[House Hearing, 107 Congress]
[From the U.S. Government Publishing Office]




                  MILITARY CONSTRUCTION APPROPRIATIONS

                                FOR 2002

_______________________________________________________________________

                                HEARINGS

                                BEFORE A

                           SUBCOMMITTEE OF THE

                       COMMITTEE ON APPROPRIATIONS

                         HOUSE OF REPRESENTATIVES

                      ONE HUNDRED SEVENTH CONGRESS
                              FIRST SESSION
                                ________
          SUBCOMMITTEE ON MILITARY CONSTRUCTION APPROPRIATIONS
                     DAVID L. HOBSON, Ohio, Chairman
 JAMES T. WALSH, New York            JOHN W. OLVER, Massachusetts
 DAN MILLER, Florida                 CHET EDWARDS, Texas
 ROBERT B. ADERHOLT, Alabama         SAM FARR, California
 KAY GRANGER, Texas                  ALLEN BOYD, Florida
 VIRGIL H. GOODE, Jr., Virginia      NORMAN D. DICKS, Washington 
 JOE SKEEN, New Mexico
 DAVID VITTER, Louisiana            
                      
 NOTE: Under Committee Rules, Mr. Young, 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.
  Valerie L. Baldwin, Brian L. Potts, and Mary C. Arnold, Subcommittee 
                                 Staff
                                ________
                                 PART 5
                                                                   Page
 Overview: OSD, Army, Navy, and Air Force.........................    1
 Quality of Life..................................................  159
 Quality of Family Life in the Military...........................  249
 European Command.................................................  335
 Historic Properties..............................................  421
 Housing Privatization............................................  575
 U.S. Pacific Command.............................................  677
 Quality of Life in Korea.........................................  741
 Testimony Submitted for the Record...............................  859
                                ________
                     U.S. GOVERNMENT PRINTING OFFICE
 74-873                     WASHINGTON : 2001




                        COMMITTEE ON APPROPRIATIONS

                   C. W. BILL YOUNG, Florida, Chairman

 RALPH REGULA, Ohio                  DAVID R. OBEY, Wisconsin
 JERRY LEWIS, California             JOHN P. MURTHA, Pennsylvania
 HAROLD ROGERS, Kentucky             NORMAN D. DICKS, Washington
 JOE SKEEN, New Mexico               MARTIN OLAV SABO, Minnesota
 FRANK R. WOLF, Virginia             STENY H. HOYER, Maryland
 TOM DeLAY, Texas                    ALAN B. MOLLOHAN, West Virginia
 JIM KOLBE, Arizona                  MARCY KAPTUR, Ohio
 SONNY CALLAHAN, Alabama             NANCY PELOSI, California
 JAMES T. WALSH, New York            PETER J. VISCLOSKY, Indiana
 CHARLES H. TAYLOR, North Carolina   NITA M. LOWEY, New York
 DAVID L. HOBSON, Ohio               JOSE E. SERRANO, New York
 ERNEST J. ISTOOK, Jr., Oklahoma     ROSA L. DeLAURO, Connecticut
 HENRY BONILLA, Texas                JAMES P. MORAN, Virginia
 JOE KNOLLENBERG, Michigan           JOHN W. OLVER, Massachusetts
 DAN MILLER, Florida                 ED PASTOR, Arizona
 JACK KINGSTON, Georgia              CARRIE P. MEEK, Florida
 RODNEY P. FRELINGHUYSEN, New Jersey DAVID E. PRICE, North Carolina
 ROGER F. WICKER, Mississippi        CHET EDWARDS, Texas
 GEORGE R. NETHERCUTT, Jr.,          ROBERT E. ``BUD'' CRAMER, Jr., 
Washington                           Alabama
 RANDY ``DUKE'' CUNNINGHAM,          PATRICK J. KENNEDY, Rhode Island
California                           JAMES E. CLYBURN, South Carolina
 TODD TIAHRT, Kansas                 MAURICE D. HINCHEY, New York
 ZACH WAMP, Tennessee                LUCILLE ROYBAL-ALLARD, California
 TOM LATHAM, Iowa                    SAM FARR, California
 ANNE M. NORTHUP, Kentucky           JESSE L. JACKSON, Jr., Illinois
 ROBERT B. ADERHOLT, Alabama         CAROLYN C. KILPATRICK, Michigan
 JO ANN EMERSON, Missouri            ALLEN BOYD, Florida
 JOHN E. SUNUNU, New Hampshire       CHAKA FATTAH, Pennsylvania
 KAY GRANGER, Texas                  STEVEN R. ROTHMAN, New Jersey    
 JOHN E. PETERSON, Pennsylvania
 JOHN T. DOOLITTLE, California
 RAY LaHOOD, Illinois
 JOHN E. SWEENEY, New York
 DAVID VITTER, Louisiana
 DON SHERWOOD, Pennsylvania
   
 VIRGIL H. GOODE, Jr., Virginia     
                                    
                 James W. Dyer, Clerk and Staff Director

                                  (ii)
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             MILITARY CONSTRUCTION APPROPRIATIONS FOR 2001

                              ----------                              --
--------

                                             Monday, July 23, 2001.

