and Evaluation Master Plan (TEMP). The TEMP wold lay 
out mission-oriented test scenarios for mission critical and mission 
support systems at the Service, Joint, and Allied/Coalition levels. As 
extensive as these tests will be, they will not prove year 2000 
compliance. However, they will give us high confidence in our 
procedures and better understanding of any risks we might face.
    We have asked unit-level commanders to develop operational 
contingency plans to ensure all mission-critical and essential support 
functions (e.g., command centers/posts, maintenance operations centers, 
air operations centers, personnel, financial management, and logistics) 
continue to function if unanticipated year 2000 problems arise. We plan 
to establish crisis response cells for software-intensive activities 
should we have problems during the rollover. To ensure essential 
support functions are performed, we have emphasized crisis planning to 
ensure long lead-time items are preordered, and essential items (such 
as aircraft engine parts, food items, and medical supplies) are pre-
positioned.

                         Privatization Program

    Question. The Department of Defense (DoD) has an aggressive 
privatization program designed to contract out numerous base support 
and administrative functions. DoD claims that a significant portion of 
the end strength reductions specified in the Defense Reform Initiative 
will be achieved through privatization of functions currently performed 
in-house by DoD. DoD also claims that outsourcing will result in cost 
reductions of about 20 percent.
    How important is the accelerated privatization initiative to your 
efforts to improve the ratio of DoD ``tooth to tail?''
    Army Answer. The primary objective of Army's Competitive Sourcing 
Program--which consists mainly of cost competition studies conducted in 
accordance with Office of Management and Budget Circular A-76, 
Performance of Commercial Activities--is to achieve efficiency in the 
performance of the Army's commercial activities. We achieve these 
efficiencies whether the cost competition determines that it is more 
economical to convert the activity to performance by contract or by the 
streamlined in-house Most Efficient Organization. While the primary use 
of the savings that result from these efficiencies will be to fund 
critical Army modernization requirements, the improvement of the Army's 
``tooth to tail'' ratio will be another benefit.
    Navy Answer. Maintaining our momentum in the competition program is 
essential to our efforts to improve the ratio of DoD ``tooth to tail''. 
The Navy's FYDP reflects net savings through competition of 
approximating $2.5 billion through FY 2003, with annual savings in FY 
2003 approximating $1.2 billion, that have been reapplied within the 
FYDP, toward recapitalization and modernization of our force structure.
    Marine Corps Answer. The Marine Corps has assumed savings of $110 
million per year, starting in FY04, gained through the competitive 
sourcing program. These savings have already been reprogrammed for 
procurement modernization part of the ``tooth''.
    Air Force Answer. The Air Force is not using outsourcing or 
privatization as a means to improve our ``tooth to tail'' ratio. 
However, since all of the positions being considered for outsourcing or 
privatization are ``tail,'' the Air Force will realize a slight 
increase in our ``tooth to tail'' ratio.
    Question. Can increased privatization of support functions meet DoD 
goals for reducing the cost of infrastructure? Can the savings from 
privatization obviate the need for additional rounds of base closings?
    Army Answer. The Army Competitive Sourcing Program alone cannot 
meet DoD goals for reducing the cost of infrastructure. In particular, 
the savings needed from additional rounds of base closing are crucial 
to meeting those goals.
    Navy Answer. This program is relatively new, and in the absence of 
hard data it is not possible to state how much this program will help 
reduce infrastructure costs. The Navy's emphasis is on competitive, not 
on outsourcing and privatization per se, and we expect real savings 
regardless of the outcome of the competitions--either a new more cost 
effective in-house organization or a contract. While savings from 
privatization and competition will help us achieve our recapitalization 
and modernization goals, these initiatives by themselves will not 
obviate the requirement for the additional base closure and realignment 
necessary to sufficiently reduce excess capacity and related 
infrastructure.
    Marine Corps Answer. Base closings are related to changing mission 
requirements. For whatever infrastructure is required to support 
readiness, we will use privatization as one technique for achieving the 
most cost effective base support functions. I do not believe it will 
obviate the need for an additional BRAC.
    Air Force Answer. Privatization cannot reduce excess bases for our 
source structure. This can only be addressed through the BRAC process. 
Privatization only provides a mechanism to recapitalize our existing 
aging infrastructure. The Air Force has not programmed any dollar 
savings for privatization because the focus of our current 
privatization efforts (housing and utilities) is cost avoidance rather 
than savings.
    Question. What are the limits of privatization? Are your efforts 
limited by the need to maintain a rotation base? Does the need to 
maintain certain skills among military or civilian personnel limit your 
ability to privatize functions?
    Army Answer. There are legal prohibitions on outsourcing such 
functions as firefighters and security guards. Other than that, there 
are very few limits on Army commercial activities that can be competed. 
Rotation base limits on competition are minimal because the Army has so 
few overseas military positions for which rotation base positions have 
to be preserved. Similarly, there are very few limits on competition 
based on maintaining skills.
    Navy Answer. Privatization, or competitive outsourcing, is limited 
both by legislation and by the Navy's requirement for current sea-shore 
rotation and homebasing. Our policies provide a structured check and 
balance system between military manpower requirements and proposed 
shore infrastructure reductions for regionalization and outsourcing 
initiatives to ensure that military readiness is not adversely 
affected. The need to maintain a sea-to-shore rotational base, along 
with the need to maintain certain critical skills, has indeed limited 
our ability to compete certain military-intensive functions. For this 
reason, the Navy's plan to achieve the savings reflected in this budget 
focuses on competing civilian intensive functions.
    Marine Corps Answer. Privatization is limited by the willingness of 
a commercial vendor to provide a bid. Rotation is not a compelling 
limitation faced by the Marine Corps. The need to maintain certain 
skills among military or civilian personnel may limit the ability of 
the Marine Corps to completely privatize functions.
    Air Force Answer. Our privatization efforts are limited by public 
law and DoD workforce policies concerning military essential and 
inherently governmental functions. The need to maintain a rotation base 
was a requirement when considering positions for outsourcing. It 
limited our ability to outsource some functions. The requirement to 
maintain certain skills among military and civilian personnel also 
limited our ability to outsource some functions.
    Question. What are the net savings from outsourcing and 
privatization assumed in the 1999 budget request? Do you view the 
estimated savings in the budget request as realistic?
    Army Answer. The fiscal year 1999-2003 Future Years Defense Plan 
assumes a net savings of $1,200,000,000 over the five year period. The 
estimated savings are realistic and the Army is optimistic that its 
competition initiatives will achieve the programmed savings.
    Navy Answer. No savings are assumed in FY 1999. Beginning with FY 
2000, the Navy's FYDP reflects net savings of approximately $2.5 
billion through FY 2003, with annual savings in FY 2003 approximating 
$1.2 billion. These savings have been reapplied within the FYDP, toward 
recapitalization and modernization of our force structure. I need to 
stress that the Navy's emphasis is on competition, not on outsourcing 
and privatization per se. We expect savings regardless of the outcome 
of the competitions either a new more cost effective in-house 
organization or a contract.
    Marine Corps Answer. The Marine Corps budget does not reflect any 
savings in Fiscal Year 1999. The budget assumes savings beginning in 
Fiscal Year 2000 ($20 million) and growing to a steady state amount of 
$110 million by Fiscal Year 2004.
    Air Force Answer. The Fiscal Year 1999 budget contains $1.8 billion 
in savings from outsourcing. Although our outsourcing program is 
aggressive and has some inherent risks, we believe the savings budgeted 
are realistic. Our outsourcing savings estimate is conservative because 
we only assumed a 25 percent reduction in costs vice the 34 percent we 
have realized over the last 10 years. As long as we are able to execute 
our planned outsourcing initiatives, we should meet our projected 
savings.
    Question. What costs have been incurred by each service to 
implement its privatization program?
    Army Answer. The costs associated with competing the Army's 
commercial activities will be $23,000,000 by the end of this year with 
another $27,000,000 programmed for fiscal years 1999-2001.
    Navy Answer. The Navy will spend between $20 million and $38 
million in fiscal year 1998, depending upon the final number of 
positions to be studied this fiscal year. In fiscal year 1999 the Navy 
has budgeted $21 million for continuation of outsourcing studies. The 
funding is to provide consultant support for competitive sourcing 
studies under OMB Circular A-76. Using $2 thousand/FTE as a benchmark, 
these funds will be used to augment the in-house efforts of personnel 
conducting the studies. However, the major focus of the Navy program 
will rely upon personnel already in place to conduct the bulk of the A-
76 study effort. The use of local expertise plays a critical part in 
establishing the requirements for performance work statements (PWS) and 
in developing the in-house Most Efficient Organizations (MEO) required 
by OMB Circulator A-76.
    Marine Corps Answer. To date the Marine Corps has spent $170 
thousand to implement its privatization program. We plan to invest 
approximately $37 million in our program from FYs 1998 to 2001.
    Air Force Answer. The Air Force has spent approximately $9 million 
on training, systems upgrades, Performance Work Statement development, 
and contractor augmentation since Fiscal Year (FY) 1995 to implement 
our outsourcing and privatization program. Based on the increased 
number of positions to be competed under the A-76 study process, we 
will require additional funds to accomplish the studies.
    Question. What measures has each service implemented to validate 
savings?
    Army Answer. The Army is developing a database that will track the 
outcome of these commercial activities studies to validate savings. In 
the interim, we have asked the Army Audit Agency to validate savings.
    Navy Answer. The Navy relies upon the cost comparison process 
established by OMB Circular A-76. Circular A-76 not only provides 
rigorous guidelines for identifying the costs of both in-house and 
private sector performance but it also incorporates an independent 
review process and provides all affected parties with an independent 
appeal process. To monitor costs after the comparisons have occurred, 
we are establishing a reporting system that will track actual costs 
across the five-year comparison period. Based on our past experience, 
we expect actual costs to track well with the cost comparison 
estimates, but will take appropriate corrective action if they do not.
    Marine Corps Answer. The Marine Corps is implementing Activity 
Based Costing within facilities maintenance and logistics aboard its 
U.S. bases. This will establish a baseline cost for those related base 
commercial activities within two areas which produce approximately 70% 
of installation operating costs. These baseline costs can then be 
compared to either the A-76 cost comparison process generated most 
efficient organization costs and/or commercial sector contract offers.
    Air Force Answer. Since implementation of the Office of Management 
and Budget Circular A-76 guidance in 1979, the Air Force has achieved 
savings of 24 percent through competition. And in fact, over the last 
ten years we have realized a savings of 34 percent. To be fiscally 
conservative, we only projected a 25 percent savings through 
competition in the Fiscal Year (FY) 1999 President's Budget.

                      Base Realignment and Closure

    Question. Secretary Cohen has repeatedly argued that two additional 
rounds of base closure are necessary to free-up funding for readiness 
and modernization. The Department of Defense (DoD) proposal would 
provide for the additional base closings to take place in 2001 and 
2005. What is your view on the necessity for additional base closures 
and realignments?
    Army Answer. The Army supports Secretary Cohen's position on the 
need for additional Base Realignment and Closure (BRAC) rounds in 2001 
and 2005. The Army must dispose of excess infrastructure that remains 
after the first four BRAC rounds and consolidate functions to increase 
efficiency. Two additional BRAC rounds will allow the Army to align 
infrastructure with force structure and provide facilities required to 
support the Army of the 21st century.
    Navy Answer. The Navy supports the unanimous view of the Joint 
Chiefs of Staff that additional base closures are necessary if we are 
to transform the Armed Forces to achieve Joint Vision 2010 and to 
implement the QDR Strategy.
    Marine Corps Answer. The Marine Corps supports the DoD call for 
additional BRAC rounds. However, the Marine Corps does not have clear 
indicators that additional rounds of BRAC will identify any significant 
Marine Corps base realignments or closures.
    Air Force Answer. The Quadrennial Defense Review (QDR) supported, 
and the Secretary of Defense has requested, two additional rounds in 
2001 and 2005 which the Air Force fully supports.
    Question. How much of the current facilities footprint do you 
anticipate that DoD would give up in future rounds?
    Army Answer. The Army has not initiated any studies or analysis 
that would allow us to determine the Army facilities and installations 
that would be recommended for closure or realignment in future BRAC 
rounds.
    Navy Answer. DoD estimates that it has about 23 percent excess base 
capacity. A Base Realignment and Closure military value analysis would 
have to be completed in order to more precisely determine the 
facilities footprint that would be recommended for BRAC.
    Marine Corps Answer. The Marine Corps does not have clear 
indicators that significant excess capacity exists on Marine Corps 
bases. Without a detailed analysis that can only be accomplished in a 
BRAC round, the Marine Corps cannot identify any specific level of 
reduction at this time.
    Air Force Answer. Though the Air Force acknowledges an overall 
excess in base capacity, we would need to use a detailed base-by-base 
analysis that addresses the factors considered in the BRAC process 
before determining the exact number of facilities.
    Question. What is the level of savings envisioned over the long 
term for two additional rounds of base closings?
    Army Answer. The Army will achieve annual recurring savings 
approaching $1 billion from the first four BRAC rounds. The Army does 
believe that significant savings will result from additional BRAC 
actions. However, the Army cannot quantify the savings that will be 
achieved from future BRAC rounds prior to identification of specific 
installations and compilation of detailed cost and savings analysis.
    Navy Answer. Navy projects savings of one billion dollars per year 
after implementing two additional BRAC rounds.
    Marine Corps Answer. The Marine Corps does not have clear 
indicators that significant excess capacity exists on Marine Corps 
bases. Without a detailed analysis that can only be accomplished in a 
BRAC round, the Marine Corps cannot project any potential savings from 
facilities reduction at this time.
    Air Force Answer. The purpose of base closures is to match 
infrastructure with changes in force structure that reflect policy 
objectives. This in turn frees up budget resources. This is especially 
true today when force structure has been reduced thereby generating 
costly excess capacity. In addition, the Air Force is reshaping itself 
into an Expeditionary Aerospace Force in order to meet future 
operational requirements. This requires a smaller, but more robust, 
basing structure. Without question, reducing the infrastructure will 
produce savings. The level of those savings, though, depends greatly on 
how many and what type of bases can be closed or realigned. As history 
has shown, it takes many months of careful study to determine the most 
beneficial restructuring scenarios during which estimates of savings 
have fluctuated widely. As a guide, however, the Secretary of Defense 
has stated that two more rounds of base closures could generate up to 
$20 billion in savings by 2015, DoD-wide.

    [Clerk's note.--End of questions submitted by Mr. Young.]
                                         Wednesday, March 11, 1998.

 FISCAL YEAR 1998 SUPPLEMENTAL APPROPRIATIONS FOR BOSNIA AND SOUTHWEST 
                                  ASIA

                               WITNESSES

HON. WILLIAM S. COHEN, SECRETARY OF DEFENSE
GENERAL JOSEPH W. RALSTON, VICE CHAIRMAN OF THE JOINT CHIEFS OF STAFF, 
    UNITED STATES AIR FORCE
HON. WILLIAM J. LYNN, UNDER SECRETARY OF DEFENSE (COMPTROLLER)

                              Introduction

    Mr. Young. The committee will come to order.
    This afternoon, we are pleased to welcome the Secretary of 
Defense, the Honorable William S. Cohen; and General Joseph W. 
Ralston, Vice Chairman of the Joint Chiefs of Staff; and the 
Honorable William J. Lynn, Under Secretary of Defense, 
Comptroller, for a hearing on the proposed fiscal year 1998 
emergency supplemental appropriations for the Department of 
Defense.

                          SUPPLEMENTAL REQUEST

    Last week, the President forwarded to the Congress his 
request for approximately $2 billion in supplemental funding 
for the Department of Defense. Most of this amount, $1.85 
billion, is proposed to pay for the additional costs of the 
recent military deployments to the Persian Gulf region, as well 
as the costs associated with the President's decision to extend 
the mission of U.S. forces in Bosnia.
    The President also requested $173 million in order to 
repair severe storm damage at several military facilities.
    Mr. Secretary, I want to commend you, as well as the 
Chairman of the Joint Chiefs, General Shelton, General Ralston 
and the rest of our senior military leadership, for your role 
in contributing to what we hope will be a successful resolution 
to the latest problems with Iraq. And I know I speak for all of 
us in the Congress in saying how proud we are of our troops and 
how well they have conducted themselves as they carried out 
their important missions.
    As you know, some of us on this Committee as well as some 
other colleagues just returned the day before yesterday from a 
trip to Bosnia where I had the privilege of leading a 
delegation of 10 Members to the region. That included Mr. 
Bonilla and Mr. Nethercutt, who are members of this 
subcommittee.
    This past October, we visited our forces in the Persian 
Gulf region, and I have to tell you our men and women in 
uniform are once again carrying out difficult assignments under 
less than ideal conditions. But they truly are our best defense 
asset, and it is incumbent on all of us to do what we can to 
give them the support that they need.
    Which brings us to the supplemental. The $2 billion request 
before us covers several different areas.

                           PERSIAN GULF COSTS

    First, it provides funds to pay for the buildup of our 
forces in the Persian Gulf, which started last November, and 
the costs of maintaining these level of forces in the region 
through the end of the fiscal year in September. This is an 
extensive operation, including the deployment of a second 
aircraft carrier and a marine amphibious ready group to the 
Gulf, the movement of two additional Army brigades to Kuwait, 
and beefing up our land-based Air Forces in the area.
    Since these were unplanned deployments, however, none of 
this activity was accounted for in the fiscal year 1998 
appropriations bill. As a result, right now the cost of these 
operations, nearly $1.4 billion, is being financed by diverting 
funds intended for other critical defense activities. If this 
money isn't replaced through the supplemental request before us 
today, then we are looking at major problems in our personnel, 
quality of life and readiness programs as we move into the last 
half of this fiscal year.

                            BOSNIA OPERATION

    The situation is a little different with respect to Bosnia. 
When we completed action on the fiscal year 1998 Defense 
Appropriations Act last fall, the United States was only 
committed to keeping our troops in Bosnia through June of this 
year. That was the length of the mission, as announced by the 
President in November of 1996. We would be in Bosnia through 
June, 1998. And, last year, Congress approved funding to 
support the Bosnia mission through that date.
    But as we worked on the fiscal year 1998 bill, we also knew 
there was a strong likelihood that the President, along with 
our NATO allies, would once again decide to extend the mission 
of our forces in Bosnia. So we put in place a mechanism which 
required the President, if he chose to extend the mission, to 
do several things. He was required to formally request 
supplemental funding for the mission extension and, also, to 
provide a certification to the Congress providing an 
explanation of the national security interests, the mission, 
the exit strategy and other criteria involved with an extension 
of the mission in Bosnia.
    As we know, the President and NATO, as an alliance, have 
now, in fact, decided to extend the Bosnia mission; and, with 
this supplemental, the President has complied with the 
congressional requirement of last year. The supplemental 
requests $487 million to cover the unbudgeted costs of the 
Bosnia deployment from July through September of 1998; and the 
President has also submitted a fiscal year 1999 budget 
amendment, providing $1.86 billion over the amounts in the 
original fiscal year 1999 budget request in order to support 
operations in Bosnia through next year.

                            IRAQ AND BOSNIA

    Mr. Secretary, there are many questions regarding both Iraq 
and Bosnia, which I expect the Members will present to you this 
afternoon, most of which will deal with policy issues. Let me 
cite just a few right now.
    Regarding Iraq, do you believe it will comply with the 
agreement it entered into with the United Nations Secretary 
General? What will we do if Iraq does not comply? And what is 
our long-term policy regarding Iraq and the Gulf region in 
general?
    As for Bosnia, perhaps the biggest question is how long our 
troops will be there. This time, the President has not set a 
target date for the withdrawal of U.S. forces. What needs to be 
done before we can bring our troops home? And what is a 
reasonable estimate as to how long that will take--2 years, 5 
years? Who knows?
    It is also important to consider what these operations are 
doing to our overall defense posture. Missions of these sorts 
are stretching our resources to the limit, and we are seeing 
the effects. High rates of personnel and operational tempo are 
directly related to growing personnel retention problems, 
especially with pilots, and also unexpected shortages in spare 
parts and declining aircraft mission capable rates. And each of 
the services continue to warn us about increasing readiness 
problems, particularly with nondeployed units whose training 
and funding is being sacrificed in order to keep the front-line 
forces at acceptable levels of preparedness.
    These are all important issues, and I hope we can explore 
all of them today. But I want to come back to what is really 
the bottom line confronting us with this supplemental request.
    These funds are being requested in order to support 
unplanned contingencies, which we didn't provide for in last 
year's bill. But the operations are going on. They are already 
under way. The money is being spent even as we sit here today. 
Money which was intended to pay for fourth quarter training, 
fourth quarter paychecks, fourth quarter depot maintenance, all 
that money is being used to support these contingencies; and if 
it is not replenished we will be heading towards a massive 
readiness problem in a matter of a few months.
    I support this supplemental, and I support your decision to 
request these funds as an emergency appropriation, which 
doesn't require offsets. We can no longer pay for these 
missions out of the hide of the Department of Defense and the 
military services, as we have been doing for the past several 
years. At the same time, we are asking our troops to do more 
and more, it makes no sense to continue to rob Peter to pay 
Paul and to make us offset this supplemental from within other 
Defense Department accounts.
    So, Mr. Secretary, we look forward to your testimony and 
that of your colleagues and also to your reaction to the issues 
I have just touched on.
    Before we give you that opportunity, I would like to 
recognize Mr. Murtha for any comments he would like to make.

                         Remarks of Mr. Murtha

    Mr. Murtha. I hope that when you discuss your answers 
today--I keep hearing this rumor that you have told all the 
departments to save 10 percent of their money for Bosnia/Iraq 
and Mr. Lynn is husbanding money over there which he has 
available, and I hope that you will either tell us that is 
true, which would make it easier for us, or disabuse us of that 
concern as you testify.
    Secretary Cohen. Okay.
    Mr. Young. Mr. Secretary, we will be happy to hear from 
you, and then we will be prepared to present you with some 
interesting questions.

                  Summary Statement of Secretary Cohen

    Secretary Cohen. Okay. I hope I have some interesting 
answers to respond.
    Mr. Chairman, I have submitted a prepared statement. I 
think you all have it. I won't take your time to go through it 
verbatim. Let me try and summarize.
    There are several questions that have to be asked and 
answered. They are real simple. Why, what, how long, and how 
much? That is basically what you are going to be asking of me.

                           BOSNIA DEPLOYMENT

    With respect to Bosnia, you have already outlined the 
problem. There was no plan to be there beyond June of 1998.
    When I was sitting on the other side of this table over in 
the Senate, the other Chamber, body, I had my doubts about the 
wisdom of becoming involved in Bosnia. I supported the 
limitation of the 1-year and then I supported the extension to 
the 18 months, but it was my firm belief and expectation that 
we be able to complete that mission by June of this year.
    Since that time, obviously I am sitting in a different 
position, but I have also had an occasion to travel back to 
Bosnia on quite a few occasions. And we have made an enormous 
amount of progress there. It would be easy to simply adhere to 
the artificial deadlines that were set and many of us 
subscribed to and simply say, time is up, time to leave.
    But the fact is, we have contributed an enormous amount of 
stability to that region. We have been successful in seeing 
300,000 soldiers retired from active service and back into 
civilian life; 6,900 weapons have been destroyed; and we have 
seen some democratic elections, independent media at least 
starting to be established. We have seen some 400,000 refugees 
and displaced persons start to return to Bosnia. And one-third 
of the publicly-indicted war criminals are now in custody in 
The Hague.
    The economy in 1996 increased by 50 percent, started at a 
very low base, but it is up 50 percent in 1996. It was up 35 
percent in 1997. So the trend lines are all in the right 
direction in terms of what we are doing.
    There has been consideration, another potential Vietnam, 
are we really bogged down in a morass that we can never extract 
ourselves from? If you look at the numbers, the numbers are 
going in just the opposite direction. We started off with 
roughly 20,000 troops in Bosnia. We then reduced to 15,000 then 
down to 12,000 then down to 10,000 then down to 8,500; and the 
President now proposes that we go as low as 6,900 for the 
coming months and, hopefully, a reasonable time. I will talk 
about that in a moment.
    But we have also seen something else. We have been very 
successful. I have been to the NATO meetings in Brussels. I 
have talked to all of my counterparts saying that the House and 
the Senate is serious. They have set a number of criteria. This 
is not the President's decision alone. He must certify to the 
satisfaction of the Congress that it is in our national 
interest to be there. He must certify how many troops should 
remain, for how long, as best can be determined, how much, and 
what this will do to readiness. He must do all of that in order 
to go beyond June of 1998.
    I also made it a point to say that I thought we needed 
something in between the forces and the police departments that 
we are trying to develop over there. The IPTF has been 
underfunded, but they have also been, I think, bolstered by 
contributions that we believe can be made now to have a 
specialized unit, for want of a better word, to serve as 
something in between our Armed Forces and the police as we try 
to professionalize them. And this is something that I think is 
a very positive story to tell, that we are getting 
contributions. The Italians and others have indicated support 
for such a concept.
    I think it is clear to virtually all of us that a stable 
Europe is in America's national security interest and it also 
depends upon America's leadership.
    You have already outlined the numbers that we have talked 
about as far as Bosnia for fiscal 1998, roughly half a billion; 
and fiscal 1999, $1.9 billion.

                             SOUTHWEST ASIA

    I would like to talk for just a few moments about Southwest 
Asia.
    Iraq clearly precipitated this crisis. It started back in 
late summer, early fall, to the point where they threatened to 
shoot down the U-2 flights that are under U.N. banner but are 
flown by U.S. pilots. General Ralston and I spent many moments 
together, along with General Shelton, concerned about what 
might happen should the U-2 flight ever be attacked. At that 
time I made a determination that we had to have much more 
firepower in that region to send a signal to Saddam Hussein 
that that was not going to be tolerated and he would be making 
a major mistake were he ever to fire upon that U-2 aircraft.
    Then there was a threat to perhaps somehow attack some of 
our forces or those of the allies in the region, and we built 
up our force under those circumstances. Say if Saddam Hussein 
was not going to comply with the U.N. resolutions, we might 
have to take action, should the President determine to do that, 
to compensate by severely degrading and cutting down his 
ability to threaten his neighbors with weapons of mass 
destruction.
    And that was the posture that we had been in until most 
recently with the Secretary General of the U.N. going to Bagdad 
and coming up with a memorandum of understanding.
    Where does that leave us right now? A lot of questions were 
raised last week in the aftermath of the signing of that MOU. 
Questions raised about Mr. Butler: Would he maintain his 
independence? Would he be undercut? Who would make up the team 
going in to see the so-called eight presidential sites? What 
would be their mission? Who would they report to?
    Most, if not all, of those questions have been answered, I 
think to our satisfaction, although we have to remain at least 
on guard to make sure that that--the assets we have received to 
date will not be eroded.

                            SITE INSPECTIONS

    But, essentially, Mr. Butler remains in charge. The group 
that will be going to the presidential sites in a couple of 
weeks will, in fact, report back through Mr. Butler. He will 
have control of that investigation as such, by virtue of the 
reporting policy. There will be, apparently, some diplomats who 
will go on that mission to witness the inspection process. They 
will not have any authority to conduct inspections, to do much 
more than to witness what is taking place.
    As you may or may not know, Scott Ritter recently went in 
and completed the most recent inspection, without any incident, 
into so-called sensitive sites that they have previously been 
barred from entering. So for the past 7 years, the U.N. teams 
have been barred from getting into certain sensitive sites.
    The positive aspect of this particular agreement is that 
all sites are now open to inspection. Nothing is off-limits. 
The presidential--so-called presidential sites will be 
inspected. They will be inspected by--through a regime that 
will report directly to Mr. Butler. So I think our goals of 
getting full, unfettered access have been achieved through this 
memorandum of understanding.
    With respect to Iraq, will it continue? That remains to be 
seen. I think we have to be constantly vigilant here.
    Saddam Hussein has had two goals in mind ever since the 
sanctions regime were put in place, and that is to get rid of 
the inspectors and get rid of the sanctions. So far, he has 
been unable to get rid of the inspectors. So far, he has been 
unable to get rid of the sanctions, but that undoubtedly is his 
goal; and we have taken the position that as soon as Saddam 
Hussein demonstrates that he is prepared to fully comply with 
all of the U.N. resolutions, relevant U.N. resolutions, then 
there will be light at the end of the tunnel in the way of 
lifting of the sanctions. But, in the meantime, I think there 
is a long way to go.
    I think we have obviously to test and to verify, and that 
is what--precisely what we are doing now. Saddam Hussein, I 
don't think, can be trusted. We are not going to trust him. We 
are going to test and to verify. There has been a historical 
pattern of delay, of deception and of outright lying. What we 
have to keep in mind is this is not something that is the 
equivalent of a 100-yard dash: He suddenly opens his doors, we 
go in and we find little, if anything, some of which could have 
been removed, and then the pressure will come for relief from 
sanctions.
    We have to make it very clear to the United Nations, to 
Saddam Hussein and to all of our allies, this is not a 100-yard 
dash. It is much more the equivalent of a marathon, that we 
have to be in for the long haul, we have to make sure that we 
are satisfied that indeed he is prepared to fully comply and 
not engage in a pattern, after a month or two, of more 
deception and more delay and more manipulation.
    And if we are satisfied, after a responsible period of 
time, that we can go from intrusive inspection to some other 
kind of regime with monitoring, with, again, spot inspections 
from time to time, then perhaps there can be relief provided 
under the sanctions regime. At least that would be my own 
recommendation.
    But I don't think we should be satisfied to simply go into 
empty buildings and find files that have been, in fact, the 
subject of an Iraqi search and destroy mission before the 
inspectors get there and say there has been full compliance.
    So it is not a short-term project. It is a long-term 
project, and it is one that there should be light at the end of 
the tunnel if, in fact, there is going to be a satisfactory 
demonstration of full compliance.
    I think there is something more. I think that Iraq has 
something of an affirmative duty here as well.
    It is very difficult to take a group of inspectors and to 
send them into a country as large as Iraq and say, go find 
where there may be either chemical or biological, either 
weaponry or manuals, residues or other types of indications 
that they have been engaged in the production of weapons of 
mass destruction. I think there is an affirmative duty on the 
part of Iraq to present evidence to support their claims of 
destruction.
    As I have indicated time and time again, Iraq has lied 
about their accumulation of biological weapons, anthrax, VX 
chemicals and other types of weaponry, their missiles. They 
lied, and they were caught in that lie, and they finally 
admitted that they had nearly 4 tons of VX, that they had some 
200--actually, 250--gallons of anthrax, that they have more 
weapons that have been weaponized with anthrax than they had 
admitted before.
    To date, the U.N. inspectors have yet to be satisfied that 
those systems have been destroyed. And so I think that, just as 
there is a duty on the part of the inspectors to go into Iraq 
to ferret out any suspicions they might have and any prospects 
they might have for finding chemical or biological or even 
nuclear weaponry, that the Iraqis have an affirmative duty and 
that is to satisfy the inspectors in terms of when, how, these 
systems were, in fact, destroyed.
    They should be able to give dates; they should be able to 
give places, times, circumstances and methods of destruction; 
and their failure to do so should not be construed in a way 
that is favorable to their interests.
    So I think they have to describe precisely how, when and 
where these systems have been destroyed; and, absent that, I 
think it calls into question the ability of the UNSCOM 
inspectors to satisfy themselves that they now can represent to 
the United Nations that the Iraqis no longer have the kind of 
chemical and biological weaponry as well as nuclear capability 
that they profess not to have.
    So, in short, the Iraqis have many promises to keep and the 
U.N. has many miles to log before Iraq gets any sanctions 
relief.

                       LACK OF SUPPLEMENTAL FUNDS

    With respect to the other elements of the requests, Mr. 
Chairman, natural disasters, you have touched upon this. I 
think that that is something that we really have to step up to 
as quickly as possible and, of course, the consequences of 
delay--what happens if? And I do have letters here, I won't 
take the time to read them at this time, but letters from all 
of the services saying, if we don't get relief from the 
requirement to fund our current accounts with a supplemental 
appropriation, it can, in fact, prove catastrophic for us.
    I will give you just a quick list of this.
    Michael Ryan, who is the Chief of Staff of the Air Force 
said the service would need to: Severely curtail or cease 
nonflying training; skill and proficiency levels would be 
reduced. The Air Force would curtail peacetime flying training; 
squadrons and wing aircrew readiness would be degraded. All 
nonmission critical travel would cease, further depot 
maintenance inductions deferred, and aircraft grounded.
    The list is fairly long here, and I will just submit that 
for the record.
    But a similar list has been put together by the Army as 
well.
    General Reimer has sent me a letter saying, here are some 
of the things that we would have to do if we don't get this 
soon, sooner rather than later, and certainly by the 1st of 
April they have to start making their plans on what they would 
have to reduce in the way of readiness and other types of 
training and operations.
    Mr. Young. Mr. Secretary, we will place all of those 
letters in our record.
    Secretary Cohen. I think that that would spell out the 
dimensions of the problems as far as we have.
    [The information follows:]
 
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                             IMF FUNDING

    Secretary Cohen. I would like to talk about the total 
package, something that I know is near and dear to all of your 
hearts, IMF and U.N. dues. Those have been included in the 
administration's supplemental request.
    I had the occasion, several--I guess it would be almost 
months ago now, to testify before the House Banking Committee, 
unusual experience for me. I never appeared before the Banking 
Committee before, but I was eager to do so, along with Alan 
Greenspan and Bob Rubin and Larry Summers.
    I attended that hearing because I had just returned from a 
trip to Southeast Asia. And if you just look at the IMF funding 
as simply an international financial transaction, funding of 
countries and companies who have been less than forthright in 
some of their dealings, then it is politically probably not 
saleable. But there is a major security issue involved here.
    There was some hesitancy on the part of IMF, I suspect, 
some in the administration and many in Congress, to deal with 
the situation in Korea. I talked with Secretary Rubin and with 
Alan Greenspan, and we appeared before a Republican caucus. 
There was a leadership meeting at the Library of Congress that 
we came up to; and, at that point, the four of us--actually, 
Larry Summers was there as well--tried to point out it wasn't 
simply a matter of international finance, it was a matter of 
international security. We have 37,000 troops in Korea.
    At that particular point, the Korean economy was pretty 
much in question. As a result of the commitment made by the 
United States to help out in that case, to lend our support, it 
made a big difference. It still is making a big difference.
    We have the Thai leadership coming to this country today 
and tomorrow. They have been a long-term and a long-time friend 
of the United States. Frankly, they were somewhat disappointed 
that the United States failed to show that we were interested 
in their financial difficulties. It is one thing to be a friend 
in good times; but when you are in need, you turn and look 
around and you find out, well, who is behind you under those 
circumstances?
    Frankly, there was some doubt because the United States was 
not quick off the mark to say, Thailand has been a major friend 
of the United States over the years, in good times and in bad; 
and when they were experiencing some difficult times they were 
looking around, and we weren't quite there on time.
    Since that time, I think we have made it clear that we 
intend to be reliable in good times and bad; and I made a trip 
to all of the Association of Southeast Asia Nations, ASEAN 
countries, including in addition I went to China, to make that 
point. It is critically important that we represent to our 
friends in that region that there is a security interest at 
stake. We have spent 50 years building up that region and our 
security interests and the level of prosperity that they have 
enjoyed and we have enjoyed as a result of it.
    I think that it would be irresponsible for any of us to 
simply remain indifferent to the economic situation there and 
dismiss it simply on the basis, well, they have got an Asian 
problem; it is not our problem. You will find very quickly that 
the Asian problem can present enormous problems in the United 
States as well.
    So I would hope, Mr. Chairman, that you would look at that 
favorably as well.

                          UNITED NATIONS DUES

    The U.N., I know, is controversial. There aren't many 
people who are eager to stand up for the United Nations. My own 
position is that, if you belong to an organization and they 
have dues required, you have to pay the dues; and if you don't 
like the way it is being run, you ought to change the 
leadership. You don't like the way the rules are being 
implemented, change the rules. Or, ultimately, I suppose, the 
option is, you can leave.
    I wouldn't recommend that in terms of the United Nations, 
for all of its faults. If you look around in terms of what we 
have been able to achieve working through the United Nations, 
and something that is overlooked when it comes to Iraq, 
frequently we hear there is only the United States and Great 
Britain involved in that. That is not true. We had as many as 
25 countries who have signed up to be part of any military 
operation in the exercise of any military option on the part of 
the United States. Twenty-five countries that weren't out 
there, you didn't hear much about them, but they were there, 
many through the United Nations, most through NATO itself.
    So I think that we benefit enormously from our leadership 
role in the United Nations, and I think that we have an 
obligation to measure up and carry out our obligations under 
them.
    With that, Mr. Chairman, I will yield to General Ralston.
    Mr. Young. Mr. Secretary, thank you very much. I hope you 
know that the members of this Committee have great respect for 
your insights and your views on these matters.
    [The statement of Secretary Cohen follows:]

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    Mr. Young. General Ralston, we will be glad to hear from 
you now. As I read your prepared statement, I was very 
impressed with the directness and the specific examples you 
gave us of the difficulties we would encounter if this 
supplemental is not treated as an emergency and not treated 
rapidly. So we would love to hear from you at this point.

                  Summary Statement of General Ralston

    General Ralston. Thank you, Mr. Chairman.
    As you mentioned, I submitted my remarks for the record. 
But I would like to, first of all, say how pleased I am to 
appear today and talk to you about some of the impacts to our 
men and women in uniform if we do not get this supplemental.
    First of all, all the members of the Joint Chiefs believe 
that our presence in Bosnia and Southwest Asia is very, very 
necessary. I think the Secretary has outlined the reasons for 
that. I will not spend any more time on that aspect of it but 
go to the supplemental request itself and what the impacts 
would be if we didn't get that.

                      SUPPLEMENTAL BUDGET REQUEST

    First of all, for 1998 supplemental we are asking for half 
a billion dollars for Bosnia and $1.4 billion for Southwest 
Asia; and that would cover the cost of sustaining our force 
levels that we currently have there in the Arabian Gulf for the 
remainder of this fiscal year. This request is an emergency, 
nonoffset proposal; and also we are requesting $1.9 billion for 
fiscal year 1999 for Bosnia.

                      IMPACT OF SUPPLEMENTAL FUNDS

    If approved, I can assure you that all the supplemental 
appropriations will go directly to the field and to the fleet, 
where they are needed. Without these funds, we will be required 
to divert money either from our readiness accounts or our 
modernization accounts or from both.
    If we transfer the funds from the readiness accounts, the 
services, I can assure you, will suffer from the impact. For 
the Army, the O&M funds would have to be diverted from training 
and maintenance. That would reduce their divisions to C-3 
readiness status--that is next to the lowest readiness status 
that we have--by the end of the year.
    The Air Force would have to reduce their peacetime flying 
training in the fourth quarter, for flight crews not engaged in 
contingency operations. Other combat aircraft units would be 
degraded to C-4. That is the lowest combat readiness status. 
With the flight training curtailed, the shortage of pilots that 
is already a serious shortage would be further exacerbated.
    The Navy would have to postpone shipyard maintenance on as 
many as 22 ships, which would affect future schedules and 
degrade the reliability and the long-term life of those ships. 
The readiness of nondeployed carrier air wings would slip 
because of the impact on training and maintenance.
    The Marine Corps would have to defer important maintenance, 
taking money from family housing projects and postponing the 
southern California storm damage repairs.
    To prevent such serious impacts on readiness, training, 
quality of life, the services, as the Secretary said, must know 
early in April if they will receive the nonoffset funding so 
they can make their plans. We are already, as you know, halfway 
through this fiscal year, which gives you much less time to 
accommodate a shortage.
    If we are forced to divert the funds from our modernization 
programs, then we will fall behind the investment goals that 
were defined last spring in the Quadrennial Defense Review. In 
fact, the supplemental funding that we are requesting is equal 
to 4 percent of each year's planned expenditure for 
modernization.
    That is twice the amount in this year's budget for 
modernization of the Army's main battle tanks and the Bradley 
fighting vehicles. It is double the number of Harriers and 
Ospreys in this year's procurement budget for the Marine Corps. 
It will buy more than a squadron of F/A18s for the Navy. And it 
would buy eighty new C-17s for the Air Force. Clearly, 
transferring money from the modernization accounts is not an 
attractive option, either.
    The 1999 budget request submitted in February reverses the 
trend of the past few years and meets the modernization goals 
that we established in the QDR. If we do not get the 
supplemental funding, then we will jeopardize those hard-fought 
gains that came out of the QDR.
    Mr. Chairman, without assistance from the Congress in 
funding the cost of these vital operations, we will pay a price 
in degraded readiness and quality of life and find ourselves 
with an aging inventory of systems and weapons.
    Mr. Chairman, I am grateful for the support of this 
Committee and the whole Congress for our men and women in 
uniform. I appreciate very much the opportunity to appear 
before you and to state my views.
    Mr. Young. General, thank you very much.
    [The statement of General Ralston follows:]

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    Mr. Young. Mr. Lynn, I understand that you do not have a 
prepared statement but that you are prepared to answer a lot of 
the questions.
    Mr. Lynn. Exactly right, sir.
    Mr. Young. I would like to yield the first period of 
questioning to the distinguished chairman of the Appropriations 
Committee, Mr. Livingston, a long-time member of this 
subcommittee.

                       Remarks of Mr. Livingston

    Mr. Livingston. Thank you very much, Mr. Chairman.
    Welcome, gentlemen. It is a pleasure to see you all. I 
would like to just hit on a couple of points that you all 
raised and then ask you to expound on my remarks, if you will.
    First of all, I appreciate your comments about the 
supplemental. It has been the practice of the Majority, since 
the Republicans took the Majority, to pay for supplementals, be 
they emergency or nonemergency. This year may represent a 
departure from that fact; and if it is a departure, it is only 
because many of us perceive this issue as a real emergency.
    You all collectively, Secretary Cohen and General Ralston, 
have given us, in your statements, some of the problems that 
would arise if, in fact, either we don't provide the 
supplemental or, secondly, provide it and then just force you 
to take it out of the Defense Department's hide.
    In addition, I have noted articles which relate to 
personnel furloughs and layoffs, delays or cancellation of 
personnel moves, cuts in training of nonforward deployed forces 
and delay or cancellation of planned repair and maintenance; as 
well as the fact that we have about 73 percent of the young 
sailors that we need in the Navy, that there is a serious 
manning shortage in pilots in the Air Force and in some of the 
other services; that tanks and planes are not up to snuff.
    That concerns all of us. And while I don't think that this 
$2 billion in supplemental is going to remedy all of these 
problems, I do hope that the administration is going to take 
steps in fiscal 1999 to begin to address some of the more 
serious drawbacks.
    But that leads me to one point I want to make. In the 
President's request, notwithstanding the fact that we have been 
in Bosnia now over 2 years, maybe 3, he makes no request in 
fiscal year 1999 for Bosnia, let alone any request for Iraq; 
and we have only been there the last few weeks. If the 
President truly wants to look out for the needs of the Armed 
Services, it seems to me he would want to request these in the 
normal tradition of events or sequence of events rather than 
all of a sudden, at the last minute, coming to Congress and 
saying, look, I have got an emergency, please deal with it.
    This is not a problem that we have to be concerned about 
now. You have got a $2 billion shortfall, and I think most of 
the members of this Committee are prepared to deal with that 
shortfall as an emergency. But when you get to fiscal 1999, 
that is another problem altogether, and I do have a big 
question as to why the President didn't ask for the money for 
Bosnia when, in fact, he is looking at some very serious 
shortfalls in his overall defense posture.
    Mr. Secretary, you mentioned IMF, and I want to assure you 
that nobody that I know is indifferent to the concerns of the 
Asians or to the people in the newly independent states. In 
fact, we wish to be of help wherever possible. That is why we 
have had foreign aid programs over the years.
    But I just came from an event actually stretching over a 
few hours here on the Hill in which some very prominent 
economists, noted academics, not the least of which were people 
like Paul Wolfowitz, George Schultz, Milton Friedman and the 
like, participated, saying that, yes, we have problems, but IMF 
isn't the solution to those problems or the way IMF has been 
administered over these many years has not represented an 
improvement in the world economic situation but, in many 
instances, has aggravated it.
    So while we will not turn a deaf ear or a tin ear to a 
request by the administration for relief with the IMF, there is 
some real and solid academic division of opinion about the 
efficacy of the IMF, and that is going to be hashed out in the 
Congress before that money is actually approved. And I think 
that the American people will require that of us.
    With respect to Bosnia alone, I remember that when we sent 
the troops in, wherever that was, one of the conditions that I 
felt was imperative was that we not use U.S. troops to dig up 
land mines; that we not use U.S. money to repair buildings that 
were blown up by Europeans; and that we not become a police 
force going after the war criminals.
    In my opinion, I thought that those were functions that 
were required of the Europeans. If they want us to help in 
preserving the peace, to keep people from killing one another, 
that is why we will go, and that is what we have accomplished. 
But to put our troops in harm's way or to unnecessarily expend 
taxpayers' dollars for buildings that may just well be blown up 
a month later all over again just strikes me as a mission that 
we need not take on, and I would be curious to hear exactly how 
you perceive our mission in Bosnia now.
    Finally, I am concerned about the preliminary reports that 
the Joint Chiefs are rejecting the findings of the Kassebaum 
commission on sex in the military. We would like to hear what 
you have to say about that.

                          READINESS SHORTFALLS

    Secretary Cohen. All right. All in a 5-minute time frame?
    With respect to some of the issues, Congressman Livingston, 
that you point out, Mr. Chairman, we have tried to address the 
shortfalls in readiness this year.
    In the fiscal 1999 budget, we added a billion dollars to 
deal with some of the readiness issues. It won't take care of 
all of the problems, but we are also trying to manage those 
issues, particularly in the Air Force and some of the other 
special problems that we have as far as the overutilization of 
units that are said to be low-density, high-demand.
    I know that General Ralston has been working with the Joint 
Requirements Oversight Council, JROC, very assiduously on this. 
Perhaps he can add a few comments in terms of the new 
management techniques that are involved, where we don't have 
the problem of calling upon those select units time and time 
again to the point where they want to leave because they are 
overworked. But we did put in a billion dollars in the fiscal 
1999 budget.
    You asked the question, why didn't we think of requesting 
money for Bosnia in fiscal 1999? And the short answer is, we 
started putting this budget together back in June, July, 
August, all the way up through December; and we had to finalize 
it by December to have it before the Congress. So there was no 
intent at that point to remain in Bosnia. So neither the 
President, myself, Bill Lynn nor anyone else had any notion 
that we were going to be there beyond June of this year and, 
frankly, had planned that we had enough to carry us through. So 
that is the reason it wasn't included. A decision was not made 
until--certainly until the end of January and the beginning of 
February.