                OVERVIEW, OSD, ARMY, NAVY, AND AIR FORCE

                               WITNESSES

DOV ZAKHEIM, UNDER SECRETARY OF DEFENSE (COMPTROLLER)
RAYMOND F. DuBOIS, DEPUTY UNDER SECRETARY OF DEFENSE, INSTALLATIONS AND 
    ENVIRONMENT
PAUL W. JOHNSON, DEPUTY ASSISTANT SECRETARY OF THE ARMY (INSTALLATIONS 
    AND HOUSING)
MAJOR GENERAL ROBERT VAN ANTWERP, ASSISTANT CHIEF OF STAFF, 
    INSTALLATIONS AND MANAGEMENT
MAJOR GENERAL JAMES HELMLY, COMMANDER, 78TH DIVISION TRAINING SUPPORT, 
    U.S. ARMY RESERVE
BRIGADIER GENERAL MICHAEL SQUIER, DEPUTY DIRECTOR, ARMY NATIONAL GUARD
DUNCAN HOLADAY, DEPUTY ASSISTANT SECRETARY OF THE NAVY, INSTALLATIONS 
    AND FACILITIES
REAR ADMIRAL MICHAEL JOHNSON, COMMANDER, NAVAL FACILITIES ENGINEERING 
    COMMAND
BRIGADIER GENERAL SELECT MICHAEL LEHNERT, COMMANDING GENERAL, 2ND FORCE 
    SERVICE SUPPORT GROUP, MARINE CORPS BASE CAMP LEJEUNE
REAR ADMIRAL NOEL PRESTON, DEPUTY DIRECTOR, U.S. NAVAL RESERVE
JIMMY DISHNER, DEPUTY ASSISTANT SECRETARY OF THE AIR FORCE, 
    INSTALLATIONS
MAJOR GENERAL EARNEST O. ROBBINS II, THE AIR FORCE CIVIL ENGINEER, 
    DEPUTY CHIEF OF STAFF OF INSTALLATIONS, AND LOGISTICS
MAJOR GENERAL PAUL A. WEAVER, JR., DIRECTOR, AIR NATIONAL GUARD
BRIGADIER GENERAL ROBERT DUIGNAN, DEPUTY CHIEF OF STAFF, AIR FORCE 
    RESERVE

                       Statement of the Chairman

    Mr. Hobson [presiding]. The hearing will come to order. 
Good afternoon.
    The hearing today will be an overview hearing on the 
services' fiscal year 2002 budget request. We have numerous 
witnesses here today, some at the table and some around the 
room.
    We have from OSD the Honorable Dov Zakheim, Undersecretary 
of Defense, Comptroller and chief financial officer, a guy who 
I talk with on the phone, all the time at home, even when I am 
out in my garden.
    Mr. Ray DuBois, Deputy Undersecretary of Defense, 
Installations and Environment.
    Mr. Paul Johnson, Deputy Assistant Secretary of the Army, 
Installations and Housing. Oh, you have your new pin on, too.
    Major General Robert Van Antwerp, Assistant Chief of Staff 
for Installations and Management, back there; Major General 
James Helmly, Commander, 78th Divisional Training Support, U.S. 
Army Reserve; Brigadier General Major Squier, Deputy Director, 
Army National Guard; Duncan Holaday from the Navy, Deputy 
Assistant Secretary of the Navy, Installations and Facilities; 
Rear Admiral Michael Johnson, Commander, Naval Facilities 
Engineering Command; Brigadier General Select Michael Lehnert, 
Commanding General, 2nd ForceService Support Group, Marine 
Corps Base Camp Lejeune; Rear Admiral Noel Preston, Deputy Director of 
Naval Reserve.
    It is nice to see the Marines and the Navy sitting 
together. [Laughter.]
    From the Air Force, Jim Dishner, Deputy Assistant Secretary 
of the Air Force, Installations; Major General Earnie Robbins, 
the Air Force civil engineer, Deputy Chief of Staff of 
Installation and Logistics; Major General Paul Weaver, 
Director, Air National Guard.
    Paul, good to see you.
    Brigadier General Robert--I knew I was going to mess his 
name up, and I should know him because he is from Wright 
Patterson Air Force Base, and he is the Deputy Chief of Staff 
of the Air Force Reserve, and I always mispronounce his name--
Duignan, but I always want to say Dunnigan for some reason.
    I want to thank you all for coming to testify for us today.
    Today's hearing is a little unorthodox, so I must ask 
everyone to be a little accommodating. There may be time when 
witnesses need to approach the table to speak, so feel free to 
do so.
    We usually have a separate hearing for each service, but 
due to the delay in receiving the budget, scheduling conflicts 
and a House rule that prohibits holding a hearing when the full 
Appropriations Committee is considering a bill or has one on 
the floor, we have scheduled the hearings together. We also 
have a defense hearing going on at the same time.
    Everybody better understand these mikes are all on all the 
time, so any unseemly comments will be picked up and duly 
noted. [Laughter.]
    The Fiscal Year 2002 President's budget, unlike previous 
years, was a pleasant surprise. With almost $2 billion above 
last year's request, this budget begins to address key concerns 
this subcommittee has expressed for years. I am encouraged by 
the new emphasis on sustainment, restoration and modernization. 
This approach promotes the preservation of the services' 
infrastructure, while repairing and replacing facilities where 
appropriate.
    I am also glad to see the inclusion of contingency funds in 
all the services' requests. Additionally, we anticipate the use 
of installation status reports as an integral approach to 
justifying the president's military construction budget. My 
hope is that these initiatives will improve the way we manage 
and budget for our facilities in the department.
    Let me also commend you on the commitment to overseas 
military construction and quality of life. We cannot forget 
about our soldiers, sailors and Marines and airmen stationed 
overseas. And I cannot emphasize that too highly from the 
travels we have seen around the world.
    There were several items that I am not sure we will get to 
today, but would like to mention. First, we were all very happy 
to see the additional $400 million for family housing, but we 
have some concerns with its distribution, specifically the OSD 
directive that 80 percent of those dollars be executed by 
privatization. This directive not only does not make sense for 
those bases unable to get a privatization deal because of poor 
inventory conditions, but it also lets projects that fix 
falling housing go unfunded.
    Secondly, proposing an increase in the threshold of Davis-
Bacon and using the estimated savings as an offset of $76 
million in the budget seems short-sighted at best. I can tell 
you right now, this proposal will never be enacted, and because 
of its inclusion in the president's request, we have to absorb 
an additional $76 million for the budget.
    Finally, we are cautiously awaiting the details of the 
Secretary's Efficient Facilities Initiative. It had an unseemly 
name before. I am not sure I like that one either.
    But despite this, we will continue to work with you and 
your staff, as we always have, to provide the best military 
construction budget we can for the men and women of our Armed 
Forces. Our current schedule has us marking up on September 6, 
just after the August recess. This is, of course, subject to 
change, as everything else is around here.
    Before I yield to my ranking member, let me take this 
moment to recognize Paul Johnson. This is the last hearing he 
will be testifying at because, after 52 years of service, 18 
years in his current capacity, he has decided to retire.
    On behalf of the subcommittee, Paul, let me recognize you 
for your many years of service, and I have very much enjoyed 
working with you in the last couple of years.
    Now let me recognize our distinguished ranking minority 
member, Mr. John Olver of Massachusetts, for any opening 
remarks he might wish to make.
    John.
    Mr. Olver. Thank you, Mr. Chairman. I assume that the date 
of September 6 is chosen so that the staff will not be bothered 
by those of us who are otherwise on recess making requests 
while they are trying to put together a budget.
    Mr. Hobson. Well, I hope that we have it all put together 
before then. [Laughter.]
    Mr. Olver. Thank you, Mr. Chairman.
    And also to Paul Johnson, thank you very much for your 
service. It has been a pleasure to work with you over time. You 
have always been a bringer of cautious candor to us and made 
sure that we knew what the administration's position was, but 
also helping us understand what the context of that position, 
not solely the position in a royal way.
    I am really pleased to have the group of testifiers here 
today, Secretary Zakheim, Secretary DuBois, and all the others 
who were painstaking enumerated by the chairman. I will not 
feel any need to go through that.
    This has been a somewhat unusual year for the budget, as 
the chairman has suggested, and I am happy that we are finally 
getting a chance to have a hearing on this year 2002 request.
    As a big picture, at least my sense of it, I see a number 
of changes. We have a commendable effort to improve the 
military housing and workplaces, which we havebeen very much 
committed to over sometime. I see another round of BRAC; it is now 
called Efficient Facilities Initiative. Congress would not listen to 
the previous administration when it was called BRAC; I trust that the 
new change in the name makes it perfectly acceptable.
    No matter what you call it or who proposes it, I have seen 
enough of our military installations at this point to know that 
we need it. So that is a major initiative here.
    Add to that the strategic review, which right now seems to 
be bringing answers back to the administration that the 
administration did not really want to hear about in relation to 
the size of the forces--namely, more, not less--and then add to 
that mix we have the increased emphasis on missile defense 
program, and I think that gives us some big, major issues to 
take up in this process. The uncertainties in the missile 
defense program are, of course, the price, although it is 
large, whether it really can do the job and how it will affect 
the relationships with our allies and our friends.
    So with change comes uncertainty and often opportunity, and 
we need to work hard to make certain that we invest today's 
dollars in project that make sense for the future. But then 
that is the best way that we can make a contribution to the 
national security and to the men and women who serve us in the 
military, along with their families.
    So I thank you, Mr. Chairman, for giving me that moment of 
introduction, and I am waiting breathlessly.
    Mr. Hobson. Thank you, John.
    I might say, John has been a very good ranking member. He 
has gone with me all over and we have looked at all this stuff 
and we are still looking. And so you may see us show up 
anywhere, anytime, checking out some of this stuff. You know, I 
think it is good when all of you can go along with us, too, and 
we hope we are not an impediment, we hope by learning and 
understanding and bringing other members along, we are bringing 
converts to what our young people do overseas.
    I guess, Dov, you are up now, Doctor.