                      INTERNATIONAL MONETARY FUND

    With respect to the IMF, there is a difference of opinion 
in the intellectual community, the financial community.
    I have listened to Chairman Greenspan, for example, testify 
before the Banking Committee--and he would probably agree with 
you; I would rather let him talk for himself--but saying that 
we need to have some kind of a new vehicle to deal with the 
problems that we are likely to confront in the coming years. 
The difficulty is, we don't have another vehicle right now; and 
it will probably take several years to formulate one. In the 
meantime, we have an immediate crisis.
    So the question becomes, do you deal with the situation 
that we have and perhaps amend it, modify it, insist upon 
certain guidelines that ought to be followed or simply say 
let's wait until we can put together a new formulation for the 
future? And that is sort of the dilemma that we have right now.
    I can say that, with respect to South Korea, when I went 
there, they were very gratified. The new leadership was 
gratified to see that the United States was going to be 
supportive of helping them get through their current economic 
difficulties. I can tell you that Thailand feels the same way.
    So we have many countries that have been strong friends 
over the years who have looked to the United States for 
leadership. And the only vehicle we have had really is the IMF 
fund, and it has been important to their survival, and they are 
not out of the woods yet. They still have some very difficult 
decisions to make and some difficult domestic problems to 
encounter. So no one should feel relaxed about the situation 
throughout all of southeast Asia, particularly in Indonesia 
right now.
    I might point out that the IMF has withheld any further 
funding to Indonesia until such time as they are satisfied that 
some changes are going to be made. So, again, I suspect we can 
criticize and be critical of the way the IMF is situated today, 
but we don't have anything else right now, and there is a 
situation that I think demands immediate attention.

                     U.S. FORCE PRESENCE IN BOSNIA

    With respect to the mission in Bosnia, the mission hasn't 
changed. War criminals, for example, under Dayton, the U.S. 
troops were not to go out and hunt down war criminals, but if 
they were to come into contact with them and the situation, 
tactical situation permitted, they were, in fact, allowed to 
make arrests.
    Many of the war criminals have turned in voluntarily. We 
had 10 Croatians who surrendered early last fall. We had, most 
recently, three Serbs, indicted war criminals, who have 
surrounded voluntarily.
    So the momentum is all in the direction of this, seeing 
that the handwriting is on the wall, there is no statute of 
limitations, they are going to eventually come before The 
Hague. Frankly, they have seen this; and more of them are now 
starting to come forward saying, I would rather take my chances 
before The Hague than to be possibly accosted or apprehended by 
any of the Stabilization Force, SFOR troops. So the mission 
remains the same.
    The digging up of land mines. General Ralston could perhaps 
correct me on this, but we have dug up the land mines to 
protect our troops for force protection.
    We have not undertaken a mission of clearing the entire 
region of land mines. That is another subject I would like to 
talk to you about in terms of land mines legislation. There is 
a prohibition to take effect for fiscal 1999 that would ban the 
use of all mines on the part of the United States. That would 
put our troops in great jeopardy, and require us to increase 
our forces by several hundred thousand in order to compensate 
for the absence of those mines during that one fiscal period.
    So we have got a serious issue to address as far as land 
mines are concerned, but that is for another day.
    But I am not aware that we are using the funding for the 
repair of private buildings. That is something that I will have 
to look into in terms of what is being done. But that is not my 
understanding, and I will get a detailed breakdown for you for 
everything that the money is being spent for. I have asked Bill 
Lynn to travel to Bosnia to meet with General Clark to get a 
full accounting of how the money is being allocated for that 
region. But the mission remains the same.
    Mr. Livingston. Thank you.
    Mr. Young. Mr. Murtha.

                         DEFENSE BUDGET SAVINGS

    Mr. Murtha. When I asked the question before, it looked 
like to me that when I said the Defense Department may have 
some money hidden away, we have over the years found that the 
Defense Department is not always upfront with us about money 
that they have.
    For instance, I remember unobligated balances just happened 
to pop up one year of $4 billion, and inflation figures keep 
getting changed. For instance, one of the real pluses from what 
happened in Iraq is the stability of gas prices. If we hadn't 
gone into the Middle East, I am convinced gas prices would have 
dramatically increased if they thought Saddam Hussein was going 
to control them. This will obviously affect us back here and 
also will affect the Defense Department substantially.
    I think the price of gasoline and the fuel, which is such a 
big part of our economy. They tell me airlines are making a lot 
of money. Well, the Defense Department is buying fuel a lot 
cheaper right now, I would assume, so there is some money 
there. So when I say I hear rumors, this defense Committee 
staff has all kinds of ways of finding out things. Sometimes we 
are wrong; sometimes we are right.
    But do you have any money or have we finally run out of all 
the means we have had in the past in order to find money to 
offset this supplemental?
    Secretary Cohen. I would yield on the gimmicks question to 
Bill Lynn.
    Let me respond on the inflation savings, for example. There 
have been inflation adjustments. We don't call that. OMB calls 
that. But when we are allowed to keep inflation savings, that 
money goes for other things, such as increases in health care 
costs, increases in readiness, all the other things that we 
have been shortchanged on. We take that money and those savings 
for that year and put those into cost of life factors involved.
    So there is no giant pot that we have. We allocate it and, 
of course, you have an opportunity to pass upon that each year 
in the appropriations.
    Someone asked in the other body about this $27, I think, 
billion dollar windfall that the Department got over the FYDP; 
and we said, here is the money and how it is allocated for 
procurement. For example, we are going to meet our goal as far 
as getting up to that $60 billion mark that had been set by 
General Shali in the past. Here is the money, and we are now 
allocating for modernization. We take those inflation savings; 
and we allocate them; and you, of course, have to approve them 
each year.
    But I will yield to the comptroller to talk about gimmicks 
that have been utilized in the past by other administrations.
    Mr. Murtha. What we would like to know is, have we run out 
of all of those hidden surpluses that we used to use in order 
to balance the conference out at the end or in order to take 
care of supplementals?
    Mr. Lynn. Mr. Murtha, I think some people have the 
impression that there is a safe in the Comptroller's Office 
where all the extra money is hidden. I have only been there a 
couple of months, but I have thoroughly searched the office, 
and the safe isn't there.
    If we had to offset this supplemental, of course, we would 
look for anything we could find to ease the pain. I think it 
is, though, quite clear that for a $2 billion price tag there 
is no gimmick, there is no trick, there is no amount of money 
that will keep you from the kinds of things that the Secretary 
and the Vice Chairman described in terms of the impact on 
readiness, on modernization, on the overall quality of life of 
the troops.

                           BUDGET SHORTFALLS

    Mr. Murtha. Well, one of the things we get concerned about 
is when people testify before the Committee they always try to 
justify the budget; and, rightly so, because that is the budget 
that was sent up. But sometimes it gives us misleading 
information about really how much money you have available.
    For instance, last year, right after the problem at 
Aberdeen, I went there and several other Army bases to look at 
the situation; and I very quickly found out that they didn't 
have enough drill instructors, enough supervisors, enough 
training time; and I reported that to the Secretary.
    I also went down to the Training and Doctrine Command, 
TRADOC. TRADOC said, we have known that right along, but we 
didn't have the money. But when they appeared before the 
Committee, they didn't tell us they didn't have enough money 
for drill instructors, for training and for supervisors; and, 
consequently, it resulted in this problem.
    Those are the kind of things we have to know if we are 
going to make the appropriate decisions for the Department.
    There is no question in my mind, we have been hearing for 3 
or 4 years a readiness problem, a spare parts problem--
sometimes it is not as stark but as a whole. I went 4 years ago 
to Fort Hood, and I found no infantry in the Bradleys. I just--
and they said, well, there is infantry in the Bradleys in the 
front lines. Well, I went to Korea this year, and there is no 
infantry in the Bradleys.
    Now, you know, we are to the point, I think, where we are 
very close to being broke; and I think, Mr. Secretary, 
everybody in the Department has to be more straightforward with 
us. And I know you have been and the Comptroller. But we have 
to know the facts or we can't make the appropriate decisions.
    So I appreciate what you go through in trying to protect 
the administration when you get a certain allocation, but if we 
don't know the consequences, how serious they are, we certainly 
can't make legitimate judgments and make distributions that are 
absolutely essential to our national security.
    Secretary Cohen. Congressman Murtha, if I could respond, 
you know, when I came up to present the QDR last year there 
were complaints that, well, this is really a budget exercise, 
it is not really strategy driven. I took issue with that. It is 
strategy driven, but it is also within a, quote, constrained 
budget environment. How do I, as Secretary of Defense, put 
together a plan for the future in terms of how we are going to 
allocate our resources if I say we have unlimited budget 
authority here?
    I said $250 billion is probably as much as we are likely to 
see, absent a war or a conflict in the foreseeable future. 
Likely to see the same level plus inflation, given the fact 
that there is also a very strong movement on the Hill for a 
balanced budget. So I had to try to plan saying, ``Assuming 
that we had this amount of money, how do I allocate it?'' And 
that is always the problem.
    If we have a shortage of readiness, I take money out of 
modernization, I have to allocate it there. You take a look at 
modernization. You say, where is the investment? I say, okay, I 
have to put some more money back in here. When I have a limited 
amount and we, in fact, have a balanced budget environment, it 
becomes very difficult to maintain a static level of perfection 
in all of the accounts. So it does take a lot of management.
    General Ralston can perhaps talk to you about what we are 
trying to do in terms of how we deal with these issues as far 
as shortages are concerned, what is the real assessment. 
Because I have been concerned about that. Are we getting the 
real facts? Because Chairman Shelton, who is on his way back 
from the Gulf right now, will talk about anecdotal evidence. 
You get it, others go out in the field and get it, but is it 
filtering up through the system?
    General Ralston has been working, just came back from a 
long session with the JROC, and perhaps he could give you just 
a brief response on this issue. Because it is a problem. And we 
want to make sure that you get the facts, that I get the facts, 
so I don't have to say, oh, sorry, Congressman Murtha, we are 
totally ready and what you have heard is inaccurate.

                            READINESS TRENDS

    General Ralston. If I could address that, Mr. Chairman. We 
did look at this, and we have been looking at this at the Joint 
Requirements Oversight Council, along with senior leadership, 
to try to come up with a series of metrics, that can measure 
the readiness and the OPTEMPO and the PERSTEMPO on our people. 
And if we know what the real situation is, then we can take 
some management actions at our level.
    For example, the Airborne Warning/Control System, AWACS 
aircraft, we only have 33 AWACS airplanes. One of those is a 
test airplane. Four are always in the depot for maintenance. 
Four are in the schoolhouse. Pretty soon you are down to only 
about 20 or so airplanes that you can use.
    We know that we can keep about nine of those airplanes 
deployed at any one time. If you go above that, then you are 
driving your people in the ground.
    So, today, we have five airplanes in the Gulf. We have 
three airplanes in Turkey enforcing the no-fly zone over 
northern Iraq. We are already at eight airplanes there. That--
so we have to cut back.
    So what have we done? We have drastically cut back on the 
AWACS flying counterdrug operations in Central and South 
America, not something that we want to do, but we have to make 
some tough choices in order to not really impact our people and 
impact our readiness.
    Mr. Murtha. Let me just say one last thing, that I think 
this is as honest a budget as we have gotten. And when I say 
honest, I mean I think it has a good balance; and I think the 
Chairman would agree. We have looked at this and we probably 
won't make as many changes as usual because it is such a good, 
solid budget with what you have got to work with.

                           BALKAN DEPLOYMENTS

    Mr. Young. I certainly would concur that it is a better 
budget than we have seen in recent years, more realistic. 
Unfortunately, we are not going to have the additional funds to 
add for fiscal year 1999 that we have had in the past.
    A quick question on Kosovo, Macedonia, et cetera. What I 
see developing here is another not exactly like Bosnia, but we 
are getting requests for extending U.S. presence there. And, of 
course, the U.S. presence in Macedonia is under the sponsorship 
of the United Nations, but they are still U.S. troops that are 
there.
    Several members of this Committee, as I said, went to 
Bosnia this past weekend; and we were impressed with the job 
that our military forces have done. They have pacified the 
country. They have done a good job.
    From a military standpoint, I think we have got an A-plus-
plus-plus. The concern, though, is the only reason that we have 
done that is because of the presence of the United States.
    We conducted a townhall meeting in Brcko. We had 
representatives from the Muslim population and the Serbian 
population. It was in a rather small room, but we started out 
in a very friendly way. But, Mr. Secretary, about 10 minutes 
into that session, they were up pointing the fingers and 
yelling at each other and shouting at each other, and they were 
ready to fight again.
    We were there, so they didn't get into violent fighting. 
But if we weren't there----
    Secretary Cohen. Could have used you at Ohio State.
    Mr. Young. Well, I don't mean me personally. I mean the 
United States forces. Because they were there as well. And Ohio 
State is probably something most of us would like to forget 
about.
    And I understand that the elections are coming in 
September, and I think we really can't make a judgment there 
until we see how those elections are conducted and whether or 
not the people in the country would allow the results of the 
election to be ratified and the people who are elected to be 
actually put in place and hold the offices. If that doesn't 
happen, then I think we have got real serious trouble, and the 
$487 million we are talking about now will just be another down 
payment.
    So I think we have got to get really serious about how we 
deal with situations like Bosnia or Kosovo, which could become 
even more serious because of international implications.
    You don't have to respond if you don't want to. You can, if 
you would like.
    Secretary Cohen. Well, I will respond briefly, Mr. 
Chairman.
    With respect to Bosnia, could it go the other way, could it 
go south quickly? The answer is, sure. Are the trends that we 
see today still in the right direction? I think the answer is 
an overwhelming yes, as a result of our presence and our 
leadership and our command.
    What you see today you would not have believed 2 years ago. 
There has been a dramatic change, and we have been primarily 
the ones who have generated that. We have had the support, 
obviously, of the NATO alliance; and we shouldn't minimize 
that. But it has been American leadership that has produced 
that.
    It is always possible for the parties to break apart, start 
shouting, start shooting at each other. And we would say, have 
we made a good effort and what is the consequence of our not 
being involved here? I think that we have to look at the 
opposite. If we say, let's pull out tomorrow, which this 
committee, this subcommittee, is not recommending; but if we 
were to leave tomorrow, we can pretty much predict what would 
take place. But if we give those institutions a little more 
opportunity----
    And I can't define it. You asked about this in your opening 
comments, can we define when that time will come? But, as you 
see, things start to take place. There is a slow buildup, and 
suddenly you are seeing things take place on an accelerated 
basis that would not have been imaginable a year ago or even 6 
months ago. So no one can really predict the future to you, for 
you, but what we can say is that the trends are in the right 
direction.
    With respect to Kosovo, we are all concerned about that. 
The Europeans are concerned about that.
    I talked to the Italian Minister of Defense today dealing 
with the Aviano incident, and that is a report that will be 
coming out tomorrow on that tragic event.
    But the first question, of course, became we should look 
very closely at what is taking place in Kosovo, because it 
could spread all the way into Albania, involving Greece and 
Turkey, and you could have a real serious situation on our 
hands really quickly. So it is going to require some diplomacy.
    As you know, Secretary Madeleine Albright has been very 
engaged, just came back from Europe urging restraint on both 
sides, on the part of Kosovars and also on the part of 
Milosevic; and there may be more sanctions that flow from his 
failure to restrain the Serbian police.
    But we have to be as vigilant and as involved as we can, 
but this does not mean that we have to be militarily engaged in 
every incident. So we are hoping that our European friends will 
also take some initiative here and that collectively we can 
perhaps hold this back from becoming a major problem.

                                 KOSOVO

    Mr. Young. Mr. Secretary, while we were in the region, I 
went to Macedonia and I visited with the foreign minister; and 
we went to the border between Macedonia and Kosovo to one of 
the outposts there. They want an American presence there, a 
much larger American presence, because they are frightened.
    There has been some indication, at least in the media, that 
we might be sending more Americans there as Americans. And this 
may be something that would have to be done. But it just seems 
to me that before these commitments are made--since you have 
been Secretary, we have had much better communication and 
consultation between the executive and the legislative, but so 
far, we have had to come up with the money after the fact, 
after the commitment was made. I think many of us would feel 
better if we were in on the takeoff as well as the landing when 
the bill came in.
    Secretary Cohen. I would agree with that.
    Mr. Young. Mr. Dicks.

                 FISCAL YEAR 1998 SUPPLEMENTAL REQUEST

    Mr. Dicks. Thank you, Mr. Chairman.
    Let me make sure I have an understanding of what is 
requested here. As I understand it, the President is requesting 
that the DoD fiscal year 1998 unfunded requirement be met by 
nonoffset emergency supplemental appropriations. I think we all 
understand that.
    Similarly, the President is proposing a nonoffset emergency 
fiscal year 1999 budget amendment to fund the unanticipated 
costs of extending the mission in Bosnia through the fiscal 
year. The administration included an allowance in the 
President's fiscal year 1999 budget of $3.2 billion to cover 
the cost of contingencies like Bosnia, Southwest Asia and 
natural disasters.
    So we not only have a budget amendment for the 1998 budget, 
but an amendment to add $3.2 billion to the 1999 budget?
    Secretary Cohen. I will let Bill Lynn respond to that.
    There would be an allowance in the 1999 budget of $3.2 
billion for Bosnia and Southwest Asia. That is an allowance for 
unanticipated contingencies. As such, that could be drawn upon, 
as I understand it.
    Bill?
    Mr. Lynn. That is right. As we were putting the budget 
together, we knew that there would be additional costs in 
Bosnia and Southwest Asia; but, as the Secretary indicated 
earlier, we hadn't had a final decision. We did not know the 
exact amount, and they had not been anticipated within the 
balanced budget agreement framework in which the defense 
numbers were settled on.
    So what we did, working with OMB, was identified an 
allowance in the 900 section of the budget. The number you said 
is absolutely correct, $3.2 billion. That was primarily 
intended--and I think OMB has in mind the first call on that 
would be Bosnia and Southwest Asia.
    Of that $3.2 billion, essentially this budget amendment 
that has come forward to you in the last week offered to the 
committee that $1.9 billion of that $3.2 billion is what would 
be required for the 1999 Bosnia costs. So they were covered in 
the budget submission in February, the $3.2 billion allowance. 
We are now giving you the specifics on Bosnia.
    Mr. Dicks. That is part of the 1999 budget. We are not 
asking for $3.2 billion on top of the 1999 budget?
    Mr. Lynn. No. That was included in the 1999 budget. We 
provided the specifics on Bosnia just in the past week. We 
didn't have them prior to then.
    Mr. Dicks. So if you don't get this money or it has to be 
offset, you are going to have to go out and literally tax every 
base throughout the country, in terms of cutting back on 
training, cutting back on real property maintenance----
    Secretary Cohen. Depot.
    Mr. Dicks [continuing]. Hiring of civilians, doing overhaul 
repair work on ships. I mean, all of those things will happen 
and that will lower the readiness of our remaining forces that 
are nondeployed. Is that not correct?
    Secretary Cohen. That is correct.
    General Ralston. Right.
    Mr. Dicks. And, General Ralston, you think this is a 
serious problem?
    General Ralston. Congressman Dicks, I think it is a very 
serious problem if we are not given the supplemental.
    Mr. Dicks. But if it is offset, it comes right out of your 
hide.
    General Ralston. If it is offset, it comes right out of our 
hide. It is a very serious issue, both for our readiness and 
for our modernization efforts.

                     ADDITIONAL BASE CLOSURE ROUNDS

    Mr. Dicks. What bothers me is that we have not only this 
issue but another issue that the Secretary presented to us in 
BRAC, and that is the necessity for two additional rounds of 
base closure. You know, if we don't do that in the 
Supplemental, then a situation would exist in which we would 
not have the money for modernization and the other things that 
we think we have to do in the future. Isn't that correct?
    Secretary Cohen. That is correct. I mean, it is a problem--
it won't impact upon you, Congressman Dicks, or most of us 
here. But the long-term implications are that, as we move into 
the next century, we are talking about procurement items. If we 
don't have a reduction in the overhead, then we will not have 
the funds necessary to make the investments for the new 
technologies in 2010, 2012, in that time frame.
    Mr. Dicks. So both of those things are important in terms 
of looking at the future for defense modernization. That has to 
affect us getting up to $60 billion, though, doesn't it, at 
some point, if we don't do the first round of BRAC?
    Secretary Cohen. In 2001, we will hit the $60 billion mark 
as far as allocation for investment in the future. But that can 
be sustained only so long into the future. If you say that in 
the year 2003, 4, 5, and 6, as you start get down that track, 
that we are not making the kind of overhead reductions 
necessary, then you won't be able to sustain it. That is 
correct.
    Mr. Dicks. Congressman Murtha and I both came on this 
Committee in 1979, and we had very serious readiness, the 
hollow force, retention problems; and we underfunded the 
military. Then, all of a sudden, people started leaving in 
droves. We had problems with pay and benefits. We had to then 
come back, starting in about 1980, and put a lot of money back 
in to try to build back up our force structure and our 
readiness; and we had a lot of units that would be at C-3 and 
some possibly even at C-4 levels.
    So I think this is a very critical moment; and I just hope 
that we can build the support in the Congress for supporting 
this supplemental. And I don't think it should be offset. We 
are on the verge of a balanced budget, if we don't have one, in 
fact, and I think this will hurt us if we can't get this done.
    I just would urge those people who always say that they are 
in favor of a strong defense, that once in a while you have got 
to step up and vote for defense. I think this is going to be 
the biggest vote this year, on whether you are for the Defense 
Department and for the kids who are deployed. I just hope that 
we can get the support, and I hope it will be very bipartisan. 
I know that Mr. Murtha and I will do everything we can to help 
you in this respect. But I think this is very crucial.
    Thank you, Mr. Chairman.
    Mr. Young. Mr. Lewis.

                         SECTION 900 ALLOWANCES

    Mr. Lewis. Thank you, Mr. Chairman.
    I am not sure, Mr. Secretary, exactly what I heard in your 
exchange with Mr. Dicks. I think General Ralston, you were 
saying that--or maybe it was you, Mr. Lynn--that there was a 
$3.2 billion allowance in the 1999 budget request?
    Mr. Lynn. Not in the Defense budget request, but in the 
Federal budget request.
    Mr. Lewis. The Federal budget request?
    Mr. Lynn. Yes. It is in the 900 section of it.
    Mr. Lewis. The 900 section is what?
    Mr. Lynn. It is just the allowances section.
    Mr. Lewis. So you are essentially saying it is in this 
request.
    Mr. Lynn. If I could explain, sir?
    Mr. Lewis. Yes.
    Mr. Lynn. The $3 billion was put in the allowance section 
because we didn't have the specifics of what the Bosnia 
deployments would be at that time. And what we planned to do is 
what we have done, is to come forward with the specific budget 
amendment saying how we would lay out the planned expenditures 
for that $3.2 billion. The Bosnia request would be $1.9 billion 
of the $3.2 billion.
    Mr. Lewis. Speaking of Bosnia just for a moment, we have 
had a lot of discussion regarding how long we have been in 
Bosnia--longer than most of us anticipated. We had those 
discussions not only during the time that you have been 
Secretary but also when you were in the U.S. Senate, as a 
matter of fact.
    One of the rationales for Bosnia and our presence there 
involves the very thing that the Chairman was talking about, 
the need for stability. When you looked at Kosovo and 
Macedonia, and all of us talk about the history of a lack of 
stability there and the problems when we have ignored it in the 
past.
    I am trying to figure out in my head, of the $1.9 billion 
that is now being requested here, how much of that relates to 
stability to the south, to places like Macedonia?
    Secretary Cohen. That $1.9 billion really is----
    Mr. Lewis. Just for Bosnia?
    Secretary Cohen. It just for Bosnia.
    Mr. Lewis. I assume we are going to have expenses that you 
are beginning to anticipate for ongoing activity just south of 
Bosnia?
    Secretary Cohen. Macedonia.
    Mr. Lewis. Yes. Do you have any idea of what those might 
be?
    Secretary Cohen. No.
    Mr. Lewis. Okay. I kind of thought that that was the case.
    One of the things that I wanted to raise in connection with 
all of that is that----
    Secretary Cohen. I mean, it is hard--it is hard to predict, 
if there is going to be a riot that takes place in Kosovo and 
the Serb police will come in and crack down, whether or not the 
Serbian Army is going to be supplying--I mean, all of that is a 
matter that you really can't anticipate. You hope that it won't 
take place. If it does take place, you look to discourage it in 
the future. But no one can give you an assurance of and put a 
price tag on it, in terms of looking into the future as to what 
it is going to cost.
    So that is part of the era in which we are living today. It 
is an era that has a lot of instability, a lot of potential for 
ethnic conflict and breakout.
    Mr. Lewis. Which is precisely where I was going to go next. 
It seems to me that that portends not just to supplemental or 
allowances that may be used for contingency. It suggests that 
this is a much longer term thing than this year's budget, next 
year's budget.
    Secretary Cohen. Sure. You know, it is one of the great 
challenges for all of us. And I say all of us because you are 
the coequal partner. You may even be the senior partner. 
Because you control all the purse strings, and we are just the 
junior partner in this effort.
    But if you look and try and say, where do we go with our 
strategy, the QDR? I spent a lot of time working on that, and 
you will find that, well, there are some people who disagree, 
that the QDR really hasn't looked far enough into the future. 
What we ought to do is take more risks today, that we ought to 
have a substantial reduction in the size of our forces, take 
the savings and put it into new technologies for the future.
    I think that is great to do, except for one thing: How do 
we deal with the problems that we have today? That if you take 
and cut down the size of the force, you would have significant 
savings, you can put those savings into new technologies, but 
you still have a Southwest Asia to contend with it, be Iraq or 
Iran. You still have Korea. We don't know how that is going to 
unfold.
    So you have all of the current missions that we have that 
no one I know of is willing to give up in the short term. Plus 
you have all of this rise of ethnic tension and conflict and 
potentiality that is going to require us to, on a year-by-year 
basis, to say, where are we going with our defense budget?
    I think the issues being raised here are important ones. I 
think it will be important, next year, for example, when the 
walls come down between--in the balanced budget agreement, as 
to whether or not you feel it would be possible to get more 
money out of domestic spending and put it over into defense, or 
whether or not there will be those who will argue that we 
should be cutting back on defense and putting it into social 
programs. I wouldn't want to take bets on that right now.

                  BUDGETING FOR CONTINGENCY OPERATIONS

    Mr. Lewis. Which is the next place I am going after this.
    But, Mr. Chairman, I hear from this discussion, really, the 
Secretary saying--and I know that Mr. Lynn, certainly General 
Ralston, wouldn't be contradicting it--you are really saying we 
are going to be having this kind of budgetary commitment within 
a significant piece of our defense expenditures for some 
considerable time.
    Secretary Cohen. I think everyone who has looked at the 
future has seen that we are likely to see, quote, asymmetrical 
threats. You are not likely to see someone challenge us head 
on. There aren't many countries that could do that. But you are 
likely to see not only asymmetrical threats to our security but 
you are likely to see a rise in the kind of tensions and 
conflicts that we are witnessing now in various parts of Europe 
and over in the Caucasus areas. So that is a potential.
    How do you budget for that? How do you prepare now for 
that? That is a debate that needs to take place as to whether 
or not the Congress of the country and the administration are 
willing to say, we can budget X amount to have as a contingent 
fund to take care of these unknown possibilities.
    I think we would be hard-pressed--I am not sure that the 
Congress is going to give that kind of contingent funding to 
any administration, other than saying that we want to have 
control of the purse strings, and we will play it year by year. 
If you need money, you will come back and you ask us for it; 
and, hopefully, we will give it to you. But I don't see 
Congress, at least based on my experience, saying, you know it 
is an unstable world and we think you need about $10 billion to 
$15 billion as a little wedge over there to protect yourself in 
the future.

                        FORCE PRESENCE IN BOSNIA

    Mr. Lewis. I don't think I can have time to go back to the 
reverse fire walls which we are going to take each other to in 
a moment, but could you answer a specific about Bosnia and the 
ongoing presence of our troops but also having others take over 
responsibility?
    The existing land mines are a very, very big problem. I 
understand that the Slovenians are involved in a fund that 
relates to mine removal, and we are going to participate in 
that in some way. Are you going to be asking for a 
reprogramming or otherwise in connection with that activity?
    Secretary Cohen. I can't give you an answer on that right 
now, but I will get back to you before--within the next 24 
hours or so to see where that is.
    [The information follows:]

    No. Our understanding is that some Member of Congress may be 
interested in earmarking funds from the Emergency Supplemental for the 
Slovenia Trust Fund. We welcome new support for demining in Bosnia as 
long as it reinforces Bosnia's efforts to develop a self-sustaining, 
indigenous demining capability.
    The Government of Slovenia (GOS) is partnering with Dyncorp, a U.S. 
contract or, to launch a new demining initiative in Bosnia. Slovenia 
has created a trust fund which would serve two purposes: first, to 
demine fields in Bosnia; and second, to employ and train Bosnians to 
establish their own civil protection unit. The GOS is asking donors, 
including the U.S., to contribute to this fund. Slovenia views the 
project with great importance, as it may demonstrate to the 
international community their decision to contribute to the stability 
and development of the Balkan region, thus aiding the Slovenes' quest 
for NATO membership.
    The Slovenian project is still in the initial stages of 
development. We have serious concerns about where Slovene support may 
be most helpful. Victim's assistance appears to be an area where 
Slovenia may be able to help the Bosnians.
    The international community is successfully assisting the Bosnian 
government in establishing a self-sustaining demining capability. We 
have encouraged the Slovenes to consult carefully with the Bosnians to 
ensure there is close coordination of effort.
    It is too early to tell if something worthy of U.S. contributions 
will emerge from this process. Therefore, we believe it is premature to 
commit funding to the Slovenian Trust Fund. We certainly oppose any 
effort which draws funds away from far more important programs in 
urgent need of resources now.

    Secretary Cohen. Obviously, we want other countries who 
have expertise in a particular area, if they want to contribute 
to this effort in Bosnia, we are happy to have that 
contribution. Some of it may be coming in the form of demining 
expertise; and, to the extent that that is helpful, then that 
will help the economy get under way.
    If you look at the farmers, for example--Chairman Young has 
been there and you have been there, but if you go out into the 
fields you will see farmers who are now planting crops.
    Mr. Lewis. We don't need to have pictures of kids with legs 
blown off to determine that we need a reprogramming.
    Secretary Cohen. I understand. But we are committed to 
helping make that as secure an environment as possible. To the 
extent that we can get others involved in that effort, we want 
to do so.
    Mr. Lewis. Mr. Chairman, I just would mention to you that 
it would be kind of fun to pursue with especially Secretary 
Cohen the other business of fire walls the other way. We used 
to put up fire walls to protect defense.
    Secretary Cohen. That is going to be an issue everyone will 
contend with next year.
    Mr. Lewis. Okay.
    Mr. Young. Mr. Hobson.

        FINANCIAL COMMITMENTS TO OVERSEAS CONTINGENCY OPERATIONS

    Mr. Hobson. Thank you, Mr. Chairman.
    Mr. Secretary, I have got a problem. You know, you have a 
$258 billion budget; and the taxpayers in my district say, gee, 
another $3 billion we are going to foot the bill for and there 
is nobody coming in here with any offsets? Or nobody wants to 
offset. Somehow, this is an emergency. It is hard for my 
taxpayers to look at that.
    The other thing is, when the previous administration went 
in and had an excursion into Iraq, they got some help in paying 
for this. One question is: Is anybody helping pay?
    And I see on here, Bosnia is point five billion. I don't 
know what the French budget is or what the German budget is for 
that, but I would like to know sometime for the record, and I 
would like to know if anybody else is helping out.
    [The information follows:]

    The following chart depicts current contributions to SFOR from all 
contributing nations:

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                                                                  Percent
----------------------------------------------------------------------------------------------------------------
                                             MND (ND) (U.S. Sector)
----------------------------------------------------------------------------------------------------------------
Denmark...........................................      1,000        2.83  Mech Infantry Battalion in Nordic
                                                                            Brigade.
Estonia...........................................         41        .116  Infantry Platoon in Danish Battalion.
Finland...........................................        341        .968  Mech Battalion.
Iceland...........................................          6        .017  Security.
Latvia............................................         39        .110  Infantry Platoon in Danish Battalion.
Lithuania.........................................         40        .113  Infantry Platoon in Danish Battalion.
Norway............................................        615        1.74  Infantry Security Co.--SFOR HQ
                                                                            Battalion--Nordic Brigade.
Poland............................................        400        1.13  Mech Infantry Battalion in Nordic
                                                                            Brigade.
Russia............................................      1,400        3.97  Airborne Brigade.
Sweden............................................        480        1.36  Mech Infantry Battalion in Nordic
                                                                            Brigade.
Turkey............................................      1,520        4.31  Mech Infantry Brigade.
United States.....................................      8,500       24.13  1st Armor Division.
----------------------------------------------------------------------------------------------------------------
                                            MND (SE) (French Sector)
----------------------------------------------------------------------------------------------------------------
Egypt.............................................        270        .766  Mech Infantry Battalion in French
                                                                            Brigade.
France............................................      2,500        7.09  French-German Brigade.
Ireland...........................................        150        .141  MP Company--SFOR HQ.
Italy.............................................      1,790        5.08  Mech Infantry Brigade.
Jordan............................................         10        .028  Special Forces Contingent.
Morocco...........................................        650        1.84  Infantry Battalion in Spanish
                                                                            Brigade.
Portugal..........................................        320        .908  Airborne Battalion in Italian
                                                                            Brigade.
Spain.............................................      1,550        4.40  Mech Infantry Brigade.
Ukraine...........................................        380        1.07  Mech Infantry Battalion.
Germany...........................................      2,470        7.01  French-German Brigade.
----------------------------------------------------------------------------------------------------------------
                                              MND (NW) (UK Sector)
----------------------------------------------------------------------------------------------------------------
Bulgaria..........................................         30        .085  Engineering Construction Platoon,
                                                                            Attached to Netherlands Battalion.
Canada............................................      1,250        3.54  Mech Infantry Battalion.
Czech Republic....................................        640        1.81  Mech Infantry Battalion.
Malaysia..........................................        925        2.62  Mech Infantry Battalion.
Netherlands.......................................      1,080        3.06  Mech Infantry Battalion.
United Kingdom....................................      5,000       14.19  7th Armored Brigade.
----------------------------------------------------------------------------------------------------------------
                          Multinational Combat Support Elements--SFOR Logistics Command
----------------------------------------------------------------------------------------------------------------
Albania...........................................         40        .113  Attached to German Brigades below.
Austria...........................................        230        .653  Transportation Co. in Beluga
                                                                            Battalion.
Belgium...........................................         50        .141  Support Element.
Germany...........................................        850        2.41  Logistics, Medical, Transport Brigade
                                                                            Battalion, Engineering Battalion,
                                                                            Aviation Regiment (these numbers are
                                                                            reflected in the Germany totals
                                                                            above).
Greece............................................        210        .596  Transportation Co. in Beluga
                                                                            Battalion.
Hungary...........................................        255        .724  Engineering Battalion.
Luxembourg........................................         18        .051  Transportation Platoon in Greek Co.
Romania...........................................        200        .567  Engineering Battalion.
----------------------------------------------------------------------------------------------------------------
                            Commonwealth Nations Contributing to United Kingdom Total
----------------------------------------------------------------------------------------------------------------
Australia.........................................          5        .014  Part of Armored Brigade.
New Zealand.......................................          8        .022  Part of Armored Brigade.
South Africa......................................          3        .008  Part of Armored Brigade.
----------------------------------------------------------------------------------------------------------------
                                                      Other
----------------------------------------------------------------------------------------------------------------
Slovenia..........................................         50        .141  Security forces based in Slovenia.
----------------------------------------------------------------------------------------------------------------

    The final size of the follow-on force is being determined by the 
NATO force generation process that is on-going at this time. Different 
accounting systems and rules make it virtually impossible to accurately 
report other country expenditures in Bosnia. Additionally, most 
countries are reluctant to openly report their military expenditures.

    Mr. Hobson. Here we are, once again, going around the world 
being the peacekeeper and the taxpayer of this country paying 
the bill.
    Then, lastly, I would like to ask you, sir, have you seen 
Mr. Greenspan--you talked about Mr. Greenspan before. I sit on 
another Committee that has Mr. Greenspan come in every once in 
awhile, it is not the Banking Committee, and he made some--
normally, sometimes you have a little difficulty in following 
his discussion, because he goes around and around; but he was 
rather blunt with the Budget Committee about what he thought, 
at least at that point, unless you all have gone back to talk 
to him and gotten some different information, about what he 
thought about doing a supplemental without offsets would do to 
the markets of this country, the financial markets in this 
country.
    And I am very concerned about that. I don't know whether 
the administration has discussed that before they get into the 
emergency of this supplemental or not, but I will tell you, I 
have great difficulty. I want to support the military. I think 
we are going to be in Bosnia a long time. I did not want to go 
there. I think we are stuck there. We are going to have a hard 
time getting out.
    I have been there twice, and it is not going to be easy to 
get out of there. You probably won't get out until there is a 
change of administrations and it becomes a situation where it 
is a political thing; and, even then, I don't know whether you 
can really get out.
    Because, as he said, I have been in a room where those 
people don't like each other; and I don't think they are going 
to like each other 5 years from now any better than they like 
each other now, as we go along. We will have some peace in the 
meantime, and we will save some people at the cost to the 
American taxpayer. And nobody in Europe supporting our payments 
over there, nobody, as far as I can tell, helping us.
    You know, yeah, we may get a little smaller reduction in 
the gasoline prices, but so are the Japanese and a lot of other 
people.
    But who is footing the bill again? The American taxpayer 
once again. And if we do this without offsets, we are back 
playing the old game that we have been playing for 40 years 
that I thought we had gotten away from or I hoped we had gotten 
away from.
    You can respond to my outrage if you want or my concerns. I 
hope it is not outrage. I hope it is reasoned concern.
    Secretary Cohen. You began on a good note when you said you 
had a problem, and I would like to try to address that.
    First of all, the other members of this Committee, at least 
I detect from their line of inquiry that they are concerned 
that we are not spending enough on defense and so when you say 
to your taxpayers $258 billion, if you look at that as a 
percentage of our Gross Domestic Product, GDP, we are down to 
one of the lowest levels that we have ever been since World War 
II. So that is not an extraordinary amount of money to be 
allocating for the defense of this country, given the fact that 
we do have global interests.
    I am frequently asked are we the world's policeman? My 
answer has been, no, we are not the world's policeman. We just 
don't want to become a prisoner of world events. Richard Haas 
of Brookings has phrased it somewhat differently. He refers to 
us perhaps as the reluctant sheriff.
    We are not over in the Gulf because we are doing the Gulf 
states a big favor. We are over there to protect our interests.
    We have an interest in making sure that Saddam Hussein 
doesn't stand astride of the oil wells of that region. If you 
think we have a problem in our economy, which I don't think we 
have right now, imagine what that will do to oil prices and to 
its availability and to its instability in the region, what 
that would do to the world economy, including right here at 
home.
    So when constituents--and having represented them for 24 
years in Congress, I understand. But you will also have to 
explain to them the consequences of not acting, that we are not 
there doing a favor for the Gulf states or anybody else. We are 
over there to protect our interests. To the extent that we can 
get contributions, yes, the Saudis and the Kuwaitis, between 
them I think they have come up with between $400 million and 
$500 million that are supporting on our day to day--our year-
to-year efforts over there. Could we do more? We would like to 
do more. The Chairman of the Joint Chiefs is coming back, 
having visited the Saudis and Kuwait. He sent me a note just 
yesterday indicating that they are making some rather 
significant contributions to force protection, to other things 
that are important to us, but recognizing it is in our interest 
to be there.
    You mentioned Bosnia. We have got the NATO countries 
involved and they are carrying their share as well. You 
mentioned Germany. How many here on this committee would have 
thought 5 years ago that German troops would be in Bosnia, not 
to mention Russian troops but German troops? I recall 
addressing the Werkunde conference that I attend every year and 
I was chastising the Germans because at that time the Germans 
said our position is we cannot go to any area that we occupied 
during World War II, which took care a large part--much of 
Europe at that point. And my comment was, you cannot hide from 
history but you can't hide behind it, either. And we had the 
support then of Volker Ruehe, the Minister of Defense, and they 
were appealing an issue to the Supreme Court to get a ruling 
and the Court finally ruled that, yes, they could have German 
personnel aboard our AWACS in Bosnia.
    We have come a long way since that time. They have now got 
3,000 troops.
    Mr. Hobson. Is there any money?
    Secretary Cohen. They are paying for their troops to be in 
Bosnia. They have 3,000 there and that is a pretty significant 
contribution. And as we are coming down in our numbers they are 
going to hold to where they are. That is another commitment 
that they have made.

                           REFUGEES IN BOSNIA

    Mr. Murtha. What about the refugees?
    Mr. Dicks. What about the refugees? There are 2 million 
refugees, aren't there?
    Secretary Cohen. Well, in addition to their absorption of 
all the refugees, they are very concerned about that and they 
would like to see a resettlement of those refugees. They have 
also been helpful in putting together this special unit so that 
we can get some trained personnel who can serve as a buffer so 
we don't get our SFOR forces into the kind of day-to-day 
conflicts that could arise. So they are making contributions in 
many ways. So we are not there alone. I think that needs to be 
pointed out.
    Peacekeeper of the world, we are not out to be the 
peacekeeper of the world. Albania had a very serious situation 
this past year. They had to deal with it pretty much on their 
own. The Italians were involved and others, but we didn't go 
rushing in. We have to be very selective of where we go. But if 
you look at the potentiality, if you start measuring this in 
terms of costs, let's suppose we weren't in Bosnia right now, 
let's suppose that the hatred that has been there for so many 
centuries were to erupt and spread like a burning fuse going 
down through Macedonia, into Kosovo, into Albania, into Greece 
and Turkey. What do you think the costs would be for the United 
States at that point if you measure where we are today against 
that potentiality?
    It might happen in any event. We are hoping that it won't.
    Mr. Hobson. I was going to say it might happen anyway.
    Secretary Cohen. It might. But we have done something to 
forestall that, at least for the time being, and perhaps we 
will be successful in preventing it from spreading. But if you 
allow it to spread and then you say, we have got another 
potential involvement in the European theater, we have had 
twice in the 20th century, the costs involved would dwarf 
anything we are talking about here in this emergency 
supplemental or indeed what we are spending for all of Bosnia 
in that region.
    So I think we have to have that as part of the equation as 
we look in terms of why are we spending so much? If you look at 
the defense budget, in terms of percentage of our GDP, it is 
not that high. It probably should be higher unless we are 
willing to do, what? That is to cut back on the level of 
commitment that we have got in the world.
    Now, where do you want to go? Would you like to pull our 
troops out of Korea? Most people would say, let's don't take 
that chance at a time when the North Koreans are at the 
bargaining table now, at least we have got them to talk. Would 
you like to pull out of Southwest Asia and leave it to Saddam 
Hussein and the Iranians to determine what the future of that 
region should be?
    Should we simply pull back from our forces in the Asia 
Pacific region? We could do that, but that certainly would not 
lend to stability in that region. You might find it being 
filled by other countries who don't have our interests at 
heart. So as you start to look around the globe, we could 
forget about the drug effort, the antidrug effort in this 
country and say, forget about the AWACS, we don't need it 
anymore. Just let the drugs keep coming in. You could do all of 
that and say let's just isolate or insulate ourselves in the 
continental United States.
    I don't think that is a wise decision to make. Some make it 
but that would not be my argument.
    So we have a burden to bear and as a result of bearing it 
to date, we have prosperity, which is unimagined, I think, in 
most of the world. We have still security. We have liberty. So 
we are in relatively good shape, notwithstanding all of the 
challenges we face from the drugs, from chemical and biological 
potential attacks in the future. All of those are out there but 
we have done rather well, given the fact that we have made this 
kind of commitment to be a global power.

                     IMPACT OF SUPPLEMENTAL OFFSETS

    Mr. Hobson. What about Greenspan?
    Secretary Cohen. About Greenspan?
    Mr. Hobson. What about his comments before the Budget 
Committee?
    Secretary Cohen. I haven't seen his comments.
    Mr. Hobson. Has anybody down at the White House seen it?
    Secretary Cohen. I am sure they talk to him on a regular 
basis. I don't happen to be talking to him on a regular basis, 
but the fact is, I am not aware that this amount of money would 
suddenly cause instability in the marketplace to the point that 
it would jeopardize our prosperity.
    Mr. Hobson. Well, I think there is a difference--at least 
if I understood what he said on the Budget Committee, you have 
a difference of opinion with him. I also think we could find 
offsets, maybe not necessarily in the military but I think 
there is plenty of places to find offsets, and I think it sends 
a wrong signal to this country not to even try for the offsets, 
because I think we have convinced this country that we are 
going to be fiscally responsible as we administer this country. 
The President has said that. Everybody has said that. And to 
start down this road, things become Christmas trees. They 
become easy. And it just seems to me the wrong place to start 
off, to start off without even attempting anywhere to find 
offsets. It is not what I think is--and I will stop here, Mr. 
Chairman--in good fiscal responsibility to the citizens of this 
country, and especially when Chairman Greenspan came before the 
Budget Committee with such a straightforward statement on this 
matter. Unless that is addressed I have got a hard time voting 
for this in the manner in which it is being presented.
    I just wanted to share that with you. I think you are doing 
a good job.
    Secretary Cohen. We can get offsets in the Defense 
Department. We have made that clear. But I am not sure it is 
the kind of thing that anybody would want to support. Namely, 
we could take it out of personnel. We could take it out of our 
readiness. We could take it out of depot maintenance. We could 
take it out of delaying some procurement. We could do that. I 
think it would have a major impact.
    Mr. Hobson. I don't think it should be totally out of the 
Defense Department. I am not arguing that, but I am just saying 
to say we can't find offsets and we are going to walk away and 
go back to the old way and just at the very time when we have 
got the glimmer--and the public doesn't even believe it yet, 
under the way we cook the books, that we have now got a 
balanced budget. To go out and do this seems irresponsible to 
me, that is the position that I have taken and you guys have a 
different position.
    Secretary Cohen. If you can persuade your colleagues to 
take it out of domestic funding and put it into defense, I 
think that that would be admirable, if you think that is a 
possibility.
    I haven't heard many on the Hill or elsewhere advocating 
that we do that. But if that is a political reality that you 
can achieve, you can talk about it but can you achieve it, 
then, fine. We are faced now with a situation where in 30 days 
we have got to start now cutting back on various readiness 
aspects of our forces. We are starting to, cutting back on 
training, cutting back on depot maintenance. That is going to 
start in 30 days. But if you think there is a reasonable 
prospect of taking money out of nondefense programs and putting 
that over into these.
    Mr. Hobson. We are going to try.
    Mr. Young. Mr. Bonilla.