               Statement of the Honorable Dov S. Zakheim

    Mr. Zakheim. Thank you, Mr. Chairman.
    Mr. Hobson. You got your runway, did not you?
    Mr. Zakheim. I got the runway, and I thank you for that. 
That was really a major effort on your part and on the part of 
this committee, given what had happened. So let me go on the 
record and thank you.
    Mr. Chairman and Congressman Olver and members of the 
committee, I really do thank you for providing me and Deputy 
Undersecretary Ray DuBois, whom you all know, and the rest of 
this rather large panel the opportunity to present the 
President's 2002 Department of Defense military construction 
budget.
    And I sincerely want to thank you, as well, for your 
support over these past several years, while the department has 
implemented previous base closure decisions and while we have 
struggled with severe funding constraints that have been the 
primary cause for the current state of our facilities.
    With your permission, Mr. Chairman, I have prepared a 
statement that I would like to submit for the record, and I 
will use the time available to me to focus on the key points of 
this year's military construction and family housing budget 
request.
    Mr. Hobson. Yes, we hope everybody will be pretty brief in 
that, because we got a whole bunch of people.
    Mr. Zakheim. Briefly, then, our 2002 budget prepares for 
the future while addressing current needs through robust 
funding to improve morale, boost readiness and transform 
defense capabilities and upgrade aging facilities. In terms of 
this committee's specific concerns, our request for the 
military construction and family housing programs for 2002 
totals $10 billion, including funding for over 450 construction 
projects at more than 220 locations worldwide.
    The budget request represents a 14 percent increase over 
the amount requested last fiscal year, 2001, and is $936 
million over last year's enacted level. This increase 
incorporates our initiative to streamline and upgrade the 
department's infrastructure and to restore degraded facilities 
to a mission-capable status. The budget reduces the 
department's average facilities replacement rate from 192 years 
to about 100 years as we move closer to commercial standards.
    We have taken particular care to ensure that Guard and 
Reserve facility requirements were fully and fairly 
incorporated in this portion of the process. As a result, you 
can see that we have requested nearly $400 million--$393 
million to be exact--more for critical Guard and Reserve 
projects than was requested in past budgets.
    Our proposed budget improves the quality of military 
housing and accelerates the elimination of substandard housing, 
which we are seeking with the use of privatization. In general, 
we are changing the way we do business in our housing and 
utility systems where it is prudent to do so.
    We are also planning to shed our excess infrastructure, 
through a variety of methods, ranging from demolition of 
unneeded structures to installations closures. As part of this 
effort, we are designing an Efficient Facilities Initiative--it 
already has an acronym, EFI--to rationalize and restructure our 
bases, labs and other DOD facilities. While our original BRAC 
programs have been reduced--for those who do not know, BRAC was 
Base----
    Mr. Olver. We all know.
    Mr. Zakheim. Good. I was showing you that I did, too.
    Our BRAC programs been reduced to environmental and other 
caretaker efforts. We very much require your support for a new 
EFI base closure initiative in 2003. This effort makes good 
business sense and is necessary to free up funds for our 
highest priorities.
    As you directed in report language last year, our military 
construction budget also restores funds for contingencies, 
comprising 5 percent of project costs. As you know, such 
funding had been excluded in the past two years. We agree with 
you that these funds are vital, not only to help offset 
unforeseen project cost growth, but also to fund improvements 
identified during construction. This initiative is another 
example of the department's overall commitment to realistic 
budgeting.
    Our budget for family housing supports a $4.1 billion 
program to construct, improve, operate and maintain family 
housing units. It also seeks to privatize those units that are 
no longer critical to supporting a base's mission requirements. 
This program includes an additional $400 million in support of 
the president's goal to improve housing for military members 
and their families. The additional funding will be used to 
improve the quality of 14,675 more houses, while accelerating 
the elimination of substandard military housing.
    In closing, Mr. Chairman and Mr. Olver, I wish to thank you 
and the committee members for providing me with this 
opportunity to discuss our program. I want to reiterate that 
our request for military construction and family housing 
represents a balanced program. It is one that is essential to 
permit the services to support weapons systems being deployed, 
to accomplish new or changing missions and to provide enhanced 
quality of life for servicemembers and their families.
    Mr. Chairman, Congressman Olver, members of the committee, 
I am ready to provide any additional information you may 
request. Thank you.
    [The prepared statement of the Honorable Dov S. Zakheim 
follows:]
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                Statement of Mr. Raymond F. DuBois, Jr.

    Mr. DuBois. Mr. Chairman, Mr. Olver, members of the 
committee. I have submitted testimony for the record. I will 
just make a couple of quick opening remarks.
    As you know, Secretary Rumsfeld has under way a defense 
strategic review, which will also fold into the QDR. It places 
a high priority on not just making our installations adequate, 
but to improving them. And I think the importance of 
installations in general is reflected in the amended budget, 
which includes a substantial increase in resources for 
installations and facilities.
    There are four basic points that are recommended in our 
budget submission: A, that installations, must be adequately 
funded; B, they must be modernized; C, they must be restored; 
and finally, as Dr. Zakheim has referred to, installations must 
be streamlined and reconfigured.
    As we all know, there have been changes over the last 10 to 
20 years that have left a mismatch between our installations 
and our force structure. We have too much capacity at some 
locations and we have pockets of insufficient capacity at 
others. We propose to address this mismatch with an EFI, an 
Efficient Facilities Initiative, and are extending our 
successful facilities demolition program.
    I also want to mention that I noted with pleasure, Mr. 
Chairman, your article in the Sunday Washington Times issue 
that----
    Mr. Hobson. We tried to get The Washington Post to take it, 
but they would not do it.
    Mr. DuBois. Well, it probably will find its way there, too, 
eventually. But the issues that we faced and that we witnessed 
in Korea are addressed in here. and we hope that we can work 
with you to find solutions. I thank you very much, all the 
members of the committee and I look forward to taking your 
questions.
    [The prepared statement of Mr. Raymond F. DuBois, Jr. 
follows:]
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    Mr. Hobson. Okay. I guess, we will hear from the Army 
first, Mr. Johnson, your swan song here.

                    Statement of Mr. Paul W. Johnson

    Mr. Paul Johnson. Mr. Chairman and members of the 
committee, I am pleased to appear before you with Major General 
Van Antwerp, Brigadier General Squier of the National Guard and 
General Helmly of the Army Reserve to discuss the 2002 military 
construction budget. We have provided a detailed written 
statement for the record, but I want to comment briefly on the 
highlights of our program.
    I am pleased to report the Army's budget request for the 
active and reserve components provides a substantial increase 
in construction in family housing resources, essential to 
support our soldiers, families and civilians. The commitment of 
our leadership to improving installation and facilities is 
reflected in this $3.7 billion submission--about a billion 
dollar increase over 2001.
    We are making great progress on our permanent party 
barracks and our strategic mobility program. On family housing, 
we continue to mix privatization and construction.
    We have been through some tough growing pains on the 
housing privatization, but I believe we are now ready to 
institutionalize the process and move out on execution. Fort 
Carson has shown that this concept is a great deal for soldiers 
and their families.
    Army transformation will affect facilities on our 
installations and this is reflected in our budget with the 
project at Fort Lewis. For the reserve components, the focus is 
on maintenance of facilities, readiness centers and Reserve 
centers.
    On a personal note, this is my last appearance. I am going 
to retire August the 3rd.
    I am proud of the progress that we have made in Army 
facility programs and I attribute this directly to the 
longstanding support of this committee and your staff. If you 
are ever down in Peachtree City, Georgia, it is a planned 
community with a built-in lake and a golf course around it, a 
shopping center and conference center. And from every house you 
can get on your golf cart and go to them.
    Mr. Hobson. I may show up, one of these days, and we will 
bring the whole committee.
    Mr. Paul Johnson. I hope you will, because I can get you 
some tee time too.
    Mr. Hobson. Thank you.
    Mr. Paul Johnson. Thank you very much. As I leave, I know I 
will leave this in good hands and I know you will continue to 
support the soldiers and their families.
    [The prepared statement of Mr. Paul Johnson follows:]
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    Mr. Hobson. Thank you very much for all you have done, 
Paul. We appreciate working with you.
    Who is next? Duncan? What do we go by, age of the service, 
is that what we do?