                         QUALITY OF LIFE ISSUES

    Mr. Bonilla. Thank you, Mr. Chairman.
    Secretary, as the Chairman mentioned in the beginning, we 
had an opportunity to visit Bosnia over the weekend and we are 
very proud of what our troops are doing there. I for one am 
going to try to do whatever I can to get the military every 
dollar it needs. But I do have a very fundamental question 
about the policy that we have with peacekeeping missions around 
the world. I sat at lunch time with some of the troops at Camp 
McGovern, and a fellow sat to my left from Tyler, Texas who 
told me that because of the number of months he has been 
deployed over the last couple of years his wife is now going to 
leave him and, frankly, I got a little choked up about that 
because this person was doing all he could to serve his country 
and our country is not concerned enough about his deployment 
rate to do anything about it. But he is one example of many 
people serving in our armed forces in this day and age. The 
fellow across the table talked about the fact that they now 
qualify for food stamps and welfare, and that also troubled me 
greatly. And I noticed you mentioned the prosperity that we are 
now seeing that is being enjoyed once again in Bosnia and that 
is fine, but the prosperity is not being enjoyed in the homes 
of many of the people that are serving in our armed forces now.
    I also have military retirees from World War II and Vietnam 
who cannot get in to see a doctor anymore at the military 
hospitals. When they finally get in after waiting 6 weeks or 6 
months, they wait 6 hours or longer just to get in the door.
    We have got people now that are suffering in terms of 
training because we don't have enough ammunition for them. We 
are cannibalizing airplanes. Yet--life is about making tough 
choices, and I am very disappointed, speaking not just as a 
Member of Congress but as a citizen of this country, the 
administration is saying no to troops that need pay raises, no 
to troops who need help who are being overdeployed, no to 
veterans who need health care, no to troops who need equipment 
and ammunition for training, and I mean in the meantime we are 
saying yes to deploying troops around the world to do social 
work. And when I see troops in Haiti a couple of years ago and 
now in Bosnia carrying ballots and worrying about elections, 
that is a wonderful thing to do when we have our pockets 
overflowing with money in every--throughout the land. But we 
are not facing that situation. And we have an administration 
now that is not worried about what our troops are going 
through, and yet--they are saying let's cut even deeper into 
the bone, but at the same time let's deploy you more. And I 
find that very troubling, and I wonder, Secretary, if at some 
point the person in the White House understands that the bottom 
is going to fall out and we are not going to be able to do any 
of these wonderful things around the world if we don't take 
care of our people that are serving in the armed forces and 
worry about what their future is all about. And I wonder if you 
have that concern about the bottom falling out at some point if 
we don't pay attention to these things?
    Secretary Cohen. Well, thank you very much for your 
comments. You are right, there are tough choices involved in 
all of this. With respect to pay raises, we have provided for 
the maximum allowable amount, as dictated by Congress, for pay 
raises for our troops. So the pay raises, in fact we have 
programmed in our budget the maximum allowable under 
congressional legislation.
    With respect to overdeployed, I agree with you. This is 
something that we are very concerned about, something that 
General Ralston has been deeply involved in trying to have a 
mechanism whereby we can track that individual who has been 
deployed there twice. I inquired recently, and perhaps General 
Ralston can comment on this, we had one individual who was 
deployed either his third or fourth time and we asked how this 
could take place? And he said well, I found out he had 
volunteered to do it. Now, that was an exception. And that is 
something we have to be really very concerned about, that we do 
not want to see either units--and even the Air Force gets down 
to much more micromanagement in terms of looking at individuals 
within the units, to be as sure possible that we are not 
overutilizing certain units of those individuals to the point 
where they do have a morale problem; namely, they have an 
unhappy spouse at home who decides that he or she would rather 
be divorced than to serve with that individual.
    So that is of concern.
    The equipment is of concern. That is why I added a billion 
dollars this year for spare parts and some of the engine 
replacement, because I have been concerned about that.
    With respect to social work, I think I have to be careful 
here because in Bosnia, by way of example, there we have the 
highest reenlistment rate in the military as a result of those 
who are serving in Bosnia. They feel really good about what 
they are doing. And that is where we found the highest 
reenlistment rate for those who have served there. They don't 
think it is social work. They think that they are making an 
enormous contribution to our interests and to the interests of 
those people that they are there helping to preserve the peace.
    I agree with you that we should not be engaged in certain 
efforts, in nation building and whatever. But I think that when 
we make a contribution that we can perhaps forestall the spread 
of a conflagration on a continent that we would be become 
involved with, that is more than social work. Certainly over in 
Southwest Asia, I don't think any of the troops over there 
would think we are involved in social work. And we are deployed 
over there for a very good reason as far as being involved in 
Kuwait and the other region. So I think it is tough choices. 
When we find the problems that you have identified, then we 
have got to correct them, and you are helpful to us as we can 
be informative to you.
    When you find on your fact-finding missions and you get 
evidence that there is dissatisfaction and you find that there 
is more than simply anecdotal evidence, you bring it to our 
attention, we try to respond to it. And that is why I think--I 
see it as a joint enterprise. I can't come before you and say, 
there are no problems. There are problems. But many times, you 
are closer to it as a result of your own constituency and as a 
result of your own travels, that you bring things to our 
attention that don't bubble up certainly to my level. And that 
is one of the reasons why General Ralston has been very 
involved in this whole JROC process.
    How do we get a better understanding of exactly the nature 
of the problems that we are confronted with?
    Mr. Bonilla. And these were not isolated instances. This is 
a problem that we have been hearing about in greater terms for 
some time now. I can assure you, Secretary, as well, I 
represent an area in south and west Texas and we are very proud 
of the 7 military installations I have either directly or 
indirectly in my district and a lot of the military retirees 
that are there as well. And there is absolutely no support for 
expenditures in these areas that I am describing at the expense 
of the important expenditures that I outlined earlier.
    So it is not something that I am just talking about. It is 
something, when you go out in the heartland, I bet you if you 
had another town meeting on whether or not we should stay in 
Bosnia or we should have in hindsight gone to Haiti, that you 
would get an earful about some of the things I just pointed 
out.

                BURDENSHARING IN CONTINGENCY OPERATIONS

    Mr. Hobson just asked a question, and I would like to 
elaborate on, about the involvement of other countries. I know 
our NATO friends are involved, but I wonder, is the 
administration working hard enough to try to get some of the--
help us more with some of the bills? If it is such a big deal, 
and there are many that feel that this is a civil war, not an 
aggression beyond the areas that we have been talking about, 
but if this is such a big deal and a threat to our national 
security or the national interests of the entire world, then we 
ought to also have countries even like Japan kicking in more 
dollars to help pay for this peacekeeping mission. It is not in 
our backyard. It is in the backyard of the Europeans and they 
should first and foremost, after we get things settled down and 
established in Bosnia, they should be willing to take over the 
brunt of the work, and perhaps we should only be there as 
advisors but not have as many troops deployed as we do.
    Secretary Cohen. That, of course, is the goal that we all 
want to achieve, is the gradual winnowing down, or winnowing 
out of our force levels there and turning that responsibility 
over. That is one of the reasons why we have got this new force 
in between the SFOR forces and the local police. That is one of 
the reasons why.
    But the other countries, for example, they are as eager to 
see a return of their servicemen and women to their own 
countries as well. They have thus far decided that they would 
keep the same level, even as we are coming down. The Germans, 
for example, volunteered this. The defense minister said, we 
will keep ours at the same level, even as you come down. The 
British have their own financial problems. They all do.
    But they see it as being important that what has been 
gained not simply be lost. There has been a lot invested and, 
again, it could go wrong in the near future. No one can predict 
that. But I think the chances of us making this safer, more 
stable are greater with our presence as we build up those 
institutions that become self-sustaining.
    Mr. Bonilla. Is the President aggressively working the 
phones to try to increase the European presence--there in order 
so that we can get out quicker, or help--getting more help for 
us to pay the bills, as President Bush did during the Iraqi 
situation? Is he aggressively working to get us help in those 
areas?
    Secretary Cohen. Well, he has been on the phone and meeting 
with all of the European allies as far as Bosnia is concerned, 
I have been, Secretary Albright has been, to get a greater 
European participation in that.
    With respect to the funding in the Gulf, I appeared before 
the Senate Appropriations Committee last week and Senator 
Stevens advised me that he is taking the entire membership over 
to the Gulf in the next couple of weeks to see if he can't get 
support for increased funding in terms of contribution.
    Mr. Bonilla. Do I have time remaining, Chairman?
    Mr. Young. You have a small amount of time left, Mr. 
Bonilla. You are recognized.
    Mr. Bonilla. Thank you, Chairman.
    I do have a couple of other questions, Mr. Secretary. I 
would appreciate it. I am not trying to overburden you with 
trying to dig up information, but I have some questions that I 
would like to submit for the record regarding some of the long-
term projected costs for what we are doing in Bosnia and other 
peacekeeping missions and how that affects wear and tear costs 
and equipment and so forth. It is only three or four questions, 
but I would appreciate it if you would get back to me on that.
    Secretary Cohen. All right.

                                 KOSOVO

    Mr. Bonilla. And I just have one final question, because 
earlier you said, in relation to Kosovo, that we can't 
anticipate what's going to happen. Back in December of 1992, 
the New York Times printed an article that quoted a senior aide 
to then President Elect Clinton stating that Clinton is, quote, 
seriously concerned about the risk of wider conflict if the 
Serbs act against Kosovo. He understands that is something that 
he will have to deal with when he becomes President.
    So 5 years have passed since that statement was made and we 
still don't have a clear policy toward the Serb assault on 
Kosovo. So I hope that at some the President can think about 
what needs to be done there definitively, because clearly he 
has had at least 5 years to think about it, according to one of 
his senior aides. But then, as you said earlier, we can't 
anticipate what's going to happen in Kosovo.
    Are we back to square one or is he giving any serious 
thought to a definitive plan?
    Secretary Cohen. Well, we have had 5 years in which the 
Serbs have not taken the kind of action we have seen in recent 
days. But the fact remains that we constantly have to deal with 
Milosevic and to remind him that we have just started to see an 
easing of sanctions based upon the performance that has taken 
place in the Republic of Srpska, that they have now started to 
moderate their position there with a new moderate leader, 
Leader Dodik. And so as a result, some of the sanctions were 
just on the verge of being lifted and now Secretary Albright 
has reminded Milosevic that these sanctions are quite likely to 
be put back into place and this will take U.N. action and other 
types of activity. But very hard to have a clear-cut policy of 
when, in fact, you can't say for sure what will you take--will 
you take military action at this point? Would you commit U.S. 
troops? Would you commit NATO troops? Would you engage in 
attacks within Serbia itself or Yugoslavia, the former Republic 
of Yugoslavia? All of these issues, you know, depend upon the 
scenario itself. So it is something that we wouldn't want to 
make a declaration without consulting with Congress on these 
matters. What it would involve? What would be the costs?
    I think that the administration has made it very clear that 
Milosevic should not use the military, should not be using his 
military to funnel either weapons or money or assistance 
through the Serb police, the so-called MAW, that they would 
crack down in this fashion.
    We also don't want to encourage the people in Kosovo to be 
engaged in stoking up the rebellion as such or the 
confrontation that we have seen take place. That could spread 
quickly and overwhelm the countries in that region. It is a 
difficult issue. I don't think that anyone has a clear-cut 
answer.
    Mr. Bonilla. I know a lot of these things developed before 
you got there, Mr. Secretary. You are a very important player 
in this. But a lot of the questions that we have about 
definitive policy are directed at the administration, that I 
feel clearly has not had a definitive policy in many of these 
areas before. Thank you for your time.
    Mr. Young. Mr. Nethercutt.

                      POLICY OBJECTIVES IN BOSNIA

    Mr. Nethercutt. Thank you, Mr. Chairman. Welcome, Mr. 
Secretary and General, Mr. Under Secretary. I want to follow up 
with you gentlemen very respectfully on what my colleague, Mr. 
Bonilla, and others have said.
    I was one of the members of the delegation that went over 
this weekend also, and I think back to when I first came on 
this Committee in 1995, when Secretary Perry came here and 
declared in no uncertain terms that this was a 1-year 
operation, that we would be out in a year, and that it would 
cost $1.5 billion. He said that: ``we must not be drawn into a 
posture of indefinite presence in Bosnia.'' It was not long 
before we had further requests for more money.
    Now we are up to roughly $6.5 billion. Two-and-a-half years 
later, here we are now with another $487 million plus another 
$1.9 billion for next year. President Clinton in his 
certification to Congress notes that, ``While I do not propose 
a fixed end date for this presence, it is by no means open-
ended.''
    That is one of the great problems I think this Congress has 
with getting any clear declaration of any certainty or any 
intelligible policy out of the President. I say that very 
respectfully, for I have no quarrel whatsoever with our people 
on the ground, our military men and women in Tuzla and in the 
whole region. They are top rate. General Ellis was wonderful. 
And I have the greatest confidence. So my quarrel is not with 
anybody in the military. But my quarrel is with this sort of 
situational determination of policy.
    Mr. Secretary, I heard you say a little while ago in terms 
of formulating this supplemental that it was delayed with 
regard to the $1.9 billion, because you didn't think we would 
be there past June. I look back to the President's tying U.S. 
withdrawal to reaching complete and achievable benchmarks. I 
find it hard to imagine that your offices would not have a 
pretty good sense of whether we would be there past June, in 
order to submit to this Congress this supplemental request.
    I have heard you say, sir, with regard to the declaration 
of policy, ``I am not sure what we will do in this region of 
the world.'' I understand it is difficult. I am troubled by it 
myself in trying to figure out how to face this challenge. But 
my sense is that our country has an obligation to have a clear 
policy, to let the world know what our clear policy is, whether 
it is southwest Asia or whether it is Bosnia, and then conform 
world events perhaps to our policy, and drive policy, not react 
to policy. And I fear that we are in a situational policy 
position where we are reacting.
    There is clearly a better condition in Bosnia today than 
there was 6 months ago. And I think looking back to the words 
of Secretary Perry and Mr. Clinton and others who were trying 
to tell the country what to expect relative to Bosnia, that 
they have been way off the mark. So how much farther do we go 
with regard to policy establishment and benchmarks and 
guidelines?
    Ambassador Galbraith briefed us before we went to Bosnia 
and he laid out a list of requirements for an exit strategy 
that I am sure was drawn by an attorney downtown who wants a 
Utopia with regard to policy in Bosnia. We are never going to 
get there in my lifetime, in my humble opinion, if we establish 
those kinds of benchmarks.
    So I am one of the people who is frustrated by this. I am 
going to support this military, and I would not ever pull out 
money from people on the ground. But I must say, to hear the 
President say, ``I don't propose a fixed end date for this 
presence, but it is by no means open-ended,'' there is a 
disconnection there. And that is dishonest in terms of dealing 
with this Congress and I think with the country.
    I think the guy in my district wants to have a clear policy 
about why we are there and why we are going to stay there, and 
how are we going to afford it. So forgive me, but I am serious 
about this. And I really feel as though in your efforts as 
Secretary of Defense and the Chairman of the Joint Chiefs and 
the hierarchy of the Defense Department, I think it is 
incumbent upon you to perhaps sit down with the President and 
say this is going to come and get us one of these days, this 
lack of any clarity with regard to policy.
    And so I appreciate having your response because I see it 
as a great problem. And I also want to have you respond, if you 
could, please, to what if there is no supplemental and we say, 
please come home? How much would it cost to move us out and 
what planning has there been done for that? You should have 
this information assuming that, Mr. Secretary, you are accurate 
in saying that you were expecting that we would be out by June 
of this year.
    Secretary Cohen. Thank you very much. And I appreciate the 
sentiment that you have expressed in terms of your concern. 
With respect to the policy, Dayton is still the policy. That 
has been the articulated policy of the administration. It has 
not changed. I think it is pretty clear-cut in terms of what 
the objectives were.
    Some of those objectives I think you can see taking place. 
They are not going to be full-blown and they are not likely to 
be in the immediate future. But I was a great doubter, too. I 
must tell you a couple of years ago I was sitting on that side 
over there, and I had the same questions then that you are 
raising now: What are we getting into for how long; how much is 
it going to cost?
    So I also didn't insist upon it but those are the 
representations that were made, it would take 1 year. In fact, 
the military obligation was fulfilled in that 1 year. The other 
aspects of it, the civilian implementation, were not. So the 
question then became should you continue the military presence 
to allow the implementation on the civilian side that was 
really envisioned and encapsulated in Dayton itself. Should 
there be, for example, a judiciary that is independent? 
Hopefully we are on our way to seeing a judiciary created. 
Should there be competent professional police as opposed to a 
bunch of thugs who were hired out by their local ethnic 
majority at that time? Should there be free elections? Should 
there be radio and television broadcasts which are relatively 
independent? We are seeing the seeds of all of those start to 
take and bear fruit at this point. It is still going to be some 
time.
    Now, when the President says, ``I can't give you a definite 
time but it is not open-ended,'' the reason he can say that is 
that no one can give you a precise time. If we learned anything 
from this past experience by giving a date of 1 year, 18 
months, we found, well, it doesn't work out that way. But it 
cannot be open-ended, because of you. Each year the President 
has got to come back to you, the Congress, and say, ``I am 
requesting funding for this engagement.''
    And so there are benchmarks. You are going to hold us, 
saying, ``Wait a minute, you have these benchmarks. How are you 
doing?'' Every 6 months they have to be reviewed. The Europeans 
are anxious to reduce the sizes of their forces as well. So 
there is going to be external pressure. The policy remains the 
same and the goals remain the same and hopefully we are trying 
to accelerate that.
    I know there was a question here, Congressman Murtha has 
been very concerned about that issue from the very beginning. I 
would not have guessed last year that 10 Croatians would 
surrender voluntarily. I would not have guessed a month ago 
that we would see three Serbs come in voluntarily. So things 
are starting to happen to achieve the goals of Dayton.
    I think the President is trying to really address the 
issue. I cannot give you a definite time frame. And if I did, 
you would say I would be misleading you if I didn't measure up 
to it. So he is saying, I cannot give a definite time, but 
obviously it is not going to be open-ended. There is never 
going to be a time when we can come out. A lot of that depends 
upon working with our allies and working with you because you 
ultimately will decide.
    And you asked the question: What happens if we don't give 
you the money? Our choice would be the President saying that he 
is recommending that we stay beyond June of 1998. Then the 
military, the Defense Department, will look at this, unless you 
direct otherwise, and say here is how we have to pay for this. 
And so we will start cutting back on all the things that have 
been talked about here today.
    If Congress were to direct that the troops come home, you 
would do so, I assume, by simply cutting off any future funding 
for the soldiers and others who are serving there. I am not 
sure Congress would do that, but if you did, I will give you an 
exact cost of what it would take to lift all of our forces out 
of there, to close down the operations and come home.
    But before doing so, again I would like to come back to the 
point I made earlier. When you are measuring the costs, measure 
the costs of if we do this at this point, given what has taken 
place in Kosovo, given the instability that could spread very 
quickly, what will the costs be if we ever have to be called 
upon to intervene on a large scale in Europe because of the 
flame that has spread throughout that region. We have had some 
pretty nasty experiences in two world wars, and I think that 
the costs would overwhelm us compared to where we are today.
    So it is tough in this kind of a balancing but I think we 
have made a wise investment to date. And I don't want to see it 
go on any longer than necessary. And I know that there are 
readiness issues that are constantly being raised that we have 
to address, and it may be necessary in future years to say are 
we prepared to support additional funding to keep these 
commitments. Or would you and other Members say cut back the 
commitments? No more peacekeeping. Do not go to Africa. Don't 
go to Haiti. Don't go to any of these other regions beyond 
where we are today.
    I cannot predict to you what the sentiment would be if you 
saw massive destruction of populations in Africa today.
    Mr. Nethercutt. We have already seen it. The Tutsis and the 
Hutus; Rwanda?
    Secretary Cohen. But in addition, if you had humanitarian 
requests, what would this Committee say? Would you say no, we 
are not going to provide even humanitarian types of relief on a 
temporary basis? We have to face what would take place in other 
regions throughout the greater European, Central Europe and the 
Caucasus. What happens if--would we say under no circumstances 
we are not going to provide anything?
    I cannot predict what you would say, but I know this: that 
we cannot carry out policies without working closely with 
Congress as a partner on this. We don't make decisions 
unilaterally and without your support because you have the 
power of the purse.
    Mr. Nethercutt. I realize that. I will just close by saying 
we have just talked about Bosnia and a policy there. I hear 
what your declarations are relative to our national interests 
in the Middle East and southwest Asia and our dealings with 
Iraq. We haven't even begun perhaps to see a cost associated 
with that one if it deteriorates. And so my sense is we cannot 
do it all, and that is why I am just advisedly agreeing with my 
other colleagues with regard to insisting on more assistance 
from places like Kuwait and Saudi Arabia. I understand they are 
charging us for water for our troops. It is in their interest 
that we are there to provide some stability. So forgive me, I 
appreciate your work, but I really think we have to have a 
clearer declaration of policy and then we can agree with it or 
not.
    Secretary Cohen. Thank you.
    Mr. Young. Mr. Visclosky.
    Mr. Visclosky. Thank you, Mr. Chairman. Mr. Lynn, in 
follow-up to Mr. Murtha's line of questioning earlier, do you 
think that Dr. Hamre walked off with the contents of your safe?
    Mr. Lynn. No, not to my knowledge but I will check his 
office when I get back.

                            MINES IN BOSNIA

    Mr. Visclosky. Mr. Secretary, are there still people in 
Bosnia laying mines?
    Secretary Cohen. We would have to say that not to our 
collective knowledge anyone is laying mines. I have not been 
apprised of that. General Ralston has just indicated he does 
not have any knowledge of that. No.
    Mr. Visclosky. So your answer would be no? Okay.
    I also understand that Macedonia has been touched on so I 
would not want to follow that line of questioning, although I 
would want to indicate I am very concerned about the situation 
there.

                                 KOSOVO

    The question I would have about Kosovo is: Is there a 
possibility of strategic thinking that since there is a 
reassessment going on in this country about our continued 
presence in Bosnia, that the violence is very deliberate to 
potentially muddy this debate and to send a signal that maybe 
the situation is never going to be resolved in that part of the 
area and we should simply withdraw?
    Secretary Cohen. From Bosnia? Well, to my knowledge, there 
has been no such consideration of a complete removal of 
American influence in that region or presence in the immediate 
future. I think it is the goal of the administration to----
    Mr. Visclosky. No, no, I am not saying about the 
administration; but would there be strategic thinking by others 
in the area to force our withdrawal; force a change in our 
policy to muddy the waters by having violence occur in the 
Kosovo region? I just find it coincidental that that occurs at 
the very time that we are reconsidering our continued presence 
in the area.
    Secretary Cohen. Well, you could probably speculate that it 
would be in the interest of Milosevic to start cracking down on 
the Kosovoans in order to stimulate a riotous reaction so he 
could again crack down further so that that would cause us to 
recalculate. Anything is possible. But I would suspect that 
Milosevic himself is now just starting to see some relief from 
the kind of sanctions that have been imposed upon his country 
and some benefit coming to him that it would seem inconsistent 
and counterintuitive for him to do that at this time, 
especially since it may result in imposition of greater 
sanctions on his economy when it can least afford to 
accommodate them. But we are walking in a wilderness of mirrors 
when you start calculating what is in the minds of Milosevic or 
any of the other people who are over there.