                      Statement of Duncan Holaday

    Mr. Holaday. Sir, I am glad that you said age of the 
service, rather than age of the witness. [Laughter.]
    Good day, Mr. Chairman, Mr. Olver and members of the 
committee. I appreciate the opportunity to discuss the 
Department of the Navy's shore infrastructure budget with you.
    Accompanying me today are Rear Admiral Mike Johnson, 
representing the Navy; Rear Admiral Noel Preston, representing 
the Naval Reserves; and Brigadier General-Select Mike Lehnert, 
representing the Marine Corps.
    The department has to maintain a balance between current 
readiness, recapitalization, research and development to meet 
future defense needs. Infrastructure programs have, in general, 
not fared well in these balancing efforts. With the exception 
of our recent focus on fixing our inadequate family housing, 
our installations and facilities have continued to deteriorate 
due to age and neglect. So it is particularly encouraging to 
see this administration's focus on sustaining and modernizing 
our infrastructure.
    In his confirmation statement to the Senate ArmedServices 
Committee, Secretary England said, ``I will emphasize quality of 
service, achieving a higher quality of workplace as well as a higher 
quality of life for our sailors, Marines and their families.''
    The fiscal year 2002 amended budget submission includes 
significant funds above the previous baseline to help achieve 
these goals. Our fiscal year 2002 appropriation request of $1.1 
billion for military construction is the largest submission in 
well over a decade. It includes 50 projects totaling $692 
million for the Navy, and 33 projects for $339 million for the 
Marine Corps.
    Most of the projects are for operational maintenance and 
training facilities, barracks and environmental projects. The 
biggest challenge we face is improving the living conditions 
for our single sailors and Marines. The Department of Defense 
goal is to eliminate central heads and permanent party barracks 
by fiscal year 2008. While the Marine Corps will exceed that 
goal by eliminating central head barracks by 2005, they will 
not be able to achieve the two-plus-zero construction standard 
for another 30 years. The Navy, while meeting the DOD goal for 
eliminating central heads, will not achieve the one-plus-one 
standard for another decade.
    Additionally, the Navy needs to provide facilities for 
sailors who now live aboard ship while in home port. The Navy 
is committed to the Homeport Ashore Program to provide living 
quarters ashore for these sailors. While a final plan is still 
in the works, the Navy has already used changes in assignment 
policy in Hawaii and Guam to bring shipboard sailors ashore. 
This budget includes $105 million to build 516 barracks spaces 
at San Diego, 260 spaces at Mayport and over 1,000 spaces at 
Pearl Harbor to speed up the Homeport Ashore Program.
    We are also continuing to explore the feasibility of 
applying PPV authorities to our barracks needs. I have 
challenged the Navy and the Marine Corps to develop bachelor 
housing privatization projects that we can bring forward to 
Congress.
    Our fiscal year 2002 family housing request is $1.2 
billion. Although slightly smaller than last year's enacted 
level, it retains a focus on replacement construction, 
improvements and also includes funds to continue public-private 
ventures.
    For the last several years, we have remained on course to 
achieve DOD's goal of eliminating by 2010 the inadequate 
military family housing that we own. I am pleased to report 
that the new family housing master plans we will submit to the 
Congress shortly will show that we will meet that goal sooner 
than expected. The Navy will eliminate its inadequate homes by 
2009 and the Marine Corps by 2008. I am hopeful we can do even 
better than that.
    With regard to the earlier four rounds of base closure, we 
have completed 178 closures and realignments. Our main focus 
now is on finishing the environmental cleanup and property 
disposal. We have already transferred over 65,000 acres through 
economic development conveyances, negotiated sales, public 
sales and public benefit transfers. Of the 96,000 acres 
remaining to be transferred, over 74,000 acres are associated 
with the former naval air station at Adak, Alaska.
    By the end of this year, we expect to have completed 
cleanup of 79 percent of our BRAC sites. Unfortunately because 
of competing budget requirements, our BRAC request declines 
from $443 million in 2001 to $131 million in 2002. This level 
of funding is insufficient to meet our requirements and 
precludes our ability to take advantage of any promising early 
transfer opportunities that would benefit the Navy and local 
redevelopment authorities. We are working with OSD to resolve 
this issue and will keep the Congress, regulators and affected 
communities apprised.
    In conclusion, I believe the DON infrastructure program is 
in a strong position as we begin the new millennium. I 
appreciate the support that this committee and its staff have 
given us in the past. I look forward to working to your 
continued support for our Navy and Marine Corps programs.
    Thank you very much.
    [The prepared statement of Duncan Holaday follows:]
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                   Statement of Mr. Jimmy G. Dishner