                 CARRIER DEPLOYMENTS IN THE GULF REGION

    Mr. Visclosky. Mr. Secretary, with the exception of Kuwait, 
our allies are not willing for the U.S. to use their bases if 
strikes should take place. Is that going to necessitate a two-
carrier task force in the Gulf?
    Secretary Cohen. We are going to have a two-carrier task 
force for the immediate future at least. What we have requested 
is funding to carry us through to the end of this fiscal year 
to maintain the level of force that we currently have.
    I would expect to see a readjustment of that force level as 
soon as we become satisfied that we are going to get full 
compliance by Saddam Hussein. But we cannot predict that right 
now. Again, his track record hasn't been very good. It has been 
very bad as a matter of fact. And I laid this out before about 
the lies and the deceit and the dishonesty as far as their 
performance is concerned. But now we have this memorandum of 
understanding and we see at least initially that he is 
complying with it. We will have to wait and see how long that 
lasts. But I don't anticipate a long-term strategy of keeping 
two carriers in the Gulf.
    Mr. Visclosky. Mr. Secretary, thank you.
    Mr. Young. Mr. Istook.

              BUDGET OFFSETS FOR THE SUPPLEMENTAL REQUEST

    Mr. Istook. Thank you, Mr. Chairman. I would like to see if 
I can get into an area that hasn't really been sufficiently 
covered, and see if we can get some information rather than 
just exchanges of speeches.
    My first question is regarding the supplemental 
appropriation request for the military. Is the administration 
ready to accept offsets in domestic spending so that we can 
provide these funds for the Defense Department without having 
to undo all the hard work that has been done toward balancing 
the budget? You mentioned, of course, whether Congress would 
approve that. My question is: Is the administration ready to 
accept domestic offsets for this supplemental?
    Secretary Cohen. I cannot give you an answer based upon my 
own knowledge, but I would assume, since the President has 
submitted a request for nonoffset supplemental, that they would 
not be either eager or willing to accept that.
    Mr. Istook. Then I have to question how effective you have 
been in selling priorities to the White House, if you are 
telling us this is of such importance, and I am not diminishing 
the importance of it, but the President of the United States 
does not deem this sufficiently important that you cannot find 
other places in a $1.5 trillion-plus Federal budget to offset 
this so that we can achieve what everybody has been saying 
about balancing the budget. Haven't you had that conversation 
with the President on this?
    Secretary Cohen. With all due respect, my obligation is to 
serve as Secretary of Defense to identify areas of our budget. 
Can we accept offsets? I told you earlier in my testimony the 
answer is yes. Are you willing to accept a cut in readiness? 
Are you willing to have the depot maintenance start to stack 
up? Are you willing to have real property maintenance start to 
go in delay and disrepair? We could do all of that, but I don't 
think it is in our country's national security interest to do 
that.
    Mr. Istook. That wasn't my question.
    Secretary Cohen. You are asking me to make a recommendation 
to the President where to get savings in other parts of the 
budget.
    Mr. Istook. I asked you if you had that conversation with 
the President. Is this not of sufficient importance that you 
have had the conversation with the President and said, to avoid 
the cutbacks in the military which you just described, to 
assure that that does not happen, Mr. President, we need to 
know what you are willing to make the offsets in domestic 
spending wherever necessary. Are you telling me that you have 
not even had that conversation with the President?
    Secretary Cohen. I have not had such a conversation with 
the President. My conversations with the administration have 
been how do I deal with these requirements under these 
circumstances.
    Mr. Istook. Well, then I would have to suggest, Mr. 
Secretary, that you haven't done your job the way it needs to 
be done. Just as Mr. Nethercutt properly so questioned; what 
kind of contingency planning has been conducted at the 
Pentagon, if at the end of last year you were not looking at 
the possibility of having Bosnian operations extended beyond 
June of 1998, and from where the funds would come. There was no 
plan even put together other than to say the only way that the 
military can be assisted is if we make it an afterthought; 
something that is put on top of all the other spending, rather 
than saying the military and these operations which you 
describe have sufficient priority that we had to put them in 
our base rather than something that is added on later.
    I think there is a great disconnect between the priorities 
which you are expressing to this Committee and that you haven't 
even seen fit to talk to the President to say, Mr. President, 
are you willing to accept offsets in domestic spending as may 
be necessary to make sure that we don't have these problems 
surface with our men and women of the Armed Forces?
    Secretary Cohen. As a matter of fact, there is an allowance 
in the fiscal 1999 budget of $3.2 billion, that we have talked 
about several times this afternoon, for Bosnia and southwest 
Asia.
    Mr. Istook. That is next fiscal year.
    Secretary Cohen. We were concerned about having some 
contingency, because we couldn't plan on it specifically. That 
is why we are up here saying that for fiscal 1999 there needs 
to be a budget amendment that would take that into account. So 
it has not gone without some recognition on our part that there 
are some contingencies likely to be necessary for both Bosnia 
and southwest Asia.
    Mr. Istook. But you did testify earlier that you could not 
incorporate into your planning the possibility that during 
fiscal year 1998, after June 30 of 1998, there would be 
continued operations in Bosnia. You testified earlier that you 
couldn't be planning on that. Now you are talking about 
something that is fiscal year 1999, and it is just not the same 
thing.
    I must tell you, Mr. Secretary, I question whether the 
Administration is talking out of both sides of its mouth, when 
on the one hand it stresses the importance of this to the 
military and to our Defense commitments. On the other hand it 
doesn't even discuss where it fits in the overall set of 
priorities which is assessing the needs of the military within 
the normal budget framework, which could mean offsets against 
other domestic spending programs.
    Secretary Cohen. I believe the Office of Management and 
Budget and the President, the Vice President, all in the 
administration are fully aware of what the implications would 
be if we had to take this out of offsets in the Defense budget.
    Mr. Istook. But Mr. Secretary, you are avoiding the issue 
again. You keep saying, well, the only alternative is offsets 
in the Defense budget. You are avoiding the issue that there is 
an alternative of offsets in the much larger set of numbers 
which constitute the domestic spending budget.
    Secretary Cohen. If I recall, there is a firewall that has 
been established by Congress as well.
    Mr. Istook. Which can be changed.
    Secretary Cohen. By Congress.
    Mr. Istook. The Congress and the President together can 
change that.
    Secretary Cohen. I believe that Congress set the firewalls 
for this fiscal year.
    Mr. Murtha. It takes 60 days to change it and otherwise it 
would be sequestered, so it cannot be done.
    Mr. Istook. This is part of the arrangement with the budget 
that the President desired as part of the negotiations of the 
budget deal last year.
    Secretary Cohen. But that is something that----
    Mr. Istook. Mr. Secretary, you are not being fair if you 
try to say, well, Congress has set firewalls, as though Mr. 
Clinton doesn't have his own priorities between domestic 
spending and military spending.
    Secretary Cohen. It is something that I believe that 
Congress agreed to as part of the negotiations of the balanced 
budget.
    Mr. Istook. It was part of the President's budget as well 
as Congress.
    Secretary Cohen. Well, I tried to indicate it is a coequal 
responsibility here. We don't act as something one against the 
other. This is something that you have to achieve through 
negotiation with the House and the Senate and the 
administration. That was done. There were firewalls that were 
set up. I don't know how we could change that.
    You indicated a moment ago that you don't believe the 
administration would even be open to the discussion of changing 
those firewalls in domestic spending. That was my point. Thank 
you, Mr. Chairman.
    Mr. Young. We look forward to seeing you later in the 
month, Mr. Secretary. And we will be starting our markup on the 
supplemental tomorrow afternoon. We will do the best we can to 
do what is right. The Committee is adjourned.
    [Clerk's note.--Questions submitted by Mr. Young and the 
answers thereto follow:]

      Risks in Western Pacific Associated with Deployment of USS 
                            ``Independence''

    Question. Supporting the indefinite extension of the NATO mission 
in Bosnia combined with the increased deployment of U.S. forces to the 
Persian Gulf has stretched the ability of the U.S. to meet its security 
commitments elsewhere in the world. For example, the Air Forces has two 
Air Expeditionary Forces (two wing equivalents) deployed in the Persian 
Gulf. The movement of carrier battle groups in the Mediterranean and 
Pacific has caused the Air Force to carry an increasing burden in 
Bosnia and on the Korean Peninsula, respectively. In addition, the need 
to meet the increasing demand for U.S. forces will significantly 
increase the strain placed on U.S. military personnel. Have the risks 
associated with meeting U.S. security commitments in the Western 
Pacific increased because of redeployment of the carrier Independence 
to the Persian Gulf? If not, why?
    Answer. As long as the Independence battle group is deployed to the 
Arabian Gulf, ------.

       Bosnia and Southwest Asia--Supporting the Two MRC Scenario

    Question. Had redeployment of the carrier battle group from the 
Mediterranean to the Persian Gulf increased risks associated with U.S. 
support of the NATO mission in Bosnia?
    Answer. There was no increased risk associated with U.S. support of 
the NATO mission in Bosnia as a result of the deployment of the carrier 
battle group from the Mediterranean to the Persian Gulf.
    The primary mission of carrier battle groups deployed to the 
Mediterranean is not support of operations in Bosnia. During portions 
of their deployment to the Mediterranean carrier-based aircraft have 
flown missions in support of operations in Bosnia to augment land-based 
missions. The movement of the carrier battle group from the 
Mediterranean to the Gulf shifted the sourcing of those air missions 
from carrier-based aircraft back to land-based aircraft operating from 
Aviano and other land-based sites. Additionally, other aircraft are 
available within European Command, if requested through NATO and 
approved by National Command Authorities, to respond to increased 
requirements in Bosnia.

  Risks to Two MRC Scenario Due to Overextension of High Value Assets

    Question. What risks does the overextension of high value assets, 
such as JSTARS and AWACS, pose to our ability to meet the demands of a 
2 MRC scenario?
    Answer. The ability to meet the demands of a 2 MRC (now referred to 
as Major Theater of War, or MTW) scenario is definitely hindered by 
overextension of our high-demand low density assets. The risk is that 
those assets and their crews will not be able to conduct the ongoing 
training and maintenance required to ensure they are ready to meet the 
demands of a given contingency, and that is especially true for one or 
more MTWs. That is the purpose of the Global Military Force Program, 
which establishes the stead-state and surge Personnel Tempo and 
Operations Tempo constraints, based on Service requirements that allow 
us to weigh the risks and benefits associated with the deployment of 
these assets.
    In the present situation, ------.

       Bosnia and Southwest Asia--Supporting the Two MRC Scenario

    Question. What risks does the overextension of certain types of 
units such as military police and air combat control units pose to our 
ability to meet the demands of a 2 MRC scenario?
    Answer. The extended use of certain support units during peacetime 
contingency operations results in higher usage rates on equipment and 
increased tempo on personnel. Furthermore, strengthening the force in 
one part of the world, decreases our peacetime presence elsewhere. The 
impact on our Two Major Theater War capability, however, is manageable 
as long as the Services receive timely reimbursement for contingency 
operations.
    Question. The Committee understands that military units deployed to 
operations other than war such as the NATO mission in Bosnia suffer 
degradation of their combat skills. How long would it take to refresh 
the skills of the units now deployed in Bosnia so that they are capable 
of supporting combat related contingency?
    Answer. First, we need to make clear that not all units suffer 
combat skill degradation. Some individuals, such as air traffic 
controllers and combat service support personnel perform the same 
functions as their wartime mission and therefore increase their skills. 
However, many units, especially combat units, experience readiness 
degradation. For example, combined arms maneuver exercises are 
difficult to accomplish during peacekeeping missions.
    The time needed to regain perishable skills obviously varies, 
depending on the length of the deployment and the type of unit. 
Experiences from Bosnia show that under ideal peacetime conditions the 
preferred time for a unit to be ready for wartime redeployment is equal 
to approximately the length of the deployment they just completed. This 
time includes not only training but time for personnel turnovers to 
take place and time for authorized leaves. This time, however, can be 
significantly condensed if required to meet actual contingency 
deployment timelines. It is preferred to deploy other available units, 
or deploy returning units last since this maximizes the time available 
to prepare a unit for redeployment. Under wartime conditions, it is 
estimated that a unit would need approximately 45 full training days 
before the force is ready to redeploy for a warfighting contingency. 
This assumes no time off and minimum personnel turnover.
    Question. The Committee understands that the Air Expeditionary 
Forces deployed in support of SWA effectively represent two wings in 
the Air Force structure that have neither their own personnel, 
aircraft, nor support equipment. All such resources are drawn from 
existing non-deployed units. Does the deployment of the AEFs combined 
with supporting the Bosnia mission threaten your ability to 
successfully carry out the 2 MRC scenario? If not, why?
    Answer. While these ongoing peacetime contingency operations may 
increase the risk of not meeting planned Two Major Theater War (2 MTW) 
timelines, they do not threaten our overall ability to successfully 
execute a 2 MTW scenario. In fact, if the MTW is in SWA, our ability to 
respond is actually enhanced because part of the force is already in 
place. These deployments do have an impact on our forces. The use of 
readiness spares, equipment, and the effect of tempo on our people is 
significantly increased. However, these effects are manageable and we 
are keeping our wartime response capability within the band of 
acceptable risk. As long as timely reimbursements are made to the 
Services to replenish stocks, maintain equipment, sustain our rotation 
policy, and prevent cutting into modernization accounts our ability to 
successfully carry out the 2 MTW scenario will not be reduced.

  Bosnia and Southwest Asia--Timely Passage of the 1998 Supplemental 
                           Appropriations Act

    Question. Several witnesses before the Committee during 
consideration of the fiscal year 1999 budget request have emphasized 
the importance of receiving supplemental appropriations to fund 
contingency operations in a timely fashion. Witnesses have indicated 
that, absent such funding, the Department would have to curtail 
readiness related training activities, depot maintenance, and real 
property maintenance. What specific actions will the Department have to 
take to reduce operating costs in order to support contingency 
operations if supplemental funding were unavailable? What training 
events would be canceled within each of the Services? Would depot level 
maintenance or other equipment maintenance workload be deferred? What 
other actions would be taken?
    Answer. If supplemental funding were not available, the Department 
would be forced to take extreme measures that would fracture readiness 
and entail months of recovery to achieve the current levels of 
readiness. Some examples of actions that might be taken are: deferral 
of military personnel accessions and permanent change of station (PCS) 
rotations, defer equipment inductions into depot maintenance 
facilities, curtail or cease noncontingency related training, and 
furlough of civilian personnel. At this point in the fiscal year, the 
Department is left with relatively few options to prevent wholesale 
upheaval to critical, basic operating programs.
    Question. What effect will this have on readiness?
    Answer. The effect on readiness would be catastrophic. Deferred 
equipment maintenance will result in fewer pieces of equipment being 
mission capable and/or available for training. In addition, fourth 
quarter training activities would be curtailed to the point that a high 
proportion of units would have their readiness levels degrade to the C-
3 level, or worse. The severity of the impact would be that once these 
degradations occur, it will take many times longer for these units to 
recover back to the levels experienced before having to absorb the 
supplemental costs.
    Question. When is the decision point for canceling training or 
deferring other activities?
    Answer. The Department needs assurances by early April that funding 
will be provided on a nonoffset, emergency basis. Currently, the 
Services have been told to execute their training programs on the 
assumption that contingency operations funding would be provided 
without offset to preclude any premature actions. If the assurances are 
not received, the Services will begin modifying their training programs 
and maintenance efforts (equipment and real property), as well as other 
program efforts, in anticipation that funding may not be received in 
time, or in full, to support contingency costs. Some actions taken by 
the Services, such as missed training opportunities or joint exercises, 
may be nonrecoverable.
    Question. On December 18, 1997 President Clinton announced that he 
had agreed in principle that U.S. forces should participate in a Bosnia 
peacekeeping force after the mandate of the current SFOR expires. 
Decisions made recently by NATO planners have led to the requirement 
for approximately 6900 U.S. military personnel (as opposed to 8500 in 
SFOR) to remain in Bosnia until the achievement of a self-sustaining 
peace in the region.
    Could you explain to the Committee why it is necessary for U.S. 
forces to stay in Bosnia past the June 30 deadline for SFOR? In your 
answer please address the following:
     The national security interest of the U.S. regarding 
Bosnia;
     the military mission of the post-SFOR deployment; and
     the final goals and objectives of U.S. policy in Bosnia.
    Answer. The continued presence of U.S. forces in Bosnia and 
Hercegovina is necessary to promote our national security interests. 
The war in Bosnia has always had the potential of spreading to 
neighboring countries such as Greece and Turkey, two important US 
allies who are also members of the North Atlantic Treaty Organization. 
While tremendous progress has been made in Bosnia, conditions are not 
yet irreversible, and would likely degenerate with the removal of NATO 
troops. Recent strife in Kosovo further underscores the need for 
continued US leadership, working closely with our European friends, to 
prevent regional instability from adversely affecting European 
security.
    The Post-June SFOR mission is to prevent a resumption of 
hostilities and maintain the broad support necessary for civilian 
implementation, reflecting a transition of emphasis from military to 
civilian implementation. The intent and objective of the force will be 
to sustain the current pace of civilian implementation, maintaining the 
gains achieved to date and the current rate of progress towards full 
implementation of the Dayton Agreement. The force will promote the 
consolidation of SFOR's achievements and allow the peace to become more 
self-sustaining, but would do so without exceeding SFOR's current level 
of intensity and involvement.
    Key Military Tasks:
     Maintain a deterrent military presence in the country
     Act to prevent major breaches of the cessation of 
hostilities or the removal of heavy weapons or air defense weapons from 
cantonment
     Continue to operate Joint Military Commissions at 
appropriate levels
     Contribute, within means and capabilities and in a manner 
similar to SFOR's current approach, to a secure environment in which 
the international civil organizations and the Parties to the Peace 
Agreement can carry out their responsibilities under the agreement.
     Ensure force protection and own freedom of movement
     Ensure continued compliance with the cease-fire and zone 
of separation and other military aspects of the Peace Agreement
     Monitor, and if required, enforce compliance with the 
military aspects of the GFAP
     Enforce rules and procedures governing the use of airspace 
over B-H in coordination with the B-H Civilian Aviation Authority. 
Control the airspace over B-H.
    Key Supporting Tasks: Within means and capabilities and in a manner 
similar to SFOR's current approach:
     Provide, on a case by case basis, support to the High 
Representative in his role of implementing the civil aspects of the 
Peace Agreement, as well as to the other principal civil organizations
     Support the Supervisor in implementation of the Brcko 
arbitration decisions presently in effect
     Support the OHR and OSCE in the conduct of elections and 
the installation of elected officials
     Support and promote measures to encourage returns of 
refugees and displaced persons in cooperation with the OHR, UNHCR, and 
other international organizations but not to forcibly return refugees 
or undertake to guard individual locations
     Support OHR and OSCE in media reform efforts
     Support ICTY and efforts against war criminals
     Support the OHR and International Police Task Force (IPTF) 
in assisting local police by providing back-up support and a secure 
operating environment, directed towards the creation of a reformed, 
restructured indigenous police force, but without undertaking civil 
police tasks
     Provide, on a case by case basis, selective support to the 
OSCE, if requested, in implementing Annex 1B of the Peace Agreement in 
B-H.
     Contributing to the continued improvement of freedom of 
movement throughout B-H
     Support the Standing Committee on Military Matters (SCMM).
    The goal of U.S. policy in Bosnia is to create a sustainable peace 
where a sizable NATO presence is no longer necessary and diplomatic, 
institutional, and economic levers are sufficient to sustain peace in 
the region. Ten benchmarks have been established which would likely 
create the conditions needed for a NATO ground troop withdrawal:
    1. Local police forces need to be restructured, re-integrated, and 
re-equipped.
    2. A phased and orderly process for returns of refugees and 
displaced persons should be in place to effectively deal with civil 
disorder in accordance with western standards.
    3. Less political party control of the media, more accessibility 
for all political parties, and a more formidable ``independent'' media.
    4. The military balance will require confidence and security 
building measures, arms control, and greater inter-entity military 
cooperation.
    5. Functioning Joint-Institutions that decrease official corruption 
through the creation of legitimate revenue/disbursement mechanisms.
    6. Democratization. The September 1998 elections must be conducted 
in a free and fair manner. The need for OSCE supervision/arbitration 
should reduce. Local, entity, and national governments should function 
transparently.
    7. Economic reconstruction. The interim currency should be in 
circulation, public corporations formed, transparent budgets in place, 
and an IMF program in place.
    8. A multi-Party solution to the administration of Brcko should be 
in place.
    9. Improved party cooperation on the war crimes issue.
    10. International organizations should be able to function without 
a large NATO presence.
    Question. In his certification to Congress that the continued 
presence of U.S. forces, after June 30, 1998 in Bosnia is required, 
President Clinton notes several ``benchmarks'' which must be achieved 
prior to the ultimate withdrawal of forces from the region. They 
include, the establishment of judicial reform, the dismantling of pre-
Dayton institutions, the regulation of the media, free market reforms, 
the conduct of free elections, and a whole host of other political, 
civic and economic goals.
    Does the pursuit of these goals, in fact, constitute nation 
building by U.S. forces?
    Answer. No. The leaders of Bosnia, Serbia, and Croatia agreed on a 
formula for peace at Dayton. The Dayton agreement, balancing a single 
state with two multi-ethnic entities, created a road map for 
stabilization, reconciliation, and long-term peace. Ultimately, it is 
the responsibility of the Parties to implement their commitments. The 
new powers granted to the High Representative at the Bonn Ministerial 
have enabled the international community to marginalize obstructionists 
so that regional moderates can accelerate progress themselves. For 
example, the election of Milorad Dodik as the new prime minister of 
Republika Srpska has already substantially improved the climate for 
Dayton implementation. Dodik moved quickly to sign international 
agreements in support of economic reform, a more democratic media, and 
police restructuring.
    Question. What will be the specific role of U.S. forces in the 
attainment of these benchmarks?
    Answer. As indicated in the ``Key supporting Tasks'' under SFOR's 
mandate, it will depend on ``the means and capabilities'' of the force 
and will not exceed SFOR's current level of intensity and involvement. 
While civilian implementation progress has lagged behind the military 
components of Dayton, we expect continued progress over the coming 
months--especially on public security and media issues, and the 
establishment of a generally more stable environment.
    Question. Isn't the military mission largely finished?
    Answer. The military mission is largely finished; however, peace 
remains fragile and reversible. A continued military presence is 
required until the implementation process is self-sustaining and 
manageable through non-military diplomatic, economic, and institutional 
instruments.
    Question. How will the attainment of the benchmarks be reviewed and 
evaluated?
    Answer. The plan is for NATO to conduct reviews every six months to 
assess the situation on the ground, with a view to reducing forces as 
soon as possible. Our intention is to maintain the pace of 
implementation and transition the maintenance of peace to diplomatic, 
institutional, and economic levers.
    Question. What will be the future role of U.S. forces in a post-
SFOR deployment regarding:
     the capture of indicted war criminals?
     the resettlement of refugees?
    Answer. SFOR's original guidance in respect to war criminals will 
not change. SFOR will only detain war criminals if they are encountered 
in the course of performing SFOR's mission and the tactical situation 
allows. In these situations, commanders will act to detain alleged war 
criminals only if they deem risks to be acceptable. We must remember, 
the Parties bear first responsibility under Dayton for bringing war 
criminals to justice, and we put intense pressure on them to perform 
this mission.
    SFOR will support phased and orderly returns of refugees and 
displaced persons by contributing to a safe and secure environment but 
not to forcibly return refugees or displaced persons or undertake to 
guard individual locations.