    Mr. Dishner. Mr. Chairman, Mr. Olver and members of the 
committee, good afternoon. I appreciate the opportunity to 
appear before you and present the Department of the Air Force 
fiscal year 2002 military construction program.
    I am here with Major General, Earnie Robbins, the Air Force 
Civil Engineer; Major General Paul Weaver, the Air National 
Guard; and Brigadier General Bob Duignan, the Air Force Reserve 
deputy.
    Our total force MILCON and military family housing programs 
play a vital role supporting Air Force operational needs, 
workplace productivity and quality of life. Two of these 
issues--improving the workplace environment and providing 
better housing--rely on the success of our MILCON and military 
family housing programs. For several years, reduced funding for 
our facilities has led to a steady deterioration in Air Force 
infrastructure. The good news is that our fiscal year 2002 
total force MILCON budget request is double what it was last 
year and stands at over $1.3 billion.
    With this fiscal year 2002 budget and the investment levels 
projected through the future years defense program, we will 
reduce our recapitalization rate from its present 250-year-plus 
to about 165-year recapitalization rate in fiscal year 2002; 
still far below our desired rate of capitalization--and that is 
57 to 67 years--but this is clearly a step in the right 
direction.
    We must continue to balance funding among the priorities of 
people, readiness, modernization and infrastructure. Increases 
in the overall defense budget this year will help meet the most 
pressing Air Force needs. Although we continue to operate and 
support the world's premier aerospace force, we cannot correct 
overnight the negative impact reduced funding has had on our 
infrastructure.
    For fiscal year 2002, we our requesting a program of $2.7 
billion for our total force MILCON, military family housing and 
BRAC. This request is comprised of $1.1 billion for additional 
active MILCON, $1.4 billion for military family housing, $149.1 
million for Air National Guard traditional MILCON, and $53.7 
million for Air Force Reserve traditional MILCON.
    These Air Force programs were developed using a facility 
investment strategy with the following objectives: 
accommodating the missions; invest in quality of life 
improvements; continue environmental leadership; sustain, 
restore and modernize our infrastructure; optimize use of 
public and private resources; and continue our demolition 
programs.
    Mr. Chairman, the Air Force clearly could not maintain the 
quality of our facilities or the advantages they provide 
without the strong support we have always received from this 
committee, and for that we are most grateful. Mr. Chairman, I 
also would like to thank the committee for your support of the 
Air Force and DOD BRAC programs. Your help on legislation and 
funding has been instrumental in allowing communities, such as 
the former Lowry Air Force Base, Colorado, to expedite their 
redevelopment efforts. This is a win-win for the local 
communities and for the Department of Defense.
    The Air Force completed its final closure and realignment 
actions by July 13, 2001, to include closure to McClellan Air 
Force Base in Sacramento and, realignment of Kelly Air Force 
Base to Lackland Air Force Base in San Antonio, Texas. As 
required by the statute, it is requesting the funding required 
to fulfill its environmental cleanup responsibility, protect 
and care for the properties until their eventual transfer to 
other owners. The Air Force remains committed to timely 
environmental restoration that is protective of human health at 
our closure bases and is asking for the funds necessary to 
continue that process to a successful conclusion.
    Mr. Chairman, I would like to make one final comment on 
base closure. We cannot overemphasize how the reductions in Air 
Force manpower and force structure have out-paced those in 
infrastructure. We have reduced force structure by 36 percent 
but, even with four rounds of BRAC, infrastructure continues to 
exceed our requirements.
    Only additional efficient facilities initiatives can 
correct this imbalance. We cannot afford to continue spending 
our scarce resources on unneeded infrastructure.
    In conclusion, Mr. Chairman, I thank the committee for its 
strong support of Air Force issues. With your help, we will 
continue to meet the most urgent needs of commanders in the 
field, while providing quality facilities for the men and women 
who serve in and are the backbone of the most respected 
aerospace force in the world.
    And may I add also your comments to Mr. Paul Johnson, a 
great compatriot, a great American, and it has been a pleasure 
of myself representing the United States Air Force and 
Secretary Roche to wish him Godspeed.
    Thank you, Mr. Chairman.
    [The prepared statement of Mr. Jimmy G. Dishner follows:]
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    Mr. Hobson. Thank you.
    I want to do two things. First of all, let me tell you 
about cooperation. I think General Robbins and the reserve 
forces pulled off great cooperation in solving the general's 
house at Osan. And it shows you the immense need for 
cooperation between the active duty and the Reserve and the 
Guard.
    It was not a big deal, but some day you will have to have 
General Robbins tell you the full story about that house, from 
his first meeting with me, and then how the problem was 
resolved after a visit of ours there using a Reserve officer to 
do some work that probably would have taken months to get done 
had we not done it the way we did it.
    But it is just a little view, and it shows you where 
cooperation is needed. I want to emphasize, while I am talking 
about this, that I am a very strong proponent of the reserve 
forces in all the services.
    The other thing I want to do is ask a question. You do not 
have to answer this now. I do not normally do a question first, 
but I want to just talk about one item, then I will turn to 
John.
    Southern Command headquarters was located in Panama until 
1997 when it was relocated to rental--and I want to use the 
word rental--office space in Miami, as the United States 
military was in the process of leaving Panama. But last year we 
became aware that the Office of Secretary of Defense, William 
Cohen, proposed direction of the Army, as far as the fiscal 
year 2002 budget, to reduce critical military construction 
projects, such as barracks renovation and family housing 
construction by $40 million and direct those funds to the 
purchase of the SOUTHCOM headquarters building and surrounding 
land. A similar proposal was contained in the Army's fiscal 
year 1990 budget submission and was summarily rejected by 
Congress.
    On December 7 of 2000, the chairman and ranking minority 
member of the Senate Military Construction Appropriations 
Subcommittee and Mr. Olver and myself signed a letter to the 
secretary of defense expressing our grave concerns over this 
proposal. We now have the fiscal year 2002 budget before us and 
I see that it does not propose any funds for a SOUTHCOM 
headquarters buyout.
    But let me tell you my concern. My concern is that there is 
an ongoing scenario of leasing activity relative to that 
facility and other property. I want to express my concern about 
this, because I have also spoken to other members of the 