       Bosnia and Southwest Asia--Supporting the Two MRC Scenario

    Question. General Shelton, what is your present assessment of the 
security threat posed to U.S. forces participating in SFOR?
    Answer. ------.
    Question. What is your assessment of the likelihood that 
hostilities would resume in Bosnia if SFOR were to be withdrawn on 
schedule?
    Answer. The current NATO-led SFOR mission in Bosnia plays a 
critical role in promoting stability in the region by separating former 
warring parties and enforcing important aspects of the Dayton Peace 
Accord. ------ by all former warring parties in Bosnia as a credible 
military force which ------. Since December 1995 significant progress 
has been made in Bosnia due to the climate set by the credible military 
presence of IFOR and SFOR. Much remains to be accomplished in the 
civilian implementation tasks before an enduring normalization can take 
hold. ------.

                           Violence in Kosovo

    Question. Hostilities have flared up in the Serbian province of 
Kosovo, where ethnic Albanians constitute 90% of the population. 
Serbian government forces have cracked down on Albanian separatists and 
civilians have been killed. Do you believe the recent violence in 
Kosovo will spread or even endanger the Dayton Accord in Bosnia?
    Anwer. Although the immediate focus is on the human rights of the 
ethnic Albanians in Kosovo, the broader concern is that escalating 
violence in Kosovo could spill over into neighboring Albania and FYROM, 
affect Dayton implementation, and, in the extreme, embroil other states 
in the region, such as Greece and Turkey.
    Question. What, if any role, is being considered for U.S. forces in 
responding to this violence?
    Answer. At present, the USG and our Contact Group allies are 
focusing on diplomatic and economic measures to prompt the Milosevic 
government to comply with Contract Group demands to defuse the violence 
in Kosovo and engage in meaningful dialogue with the Kosovars for a 
peaceful solution within the FRY.
    Question. Since 1993, U.S. forces have participated in an U.N. 
observer mission, called Task Force Able Sentry, in the former Yugoslav 
republic of Macedonia, which borders the Kosovo region of Serbia. The 
U.N. mandate for this observer force expires this summer. Are we 
considering sending additional forces to Macedonia in response to the 
events in Kosovo?
    Answer. There is no current planning to send additional U.S. troops 
to the FYROM.
    Question. What is our position regarding extending the deployment 
of the U.N. observer forces beyond this summer's expiration date?
    Answer. The U.S. and our Contact Group partners agreed at their 9 
March meeting to seek a continuation of the international military 
presence in FYROM after the August expiration of UNPREDEP. The U.S. 
would participate in this follow-up mission.
    Question. Should the U.N. mandate expire, would either U.S., 
unilaterally, or NATO consider deploying forces to Macedonia?
    Answer. As the Secretary of State has noted, we are keeping all our 
options open in dealing with the problems in Kosovo. We do believe a 
continued military presence is essential to regional stability.
    Question. Mr. Secretary, concerning the Presidential selected 
Reserve Call-up (PSRC) for Reservists to Bosnia, the Committee 
understands that you have recently rescinded the August 15, 1998 end-
date that Secretary Perry set for the time all Reservists would have 
required to back at their home bases.
    What is the new end-date authority you have set, and what are the 
personnel levels you determined are necessary for their continued 
participation in support of operations in Bosnia?
    Answer. I issued the latest direction on the use of PSRC in Bosnia 
in 20 Feb 98 in a memorandum to the Secretaries of the Military 
Departments and the Chairman of the Joint Chief of Staff, subject 
``Callup of the Selected Reserve in Support of Operations in Bosnia.'' 
The memorandum removed the end date for operations and made no change 
in the maximum number of personnel that could be activated at any one 
time. The Joint Staff, EUCOM, and the Services are currently working on 
what personnel levels are appropriated for the follow-on force.

                         Bosnia Reserve Forces

    Question. By law, Guard and Reserve units called up under the PSRC 
authority can serve no more than 270 days. Is there debate in the 
Department of whether the law allows Reservists to be activated for a 
second 270-day tour?
    Answer. The question has been raised within the Department 
regarding the legality of calling Selected Reserve members to active 
duty under PSRC for a second 270 day tour for the same PSRC operation. 
It has been, and currently is, the policy of OSD that no individual or 
unit called to active duty under PSRC will serve more than a total of 
270 days for a PSRC operation.
    Question. If the Pentagon does not have the legal authority to 
order double tours for Reservists, do you believe the Army Reserve and 
Guard units can supply enough people who have those skills that are 
critically needed in Bosnia?
    Answer. Overall, the answer is yes. There are a small number of 
critical skills that may have to be resourced from other components or 
Services. We have used less than 2% of the Selected Reserve in this 
operation. Recently, MG Max Baratz, the Chief, Army Reserve, who is 
supplying the majority of Reserve forces to OJG, stated the USAR could 
supply soldiers to the Operation for three more years at the current 
levels. Today Reservists are an integral part of all military 
operations. We will continue to use Reservists for this mission for the 
foreseeable future. Integration of the Active and Reserve components 
has resulted in increased reliance on the Reserves. The Reserves have 
performed well when called upon. Proof of this is that commanders in 
the field cannot distinguish between AC and RC soldiers.
    Question. What types of units has Forces Command indicated will be 
difficult to fill because all Reserve components have been used once 
under the PSRC already?
    Answer. Broadcast Public Affairs Detachments (BPAD), Target 
Acquisition Batteries, firefighters, civil affairs, and psychological 
operations units are some of the units FORSCOM is concerned about. To 
date no mission has been neglected or not accomplished for lack of a 
Reserve unit. And, as I stated above the Reserves believe they can 
accomplish these missions for the foreseeable future. As the follow-on 
force requirements are defined, FORSCOM and the Army are working out 
solutions for critically needed skills and units. It is also necessary 
to remember that not all critical skills reside in the Army. Other 
Services and Reserve components, as well as our allies, have the 
ability to accomplish many of the missions required in Bosnia. We are 
looking at every available option, but have no doubt we can accomplish 
the mission given us.
    Question. President Clinton implemented the call-up for military 
operations in Bosnia on December 8, 1995. What is the Department's 
perception of the impact this long deployment has had on the morale of 
Reserve personnel, their families and their jobs? Do you believe 
recruiting and retention will suffer as a result of the Bosnia 
deployment?
    Answer. Several policies are in effect to ensure Reserve personnel 
and their families are protected during a PSRC. The military services 
are required to ensure Reserve component members and their families are 
prepared and adequately served by family care systems and 
organizations. The Bosnia PSRC proved the success of those truly joint 
efforts. Family center, whether located on Active or Reserve 
installations, are available to assist all family members, regardless 
of component or service affiliation. Only a few anecdotal instances 
have been reported whereby family members were not adequately 
supported.
    Likewise, there have been virtually no reported incidences of 
Reserve component members losing their jobs based on their 
participation in the PSRC. In fact, cases referred to the Department of 
Labor for resolution and the number of inquires by employers have 
remained constant since the conclusion of DESERT STORM.
    Data collected over the past two years indicate a stable retention 
rate for all components, at least in the short term. There are, of 
course, individual and unit cases where problems have been identified, 
but again they are anecdotal in nature. We will continue to monitor the 
available data closely to ensure there are no long-term negative 
effects.
    Question. When U.S. forces were initially deployed in support of 
the NATO mission in Bosnia they did not pursue war criminals. Such 
activity was considered outside the scope of the military tasks 
outlined in the Dayton Accords. As U.S. support of the Bosnia mission 
has evolved, and U.S. commanders have changed, there appears to be a 
greater willingness to pursue war criminals.
    What is the current U.S. policy concerning the pursuit and capture 
of war criminals in Bosnia?
    Answer. SFOR will only detain war criminals if they are encountered 
in the course of performing SFOR's mission and the tactical situation 
allows. And the policy is working. The British, Dutch, and US NATO 
operations to detain indicted war in Prijedor, Vitez, and Bijeljina 
were successfully conducted with no loss of life to NATO troops. In 
addition, as a result of intense U.S. diplomatic pressure 10 indicted 
Croats turned themselves into the Hague in October, 1997. More 
recently, the election of Milorad Dodik as the new prime minister of 
the Republika Srpska has improved the Serb government's stance on this 
issue. Dodik has publicly encouraged Serbs suspected of war crimes to 
turn themselves in, and several have complied. International pressure 
is on-going.

                    Bosnia--Pursuit of War Criminals

    Question. What funding changes have occurred to the Bosnia funding 
profile to facilitate greater activities in this area? Has OPTEMPO 
increased for this purpose?
    Answer. The funding profile remains consistent for Bosnia. We have 
not changed the Bosnia Supplemental to facilitate the pursuit of war 
criminals. As it stands now, all costs incurred by the commands that 
are in support of any CINCEUR mission are captured by those supporting 
commands for reimbursement and are included in the Bosnia supplemental. 
We have not increased the OPTEMPO for the purpose of actively pursuing 
war criminals.
    Question. Will the U.S. need to deploy different types of units in 
order to take a more active role in the pursuit of war criminals in 
Bosnia?
    Answer. Current policy is to apprehend within normal course of 
duties. There are United States forces in place which can carry out 
that part of the mission. Should there be a more active role, not 
currently contemplated, we will reevaluate military requirements.
    Question. Does DoD anticipate a need to beef up force protection in 
anticipation of the possible reaction of the local population to this 
policy?
    Answer. Presently, I believe our force protection posture is 
adequate to meet anticipated threats. The theater commander continually 
assesses the capability, equipment, awareness, and current force 
protection measures to ensure that they are sufficient to mitigate any 
possible reaction. I am confident he will employ additional measures if 
the situation warrants.

                         Bosnia Cost Estimates

    Question. Continued support of the NATO mission in Bosnia will 
involve a decrease, from 8,500 to 6,900, in the number of U.S. troops 
in country. Independent of the decision to extend this mission, the 
1998 funding provided so far is insufficient to support U.S. forces 
through June because the current funding level assumed U.S. presence 
would decline to 5,000 troops in country.
    The Committee understands that, independent of the decision to 
extend the Bosnia mission, the DoD does not have full funding to 
support the mission through June 1998. Why? What is the extent of this 
shortfall?
    Answer. The amount originally appropriated to support Bosnia 
operations through June now appears to be more than adequate. There has 
been a cost increased of $343 million for the additional troop support 
to cover the election period, which slipped from June 1997 to Sep/Oct, 
and to maintain the current force level of 8,500 troops in Bosnia 
through June 1998. (The FY 1998 President's budget request assumed only 
5,000 troops would be required as the NATO mission headed towards 
termination in June. Based on a reassessment of requirements, which 
included the impact of the municipal election slippage, it was decided 
to maintain a level of 8,500 troops in Bosnia.) Cost reductions have 
more than offset the increase. Specifically, requirements were reduced 
by $182 million for Army contract logistics support (LOGCAP) and 
reduced communications, TDY, lease and Intel systems requirements. 
Secondly, other fact-of-life changes reduced Bosnia requirements an 
additional $190 million. These fact-of-life adjustments included the 
elimination of JSTARS requirements (-$68 million), the deferral of base 
camp closures due to the mission extension (-$60 million), the movement 
of the carrier battle group to the Persian Gulf (-$16 million), and 
reduced Air Force OPTEMPO and mission support requirements (-$46 
million). Therefore, currently we estimate that about $29 million of 
funds originally appropriated can be reapplied to maintain our presence 
in Bosnia beyond June 1998 ($343 million less $182 million and $190 
million).
    Question. What additional funding is required in fiscal year 1998 
to extend the mission through the end of the fiscal year?
    Answer. Extension of Bosnia operations through the end of Fiscal 
Year 1998 requires an additional $516 million based on the probable 
NATO plan that would require about 6,900 U.S. troops in Bosnia. This 
estimate assumes that U.S. presence in Bosnia will be gradually reduced 
to the 6,900 level by October 1, 1998.
    Question. The Committee is aware the U.S. troops strength in 
country will decline from 8,500 to 6,900. This reduction is dependent 
on a pending NATO decision on force requirement. When do you anticipate 
that this decision will be made? If NATO decides that U.S. strength 
should remain at 8,500 what would be the additional funding 
requirements?
    Answer. NATO already has selected a mission option for the follow-
on force to the existing Stabilization Force (SFOR). The U.S. has 
announced that its contribution to that follow-on force will be reduced 
from the current level of 8,500 to 6,900. The Italian and Argentine 
governments have both expressed a strong desire to provide additional 
forces for new Specialized Units to support the International Police 
Task Force (IPTF) in its efforts to democratize and strengthen the 
indigenous public security apparatus. This will allow SFOR to better 
focus its resources and provide offsets to force reductions. 
Additionally, Belgium has also voiced a desire to increase their force 
contributions. A final number on total SFOR follow-up force troop 
strength will not be known until after the upcoming NATO Force 
Generation Conference.
    Question. The Committee has learned that the Air Force projects its 
Bosnia related costs will decline in fiscal year 1998. Why? How much 
will Air Force costs decline?
    Answer. In total, the Air Force Bosnia requirement for fiscal year 
1998 will decrease by $57.7 million. Fact-of-life reductions of $103.2 
million result from nondeployment of JOINT STARS, reduced OPTEMPO and 
transportation requirements, and a reduction of guard/reserve military 
personnel supporting Bosnia operations. This $103.2 million reduction 
is offset by an additional $45.5 million required for the 3 month 
extension of Bosnia operations from June through September. The balance 
of $57.7 million has been applied to the Army cost increases related to 
higher troop levels and the 3-month extension.
    Question. Army logistical and other support costs are projected to 
increase despite reductions in troop strength and more efficient 
contracting practice for logistical support (i.e., LOGCAP). Why will 
logistical and other support costs increase for the Army in Bosnia?
    Answer. The Army's logistic and other support costs are in fact 
decreasing due to efficiencies, better business practices, and 
negotiation of better contracts. The reason they appear to be 
increasing is because the troop level maintained for most of 1998 
(8,500) is almost double the level projected in the President's budget 
estimate (5,000). Additionally, the mission no longer will be 
terminated in June 1998, but will be extended to the end of the fiscal 
year, with the attendant additional costs. (The President's budget 
request for Bosnia was based on the assumption that the United States 
could reduce the troop strength to 5,000 for 1998 with an end of 
mission in June 1998.

                      Bosnia--Reconstitution Costs

    Question. Data developed for the Committee by the Surveys and 
Investigation staff indicates that the criteria for allowable 
reconstitution costs are applied more liberally to the Army than to the 
Air Force. These costs involve equipment maintenance and replenishment 
of supplies for units returning to their home station after having been 
deployed in support of contingencies. The S&I finds that a wide range 
of logistical and operational activities, funded as part of routine 
military operations, are reported as incremental contingency costs. As 
a result, reported incremental costs are not accurate and are inflated. 
What is the definition of ``reconstitution'' costs as they related to 
contingency operations?
    Answer. Reconstitution costs are all incremental costs associated 
with bringing the personnel and equipment back up to the same standard 
they were in prior to the deployment. Reconstitution ensures that 
forces are returned to appropriate deployable readiness postures.
    Question. How is this definition applied to each of the Services? 
What are the allowable reconstitution costs for each that are included 
in the Supplemental request? Please be specified as the types of costs 
that are included.
    Answer. The definition is applied equally to each Service; however, 
each Service is different in its structure, number and type of deployed 
units, and the type mission being performed in Bosnia. The Army's 
projected reconstitution costs for fiscal year 1998 are $67.7 million. 
For the Army, requirements include maintenance operations to replace 
broke and damaged part; performance of deferred services and repairs; 
and in some cases conducting rebuild and overhaul operations on 
vehicles, aircraft, and unit equipment. Also included are requirements 
to replace damaged, destroyed, or lost unit and personnel equipment; 
cleaning, packing, and returning equipment to the supply system or 
unit/war reserve status; and retraining back to Mission Essential Task 
List (METL) standards, especially for units that were not performing 
unit warfighting missions during the contingency operations.
    The Air Force's reconstitution requirements associated with Bosnia 
operations relate to bare base equipment and include, as applicable, 
the movement of equipment to a reconstitution site, cleaning and repair 
(sewing of tentage, replacing parts missing or damaged, etc.), and 
packing into storage containers for future use. The Air Force's 
reconstitution requirement in fiscal year 1998 for Bosnia operations is 
$1.5 million to reconstitute and transport the tent city at Aviano Air 
Base. Depot maintenance and spare parts that the Army includes as 
reconstitution requirements are financed by the Air Force through the 
incremental flying hour OPTEMPO costs.
    Question. Are there equipment maintenance or other logistical 
costs, similar in nature to reconstitution, that the Department will 
not incur because units are deployed in support of contingencies?
    Answer. Yes. There are cost avoidance offsets that are applied 
against the total contingency operations bill. The Department of 
Defense's policy is to report only incremental costs for contingency 
operations. We therefore reduce the total cost of the operation by the 
amount of funding already provided to the deploying units for their 
normal operations. For example, offsetting reductions are made for 
basic allowance for subsistence not paid, base operations support not 
provided, and budgeted training (to include flying hours/tank miles) 
not conducted by deployed units and personnel. These offsets include 
individual, small unit and collective training done at home station, 
routine maintenance, and other training such as command post exercises 
that will not be performed because the unit is deployed.

                           Iraq--Policy Goals

    Question. Airstrikes against Iraq were narrowly avoided last month 
after U.N. Secretary General Kofi Annan persuaded Saddam Hussein to 
fully cooperate in granting access to U.N. inspectors who are examining 
the Iraqis' Weapons of Mass Destruction program (WMD). The First two 
inspecitons since the agreement have occurred without any problems and 
with ``full cooperation'' from the Iraqi side.
    Mr. Secretary, as we sit here today, what is the status of the 
Iraqi WMD program. What needs to be accomplished under this current 
inspection regime to ensure that the threat posed by Iraq's WMD program 
has ended?
    Answer. Most of what we know about Iraq's WMD program is dervied 
from UNSCOM's reports to the Security Council. UNSCOM cannot certify 
Iraq's claim that it unilaterally destroyed its WMD programs as 
required under UN Security Council Resolution 687. These gaps in Iraq's 
declaration in combination with its active non-cooperation with UNSCOM 
leads UNSCOM to the conclusion that Iraq continues to harbor proscribed 
missiles, launchers and chemical and biological agents and munitions. 
The threat of Iraq's WMD program will end if and/or when UNSCOM can 
verify to the Security Council that Iraq has complied with the 
requirements to destroy its WMD and stop pursuing the production and 
R&D of these programs. Granting UNSCOM unfettered access to all 
suspected WMD sites is only part of the equation; Iraq must also 
furnish information that UNSCOM can use to verify Iraq's full final and 
complete declarations on these programs.
    Question. Are you satisfied with the initial level of Iraqi 
cooperation in fulfilling the terms of the new agreement.
    Answer. During the past several weeks, UNSCOM has tested Iraq's 
commitment to the Annan aggreement and I am please to report that thus 
far the Iraqis have cooperated by providing UNSCOM with unprecedented 
access. We remain very skeptical of Saddam's intentions however, and 
intend to watch his actions very closely. His commitment must be 
tested. We believe this will not be a short term effort. UNSCOM is 
preparing right now to conduct presidential site inspections as the 
next logical step in the testing process.
    Question. What is the Administration's position on the request of 
Russian that a Russian be named as a second deputy on the UN weapons 
inspection commission.
    Answer. We oippose forcing UNSOM to accept another deputy--one that 
they have not asked for. The crisis we just went through centered on 
UNSOM's independence and effectiveness. We should not undermine that 
principle. UNSCOM is a tightly run, effective organization whose 
structure is based on technical expertise not on any effort to balance 
regional affiliation. Appointing another deputy that artificially 
broden brodens regional representation with apparent gain in technical 
capability is entirely unjustified. We welcome Russian participation in 
UNSCOM. One of its chief analsyt plays a role in UNSCOM's missile 
efforts. We would welcome additional Russian technical experts as 
inspectors or on the New York staff.
    Question. General Anthony Zinni, Commander of CENTCOM has stated 
that he is ``sure that Saddam Hussein will break this new agreement. Do 
you share the General's view?
    Answer. Saddam Hussein has shown consistently that he honors 
agreements only when it is to his advantage; he likewise will break 
agreements when he who perceives advantage in doing so.
    Question. Mr. Secretary, General Shelton, please outline for the 
Committee the goals and objectives of present U.S. policy with regard 
to Iraq. In your answer please discuss:
     The composition of the force to be maintained in the 
region;
     the length of deployment of these forces;
     the benchmarks to be utilized in determining Iraqi 
compliance with the latest UN agreement;
     the consideration of other options for the long term 
containment of Iraq, such as extension of the no-fly zone, tightening 
economic sanctions, and increased financial and military support for 
Iraqi dissidents.
    Answer. Our goals and objectives in the Gulf are simple: to see 
that Saddam complies with all relevant United Nations Security Council 
Resolutions. Our forces are in-place to respond should he not comply, 
and to insure the security of the region.
     In the region we are maintaining an augmented force 
posture, consisting of two aircraft carrier battle groups along with a 
substantial cruise missile capability, over 100 land-based aircraft, 
and a brigade-sized task force in Kuwait.
     These forces will remain deployed until we are assured 
that Saddam will abide by his word. Once that is established, we are 
considering options to return to a more normal posture.
     The benchmarks to determine Iraq compliance with the 
latest UN Agreement are full, immediate, and unfettered across for 
UNSCOM, as called for in the Annan-Aziz Memorandum of Understanding and 
UNSCR 1154.
     These are among the options which have been discussed in 
the past and would be considered as the situation requires.
    Question. Does the Administration retain the right to conduct 
future air strikes against Iraq for non-compliance with the agreement, 
even in the absence of sanction by the UN Security Council?
    Answer. We will keep our military forces in the Gulf at a high 
state of preparedness while we see if Iraq lives up the commitment that 
it has signed. We remain resolved to secure by whatever means necessary 
Iraq's full compliance with its commitment destroy its WMD. We do not 
believe another Security Council resolution is necessary for us to use 
force should it become necessary.
    Question. General Shelton, how long can the OPTEMPO be maintained 
in the Persian Gulf to ensure the effectiveness of airstrikes should 
they become necessary?
    Answer. Our OPTEMPO can be maintained in the Persian Gulf as long 
as necessary given that threats in other locations remain at current 
levels. The Navy can maintain 2 carriers indefinitely within Global 
Naval Force Presence Policy schedules. However, the result will be 
reduced presence elsewhere. The Air Force can also maintain the current 
level of presence for a protracted period. However, it will have 
adverse effects on exercise support, air crew training, and quality of 
life issues. Low Density/High Demand assets managed careful management 
and will impact our ability to simultaneously support operations in 
other CINCs' Areas of Responsibility.