Defense Committee and they share my concerns about this 
continuing activity. I plan also to talk to the authorizers 
about the various activities that are going on there.
    So with that, John, you can ask any questions that you 
might like to ask.
    Mr. Olver. Well, thank you, again, Mr. Chairman.
    At the first round, I would like to clarify something about 
the capitalization rate. Mr. Secretary, you have mentioned that 
this budget would achieve a capitalization rate of 100 years 
versus the present 192 years. I think I understand from 
previous conversation that that means, if we were to do this 
and do this steadily year after year, and that probably means 
that we would have an inflationary cost-of-living increase from 
year to year or we would begin to fall backward again, that we 
would be able to get--100 years from now, we would say that we 
have managed to recapitalize in 100 years. And I think you and 
Secretary DuBois have both said that the goal in OSD is a 67-
year capitalization rate.
    Could you tell me what the conventional market 
capitalization rate is on this sort of facilities? What are we 
comparing it with? It is hard to know what these numbers mean, 
in terms of the conventional market.
    Mr. Zakheim. Of course, Congressman. Basically it appears--
and we are still, frankly, doing more research on this. But 
from all indications, in the commercial world when you have a 
series of facilities, you normally spend enough money so that 
you would replace all of them over a period of something less 
than 60 years, and that is where the number 57 comes up. In the 
case of the department, the number 67 represents the fact that 
you have a number of historic facilities that you are clearly 
not going to get rid of, so that drives the average up 
somewhat.
    Now what is meant by all this is simply the following. We 
have had, over the years, a compounding of errors, if you will. 
On the one hand, we have not improved the facilities we have, 
and that is really called a sustainment rate, just to improve 
what you. And so, if you do not improve what you have you 
develop a backlog in repair. And on the other hand, we just 
have not been replacing facilities in any kind of time we 
fashion, because there has not been enough money each year to 
do so.
    So that if we were, indeed, as you put it, to spend $2 
billion a year plus inflation, we would then replace our 
facilities over a period of something like 100 years. Now that 
seems to be a terribly long time. On the other hand, if you 
look at some of the landmark buildings in any major city in the 
country, those are not being torn down and built up every 20 or 
30 years; they last quite a long time. A hundred years, though, 
is a little bit on the long side and we believe 67 is just 
about right.
    So that what you want to do is spend enough money each year 
so that eventually, if we were to get the levels up, we could 
replace any given building within 67 years of the time it was 
built. But at the same time, we have to make sure that those 
that are not being replaced in any given year are being 
sustained and maintained. And as I say, we have fallen short on 
both accounts.
    Mr. Olver. Do I understand then that your answer to what is 
a conventional capitalization rate is maybe 57 years----
    Mr. Zakheim. Correct, sir.
    Mr. Olver [continuing]. And that the difference between 57 
and 67 is, at least in part, if not in whole, the idea of 
having a fair number of historic facilities that maybe are a 
glut onthe market almost?
    Mr. Zakheim. Well, it is not so much that they are a glut, 
I do not see us tearing down the historic buildings of West 
Point or of Annapolis, for example.
    Mr. Olver. Really.
    Well, now, what then impact does the EFI have upon your 
difference of your--I do not know whether this is to be a 
sustained effort at trying to reach 100 years. But this is, of 
course, the first year before you know whether EFI is being 
done at all. Does your 100-year recapitalization include what 
you expect to be the effects of an effective EFI?
    Mr. Zakheim. No, it does not. And you are absolutely on 
target there, Congressman, because were we indeed to reduce our 
facilities--and you know the joint staff has estimated we have 
about a 23 percent overhang. So let's say we were to reduce our 
facilities by 20 to 25 percent, then just by virtue of that 
your recapitalization rate drops to in the region of 75 to 80 
years. Just by virtue of that. It is a direct function of the 
number of facilities you have.
    On the other hand, to wait until we could develop and get 
Congress to approve an Efficient Facilities Initiative, while 
these buildings are aging and need to be torn down, would also 
be probably not the wisest approach.
    So what we are doing is beginning this process of a 
commitment to recapitalization and, as all of us on the panel 
have indicated, coming to the Congress with a facilities 
initiative that will, in fact, reduce the average 
recapitalization rate.
    Mr. Olver. If the EFI is adopted at your level of 25 
percent of closure and restructuring----
    Mr. Zakheim. Twenty to 25.
    Mr. Olver [continuing]. Twenty to 25, and you say that 
brings us into the 75 to 80 year level, what does then get you 
to your goal of 67?
    Mr. Zakheim. We would have to spend more on an annual 
basis. In other words, we would have to commit more money, 
again, at six levels, in real dollar terms, annually in order 
to tear down more buildings and replace them to get to the 67-
year level.
    Mr. Olver. We need to appropriate this, we need to see what 
the EFI is actually going to be, and then over time if we are 
to actually bring this down to the 67--how exactly that relates 
to a conventional market recapitalization arrangement. We have 
the uncertainty of that. All these are uncertainties, as I am 
laying them out, as to how much more money would then be 
necessary, but this is your work in progress clearly.
    Mr. Zakheim. There is certainly uncertainty as to how much 
more would be required, but I think it is safe to say that 
under any scenario you drew, we would still need the $2 billion 
that we are putting in today and we need to maintain that. Yes, 
sir.
    Mr. Olver. The least of it is in the facilities that we are 
going to have when we get finish with all of the process.
    Mr. Zakheim. Absolutely.
    Mr. Olver. Thanks.
    Mr. DuBois. Mr. Olver, if I just could add to that. The 
amended 2002 budget decreases, as we have heard, the 
recapitalization rate from 192 to 101, but that is with the 
current footprint. Therefore, by any measure were we to reduce 
the current footprint, it would not take the same amount of 
money in the out-years to fully fund sustainment and 
modernization, and that is an important factor.
    Thank you.
    Mr. Olver. Thank you, Mr. Chairman.
    Mr. Hobson. Ms. Granger was next, but she stepped out of 
the room, so we will go to Mr. Edwards.
    Mr. Edwards. Thank you, Mr. Chairman.
    Thank you all for your testimony.
    And Secretary Johnson, it is an honor to have worked for 
someone who has served this country longer than John Dingell 
has been in the Congress. [Laughter.]
    As someone who represents Fort Hood and over 40,000 Army 
soldiers and is co-chairman of the Army caucus, let me thank 
you for all your great work and what you have done.