               Southwest Asia--Use of Gulf Allies' Bases

    Question. With the exception of Kuwait, the U.S. allies in the 
Persian Gulf have expressed an unwillingness to allow the U.S. to use 
bases in these countries for the purpose of launching strikes on Iraq. 
How has the attitude of our Persian Gulf allies effected the resource 
mix, and therefore the budget request in support of Southwest Asia?
    Answer. We consulted with our Persian Gulf allies before and during 
the crisis. We considered these consultations as we developed our 
military options and the forces required to execute these options. 
Ultimately, in no instance did a Persian Gulf ally refuse a request for 
stationing or supporting forces.
    The forces we deployed to the region were requested by CINCCENT 
based on his military judgment on what would be required in the event 
the National Command Authority directed him to take military action.
    Question. Has the position taken by our Persian Gulf Allies given 
rise to the need for two carrier battle groups in the Gulf?
    Answer. No. The augmented force mix for this crisis includes two 
aircraft carrier battle groups and is based on CINCCENT's 
recommendations. CINCCENT took into account the possible missions he 
might be ordered to conduct, the availability of forces, and the unique 
capabilities each element possesses.
    We are considering options to return to a more normal force 
structure when the situation warrants.
    Question. The Committee is aware that the Air Force maintains two 
Air Expeditionary Forces (AEFs) in the Gulf region should air strikes 
prove necessary. Does the attitude of our Persian Gulf allies call into 
question the utility of the AEFs? Can these assets be utilized fully if 
the U.S. cannot launch land based strikes against Iraq?
    Answer. First, let me explain that we normally deploy a single AEF 
to the Persian Gulf to fill the gap when a carrier battle group is not 
in the region. When the Iraqi crisis began in November, 1997, the 
Secretary decided, based on CINCCENT's military judgment, to leave that 
AEF in Bahrain in addition to the carrier. This is the only AEF we have 
deployed. A second carrier battle group was added to the force 
structure in February of this year.
    We were consulting with our Gulf allies during each of these 
deployment decisions. As a consequence, we were confident that we were 
not asking our allies for support beyond what they were able to 
provide. There was never any time at which we would not have been able 
to utilize land-based aircraft as required in our planned military 
options.
    Question. Does the budget request, particularly the buildup of Air 
Force assets, assume that the resistance of our Gulf allies to land 
based strikes would fade if hostilities began?
    Answer. I believe our Gulf allies would fully support military 
action consistent with our consultations with them. This budget request 
does not presuppose any opposition by our Gulf allies.

                   Southwest Asia--Rotation Schedule

    Question. The fiscal year 1998 supplemental budget request 
indicates that the current force levels will be deployed in Southwest 
Asia through the end of fiscal year 1998. Army and Air Force personnel 
will be deployed on a four month rotation cycle which means there will 
be a second rotation in June/July 1998. The second rotation will come 
to an end in October 1998 (fiscal year 1999). DoD informally advises 
that the fiscal year 1999 tail will be at least $250 million to cover 
the reconstruction and redeployment costs of the second troop rotation 
to Southwest Asia. The fiscal year 1998 Supplemental/fiscal year 1999 
Budget amendment indicates that all Southwest Asia costs are yet to be 
determined. Does the presence of U.S. troops in the region imply a 
fiscal year 1999 tail for this operation?
    Answer. The fiscal year 1999 budget amendment contains no cost 
estimate for requirements related to the higher force levels in 
Southwest Asia. However, if the higher force levels are maintained 
through or beyond the end of fiscal year 1998, an additional $252 
million for redeployment/reconstitution will be required in fiscal year 
1999 as well as any additional costs to sustain these forces.
    Question. Please explain to the Committee the reconstitution and 
redeployment costs that you anticipate the Department will incur in 
fiscal year 1999.
    Answer. Assuming all recently deployed forces redeploy in fiscal 
year 1999, it is estimated that minimum costs of about $252 million 
will be incurred in fiscal year 1999 to reconstitute and redeploy those 
forces. The Army and the Air Force costs would be approximately $124.4 
million and $27.4 million, respectively. The Navy's fiscal year 1999 
requirement is $93.0 million. In addition to covering redeployment and 
reconstitution, the estimate includes maintaining a 2.0 Carrier Battle 
Group and 1.0 Amphibious Readiness Group/Marine Expeditionary Unit 
presence through December 1998. In addition, the U.S. Special 
Operations Command will require $6.8 million in fiscal year 1999 for 
redeployment and reconstitution costs.

                     Southwest Asia Cost Estimates

    Question. Congress provided a total of $670 million to support a 
continued U.S. presence in the Persian Gulf. DoD estimates indicate 
that the current surge in U.S. presence will cost an additional $1.3 
billion. Army costs are driven by the increase in personnel from 2,900 
to 10,200, Navy and Marine Corps forces have increased from 1 to 2 
carrier battle groups plus 1 amphibious ready group, and the Air Force 
has increased the number of planes in the region by 57%. What are the 
total costs to expand the U.S. presence in the Persian Gulf?
    Answer. The total costs for force enhancements is $1,211 million. 
This includes costs associated with the additional force structure and 
related increased OPTEMPO requirements necessary to adequately respond, 
it needed, to continued Iraqi intransigence. This $1.2 billion 
requirement is based on sustaining this higher force structure through 
the remainder of fiscal year 1998. In addition, the supplemental 
identifies fact-of-life increases of $150 million required for higher 
force protection costs and increased operating costs to sustain 
previously planned OPTEMPO levels. This $150 million would have been 
required even if no additional forces had been deployed. The total 
requested in the fiscal year 1998 Emergency Supplemental related to 
Southwest Asia is $1,361.4 million.
    Question. The Committee understands there is at least $250 million 
in costs that will be incurred in fiscal year 1999. This is the tail 
for deployment through the end of fiscal year 1998. What are the costs 
that comprise this 1999 tail?
    Answer. As previously described, a total of approximately $250 
million would be required in fiscal year 1999 to redeploy and 
reconstitute the forces supporting the enhanced presence in Southwest 
Asia to include maintaining the Navy presence through December 1998.

                 Southwest Asia Cost Estimates--OPTEMPO

    Question. OPTEMPO is up for the Air Force because of the increased 
number of planes. However, is the increased number of planes flying 
longer sorties than previously in Enhanced Southern Watch?
    Answer. No. Looking at the monthly average of a representative 
sample of weapons systems, E-3s, RC-135s, and U-2s, there are no 
significant differences between their flying times between September 
1997 and March 1998. With regard to other weapon systems such as the F-
16, the average sortie time has remained similarly static.

               Southwest Asia Cost Estimates--Spare Parts

    Question. The Committee is aware that the Air force has had to 
cannibalize CONUS-based aircraft to assemble the spares kits to support 
deployment. Does the Air Force estimate for Southwest Asia make any 
special allowances to ensure an adequate supply of parts is available 
for this deployment?
    Answer. The Air Force deploys with Readiness Spares Packages which 
are built to support a 30 day deployment with no resupply. These kits 
deploy with a unit and serve as a source of spare parts until demand 
levels can be established at the deployed location. To the extent these 
kits have shortages prior to a deployment, the units may cannibalize 
parts from non-deploying aircraft to fill selected shortages rather 
than wait for items from depot. Filling these initial shortages is part 
of the baseline operating program. The Air Force estimate for Southwest 
Asia (SWA) represents the incremental flying hour spare parts 
requirements/costs incurred in support of SWA. These funds pay for the 
repair or replacement of material used in flying deployed missions.

                       SWA Contingency Operations

    Question. Does the Army have adequate basing to support the 
increase in the number of troops in the region?
    Answer. There are existing bases and facilities in Southwest Asia 
that can support the additional 7,300 troops in the region.
    Question. Does the Army estimate include a component for contractor 
provided logistical support (LOGCAP)? If so, how much?
    Answer. The Army does not plan on using contractor logistic support 
(LOGCAP) for the current operation in Southwest Asia and has not 
included any costs for LOGCAP in the Army's estimate.

              Bosnia and Southwest Asia--Force Protection

    Question. Congress passed a fiscal year 1996 Supplemental 
Appropriations Act totaling $122.6 million to improve force protection 
in the wake of the Kobar Towers bombing.
    In light of current tensions in the Persian Gulf, does the 
supplemental request provide for any additional force protection 
measures?
    Answer. Yes, it includes $16.6 million for additional force 
protection measures. The Army request provides approximately $11 
million for force protection. This includes costs for the forces that 
recently deployed plus annual costs for Infantry units assigned to 
force protection missions for the Patriot batteries routinely deployed 
for Operation Southern Watch. The Air Force has identified requirements 
for additional force protection measures costings $5.6 million for 
additional barriers, sand bags, and other fortification items such as 
concertina wire, to protect the additional forces deployed to the 
Persian Gulf.
    Question. The Committee is aware that there are cost increases 
attributable to improved force protection in Bosnia. How much 
additional funding has the Department requested for such force 
protection in the fiscal year 1998 Supplemental? In the 1999 budget 
amendment?
    Answer. For additional force protection in Bosnia, an Army 
requirement of $6.4 million is included in the fiscal year 1998 
Emergency Supplemental and $5.9 million is include in the fiscal year 
1999 budget amendment.

             Overseas Contingency Operations Transfer Fund

    Question. The Supplemental Appropriations request proposes language 
that would allow the transfer of funds from the Overseas Contingency 
Operations Transfer Fund, and Operation and Maintenance account, to 
procurement, and to the Defense Health Program. Why?
    Answer. The Defense Health Program has incurred costs for Overseas 
Contingency Operations during fiscal year 1998 in Bosnia (Operations 
Joint Guard/Deliberate Guard, formerly known as IFOR and Pre-IFOR) and 
Iraq (Operations Northern Watch, formerly known as Provide Comfort, and 
Enhanced Southern Watch).
    Question. What are the procurement requirements in support of 
Bosnia? Southwest Asia?
    Answer. The DHP has no Procurement requirements in support of 
Bosnia or Southwest Asia. The DHP has incurred Operation and 
Maintenance (O&M) costs in support of Overseas Contingency Operations 
to date.
    Question. What are the Defense Health Program (DHP) requirements?
    Answer.

                                                                  $ in M
Bosnia's Joint Guard/Deliberate Guard.........................      16.3
Iraq's Northern Watch.........................................       0.1
Iraq's Enhanced Southern Watch................................       1.3
                    --------------------------------------------------------------
                    ____________________________________________________

    Total fiscal year 1998 O&M requirements \1\...............      17.7

\1\ Requirement is based on anticipated continuation of fiscal year 
operations due to current political situation.
---------------------------------------------------------------------------

                           Drawdown Authority

    Question. The fiscal year 1998 Supplemental request includes $50 
million for drawdown authority. Section 506 of the Foreign Assistance 
Act of 1961 allows the President to authorize the drawdown of DoD 
services and equipment to support other nations. In this case, funding 
would go toward providing airlift to allied countries supporting U.S. 
operations in Southwest Asia. This airlift would transport troops from 
Poland, Hungary, the Czech Republic, Senegal, Romania and Argentine to 
the Persian Gulf. The Air Force advises that the President has not yet 
signed the orders authorizing the use of drawdown authority. Has the 
President yet approved the requested drawdown authority?
    Answer. No.
    Question. Is $50 million a firm estimate of the support the US will 
provide?
    Answer. No, If Iraq complies with UN inspectors, and its WMD stocks 
are destroyed, the US may not need to increase military pressure. The 
foreign forces that have identified a need for US airlift are currently 
being held in country and will not be called into action unless the 
situation in the Gulf deteriorates. Our initial $50 million request for 
drawdown authority would have allowed the US to provide the airlift 
needed in that event. The amount requested was equivalent to that 
authorized in the Haiti emergency. We believe that amount was likely to 
be the maximum initially needed in the contingencies expected at the 
time; actual drawdowns under the authority would be less in more 
favorable contingencies.
    Question. What services do you anticipate that the Department will 
provide for this funding, and to what nations? Please be specific.
    Answer. The services fall into two categories: (1) Strategic 
airlift into and from theater. Some countries that have volunteered 
troop contributions do not have the airlift assets to self-deploy nor 
the financial resources to reimburse us for this service. This applies 
principally to East European partners, such as Czech Republic, Estonia, 
Lithuania and others. We are looking at ways to minimize the US burden 
in this regard, such as by utilizing transport aircraft offered by 
other countries such as Norway and Denmark. (2) Sustainment 
(consumables) in theater. Principal commodities include water, fuel, 
and rations. We hope to minimize these costs by persuading host nations 
(e.g., Kuwait) to provide these services as assistance in kind. All 
nations with air or ground contingents in theater will be in need of at 
least these three basic services.

    [Clerk's note.--End of questions submitted by Mr. Young.]


                           W I T N E S S E S

                              ----------                              
                                                                   Page
Benken, E. W.....................................................     1
Blanck, Lt. Gen. R. R............................................   149
Cohen, Hon. W. S.................................................   543
Crouch, Gen. W. W................................................   337
Eberhart, Gen. R. E..............................................   337
Hagan, John......................................................     1
Hall, R. E.......................................................     1
Koenig, Vice Adm. H. M...........................................   149
Lee, L. G........................................................     1
Lynn, W. J.......................................................   543
Martin, Dr. E. D.................................................   149
Neal, Gen. R. I..................................................   337
Pilling, Adm. D. L...............................................   337
Ralston, Gen. J. W...............................................   543
Roadman, Lt. Gen. C. H...........................................   149


                               I N D E X

                              ----------                              

 FISCAL YEAR 1998 SUPPLEMENTAL APPROPRIATIONS FOR BOSNIA AND SOUTHWEST 
                                  ASIA

                                                                   Page
Balkan Deployments...............................................   578
Base Closure Rounds, Additional..................................   581
Bosnia Contingency Operation:
    Cost Estimates...............................................   610
    Force Presence in Bosnia.....................................   585
    Mines in Bosnia..............................................   599
    Policy Objectives in Bosnia..................................   596
    Pursuit of War Criminals.....................................   609
    Reconstitution Costs.........................................   611
    Refugees in Bosnia...........................................   589
    Reserve Forces...............................................   608
    United States Force Presence in Bosnia.......................   574
Bosnia and Southwest Asia Contingency Operations:
    Force Protection.............................................   615
    Supporting the Two Major Regional Conflicts (MRC) Scenario...   603,
 604, 607
    Timely Passage of the 1998 Supplemental Appropriations Act...   605
Budget Savings, Defense..........................................   575
Budget Shortfalls................................................   576
Carrier Deployments in the Gulf Region...........................   600
Drawdown Authority...............................................   616
Fiscal Year 1998 Supplemental Request............................   580
    Budget Offsets for the Supplemental Request..................   601
    Impact of Supplemental Offsets...............................   590
International Monetary Fund (IMF)................................   574
Introduction.....................................................   543
    Bosnia Operations............................................   544
    Iraq and Bosnia..............................................   544
    Persian Gulf Costs...........................................   544
    Supplemental Request.........................................   543
Iraq--Policy Goals...............................................   612
Kosovo....................................................580, 595, 600
    Violence in Kosovo...........................................   607
Overseas Contingency Operations:
    Budgeting for................................................   584
    Burdensharing in Contingency Operations......................   594
    Financial Commitments to Overseas Contingency Operations.....   586
Overseas Contingency Operations Transfer Fund....................   615
Quality of Life Issues...........................................   591
Readiness Shortfalls.............................................   573
Readiness Trends.................................................   578
Remarks of Mr. Livingston........................................   572
Remarks of Mr. Murtha............................................   545
Risks in Western Pacific Associated with Deployment of USS 
  ``Independence''...............................................   603
Risks to Two Major Regional Conflicts (MRC) Scenario Due to 
  Overextension of High Value Assets.............................   604
Section 900 Allowances...........................................   582
Southwest Asia Contingency Operations............................   616
    Cost Estimates...............................................   614
    Cost Estimates--Operation Tempo (OPTEMPO)....................   614
    Cost Estimates--Spare Parts..................................   615
    Rotation Schedule............................................   614
    Use of Gulf Allies' Bases....................................   613
Statement of General Joseph W. Ralston...........................   566
Statement of Secretary William S. Cohen..........................   558
Summary Statement of General Ralston.............................   564
    Impact of Supplement Funds...................................   564
    Supplemental Budget Request..................................   564
Summary Statement of Secretary Cohen.............................   546
    Bosnia Deployment............................................   546
    International Monetary Fund (IMF) Funding....................   556
    Lack of Supplemental Funds...................................   549
    Site Inspections.............................................   548
    Southwest Asia...............................................   547
United Nations Dues..............................................   557

                            MEDICAL PROGRAMS

Accreditation....................................................   292
Anthrax Vaccine..................................................   328
Automation.......................................................   320
Beneficiaries, Improved Communication with.......................   312
Blood Supplies...................................................   264
    Navy Blood Bank..............................................   270
        Food and Drug Administration Investigation of............   327
Bosnia, Medical Deployment to....................................   329
Brain Injury Project, Funding for................................   280
Centers of Excellence............................................   314
Composite Health Care System (CHCS)..............................   330
Credentialing....................................................   304
Customer Satisfaction, Improve...................................   313
Diabetes Management..............................................   275
Fiscal Year 1999 Budget Request..................................   281
    Funding Shortfalls, Department of Defense Healthcare.........   245
    New Initiatives in the Budget................................   283
    Problems Despite Adequate Funding............................   282
Force Health Protection Program (FHP)............................   277
General Medical Officer Accessions, Phase Out of.................   316
Gulf War Illness...............................................276, 330
Healthcare Consumer Committees, Establishment of.................   311
Introduction.....................................................   149
Life Support for Trauma and Transport (LSTAT).............259, 277, 280
Medical Inflation (Technology and Intensity).....................   281
Medical Licenses, Eliminate the Use of Providers with Invalid....   311
Medical Malpractice..............................................   273
    Dayton Daily Articles........................................   278
    Physicians and Providers Cited for Malpractice In The Dayton 
      Series, Status of..........................................   305
    Treatment of Department of Defense Litigants.................   254
Military Health Services System Weaknesses, Evaluate.............   318
National Quality Management Program, Strengthen the..............   319
Patient Care and Evaluation, Outcomes of.........................   301
    Patient Data and Information.................................   299
    Patient Handbook.............................................   313
Performance Measurement..........................................   304
Quality of Military Healthcare...................................   249
    for Military Dependents......................................   261
    Plan to Improve the..........................................   308
    Quality Management Report....................................   314
Readiness........................................................   272
Remarks of Mr. Cunningham........................................   260
Remarks of Mr. Murtha............................................   149
Retirees, Healthcare Commitment to Military....................246, 267
Smoking Cessation................................................   274
Statement of Vice Admiral Harold M. Koenig.......................   203
Statement of Doctor Edward D. Martin.............................   152
Statement of Lieutenant General Ronald R. Blanck.................   179
Statement of Lieutenant General Charles H. Roadman...............   226
Subvention.......................................................   261
Summary Statement of Admiral Koenig..............................   200
Summary Statement of Doctor Martin...............................   152
Summary Statement of General Roadman.............................   223
Support Staff for Department of Defense Healthcare...............   248
TRICARE Program..................................................   275
    Competition..................................................   249
    Contract Awards..............................................   268
    Contract Resource Sharing....................................   325
    Implementation...............................................   315
    Regions 2 and 5 TRICARE Contract Award Anthem Alliance.......   325
    Sierra Health Services TRICARE Contract......................   323
Uniformed Services Treatment Facilities (USTFs)...........265, 276, 321
Uniformed Services University for Health Sciences (USUHS)........   291
Year 2000 Computer Problem.......................................   335

                    PERSONNEL QUALITY OF LIFE ISSUES

Bosnia and Southwest Asia Supplemental Request...................   134
Child Care and Family Advocacy Programs..........................   115
Citizenship Requirements.........................................    70
Commissaries, Defense............................................   137
Contingency Operations, Funding for..............................    75
Demographics of Enlistees........................................    66
Department of Defense Dependents Schools (DoDDS).................   117
Deployment Pay...................................................   100
Drug Testing.....................................................   144
Entitlements and Compensation Issues.............................    58
Financial Conditions of Military Members.........................    84
Health Care and Other Issues....................................77, 141
Introduction.....................................................     1
Military Occupational Specialties (MOSs).........................    69
Military Operations Other Than War (MOOTW).......................   133
Morale of Military Personnel.....................................    72
Navy Career Sea Pay..............................................    61
Pay Raise Gap....................................................    71
Personnel Issues.................................................    60
Personnel Tempo (PERSTEMPO)......................................   103
Privatization Program............................................   139
Quality of Life for Navy Personnel...............................    76
Recruiting and Retention Issues..................................    96
    Recruiter Force..............................................    92
    Recruiting Enlisted Personnel................................    87
    Recruiting Incentives........................................    68
Readiness of Enlisted Forces.....................................   111
Remarks of Mr. Young.............................................    14
Statement of Chief Master Sergeant Eric W. Benken................    40
Statement of Master Chief Petty Officer John Hagan...............    16
Statement of Sergeant Major Robert E. Hall.......................     4
Statement of Sergeant Major Lewis G. Lee.........................    31
Summary Statement of Chief Master Sergeant Benken................    39
Summary Statement of Master Chief Petty Officer Hagan............    14
    Pay and Allowances...........................................    14
    Summary......................................................    15
    Tempo of Operation...........................................    15
Summary Statement of Sergeant Major Hall.........................     2
Summary Statement of Sergeant Major Lee..........................    29
    Recruiting and Retention.....................................    29
    Summary......................................................    30
    Tempo of Operations..........................................    29
Support Activities, Other........................................    79
Training Issues..................................................   129
    Gender Integrated Training..............................63, 78, 118
Women in the Military............................................    64

                   READINESS OF UNITED STATES FORCES

Air Force Deployments and Force Structure........................   482
Base Realignment and Closure (BRAC)..............................   541
Cannibalization...........................................401, 403, 490
Cold Weather Gear................................................   412
Commissary Operations............................................   495
Contingency Operations:
    Effect on Long-Term United States Commitments................   480
    Effect on Non-Deployed Unit Readiness........................   481
Cross-Decking and Navy Readiness.................................   487
Deployable Force, Changes in the Size of the.....................   417
Depot Maintenance................................................   496
Fiscal Year 1998 Supplemental Appropriations...................398, 481
    Effect of No Supplemental Appropriations.....................   481
Force Modernization..............................................   399
Force Structure Requirements.....................................   416
Funding for Joint Readiness Training Center (JRTC) and European 
  Training Rotations.............................................   487
Information Technology, Vulnerability of.........................   536
Introduction.....................................................   337
Joint Training Reductions........................................   416
Land Forces Readiness Training Funding...........................   485
Medical Care.....................................................   518
Modernization, Department of Defense.............................   521
    and Research and Development Requirements....................   401
Morale of Deployed Personnel.....................................   479
National Training Center (NTC) and Readiness...................486, 487
Non-Deployable Personnel.........................................   422
Operations Other Than War (OOTW) and Degradation of Combat Skills   483
Operations Tempo (OPTEMPO) and Deployments.......................   413
Personnel Tempo (PERSTEMPO)......................................   511
Privatization Program............................................   538
Procurement and New System Development, Balancing................   408
Readiness Issues:
    Aviation Readiness...........................................   489
    Balancing Readiness and Modernization........................   400
    Definition...................................................   424
    Measuring Readiness........................................409, 419
    National Guard Readiness.....................................   404
    Overall Readiness of United States Forces....................   477
    The Readiness Reporting System...............................   529
Real Property Maintenance (RPM)..................................   498
    Recruiting and Retention Issues..............................   505
    Enlisted Personnel, Recruiting...............................   500
    Quality Personnel, Recruiting................................   504
Remarks of Mr. Young.............................................   398
Reprogramming Operation and Maintenance Funds....................   526
Reserve Components, Modernizing and Integrating the..............   420
    Air National Guard (ANG) and Air Force Reserve (AFR).........   407
Spare and Repair Parts.........................................403, 492
Statement of Admiral Donald L. Pilling...........................   353
Statement of General Ralph E. Eberhart...........................   382
Statement of General Richard I. Neal.............................   364
Statement of General William W. Crouch...........................   340
Summary Statement of Admiral Pilling.............................   352
Summary Statement of General Crouch..............................   337
Summary Statement of General Eberhart............................   381
Summary Statement of General Neal................................   363
Training and Asymmetric Threats..................................   499
TRICARE program..................................................   406
Trucks...........................................................   409

                                

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