    I want to commend the administration for asking for 
increased investment for military construction, quality-of-life 
programs.
    And Secretary DuBois, thank you for your personal 
attention. I have never seen a secretary spend as much time on 
trips with MILCON Committee as you have and I think that is a 
real compliment to you and the administration.
    I want to be sure I understand the actual numbers and, 
Secretary DuBois, if I could turn to page five of your 
testimony, I will refer to those numbers and start at the 
bottom. Let me just be sure I understand the simple math, if I 
could.
    The fiscal year 2002 appropriation request compared to the 
fiscal year 2001 final appropriation is plus $952.4 million. Is 
that approximately correct?
    Mr. DuBois. Yes.
    Mr. Edwards. Do you know how much was spent in emergency 
appropriations in fiscal year 2001 that went to these accounts? 
So if we were to take the $9.0169 billion spending and added 
emergency or contingency spending that was off-budget, do you 
know what that total would have been?
    Mr. DuBois. No, Mr. Edwards, but, Dov, do you have that?
    Mr. Zakheim. I do not have that.
    Well, get it to you for the record, sir.
    Mr. Edwards. Let me put that aside, we might revisit that 
later, hopefully today, if we could. I would like to re-
evaluate the numbers, in light of that.
    Let me walk through just a very rough cut, using a pen 
here, looking at some numbers on what we are really talking 
about after inflation. And please tell me if my analysis is off 
at some point. But let's just say approximately 10 percent 
increase in the budget is what the request is compared. If 
there were extra contingency funds last year from MILCON that 
would make it less than 10 percent. Let's just start out with 
the basic 10 percent then we will adjust it downward based on 
contingencies from last year.
    Let me make a rough calculation of 3 percent inflation, 
that would make this a 7 percent real increase. Let me take the 
5 percent you have contingencies, assume for a minute that 
maybe offsets last year's contingencies----
    Mr. Hobson. There were not any last year.
    Mr. Edwards. No emergency spending----
    Mr. Zakheim. There was no contingency account. I think that 
is what the chairman means.
    Mr. Edwards. That is right. That is exactly my point.
    Ten percent increase minus 3 percent inflation gives you 7 
percent real increase. If 5 percent of the budget is for 
contingencies. Then basically you take that out of the 
7percent, you get the 2 percent. You take the 0.76 percent that is 
represented by the assumption of Davis-Bacon reform, which the chairman 
has said is not going to happen, that would get to you a real increase 
in MILCON and family housing of 1.24 percent.
    I mean, frankly, you deserve credit for that and I applaud 
you for that, as a Democrat who felt the previous 
administration did not request nearly enough for MILCON. But 
tell me if that simple math is correct, and then if it is not 
we can go from there. But if the simple math is correct, the 
verbal commitment to increasing quality of housing does not 
really match the numbers; 1.24 percent alone does not provide 
dramatic increase in quality housing.
    And I commend you for the effort on privatization and other 
ways to save money. And every dollar we can save and spend more 
efficiently, I will compliment this administration and the 
committee working together to do that.
    But just for the actual numbers, is my rough analysis about 
right, about 1.24 percent real increase in MILCON spending?
    Mr. Zakheim. Probably slightly higher in that the 5 percent 
refers not to every aspect of the budget. But I do not think I 
want to quibble with you over the numbers. I think the real 
issue is two-fold, and then Mr. DuBois or my other colleagues 
might want to speak to this as well.
    In the first place, this budget reflects honest budgeting. 
That is what the 5 percent contingency is all about. And as you 
know, we thank the Congress for passing the supplemental this 
past week, and for the first time in ages there was no 
emergency funding. This is a very straightforward approach that 
we are now taking.
    On Davis-Bacon, I am not yet ready to concede defeat. It 
seems to me that the case has yet to be argued out. Some of 
your colleagues have, in fact, pointed out and acknowledged 
that maybe a dialogue with the unions is important before we 
immediately assume that an act that was enacted in--1935 was 
the last time it was revised, so you know it seems a little 
dated--and $2,000 might be a little dated. There seems to be, 
to me at least, some room for discussion here as to whether we 
should, in fact, enact something that brings us into the 21st 
century instead of keeping us stuck four-square in the New 
Deal.
    And finally, I think one should not minimize the fact that 
even after your entire calculation we have real growth. And 
that is a sign of a commitment. And when you look across our 
budget--and I am speaking across the budget now, as opposed to 
simply the MILCON side--I think you will see some commonalities 
or patterns that are really important. One I have already 
alluded to: realistic budgeting. The second one is this attempt 
to turn the corner, whether it is on maintenance or military 
construction or other areas so that the incessant declines--
this downward slope--finally gets flattened out or even turned 
around.
    And so, is 1 percent sufficient? Have we met all our 
objectives? I do not think anyone around this table would say 
we have. But it is certainly pointing in the right direction.
    Ray, would you like to add to that?
    Mr. DuBois. I think it is important also, Mr. Edwards, to 
understand that $5.2 billion is what DOD spends annually in 
housing allowances for families residing in the private sector, 
and about $3.6 billion annually to build and maintain 
government-owned housing for the remainder. And it is our hope, 
working with this committee and with some of the very fine 
ideas that the chairman has sent to us, to maximize those 
MILCON dollars--leverage them in terms of housing privatization 
projects. And that it is not necessarily the sole measure of 
goodness, the absolute dollar increase, but rather how are we 
using them to increase or to decrease, as the case may be, the 
inadequate housing from a total aggregate level in DOD of about 
60 percent today. I think those issues have to be remembered.
    Mr. Edwards. And I look forward to working with you. But I 
just wanted to be sure we were reading off the same page on the 
actual math.
    And just quickly, the supplemental that we just passed, Mr. 
Chairman, it had MILCON money in it. Do we know how much? And 
that was non-emergency.
    Mr. Hobson. It was not as much as we wanted, but I think we 
wound up with about $22 million for Korea, $9-something million 
for some submarine facilities in Guam.
    Mr. Edwards. It is about $40 million.
    Mr. Hobson. Well, the $10 million was already in the bill. 
The total was $92 million, I think, by the time we got done.
    I might add to that, since you asked me that, in the 
previous administration I put close to $1 billion in overseas 
MILCON and got my head beat in, as you may recall, on the floor 
here, and then again in conference committee. But we did wind 
up with about $400, $500 million, which rounded out to about 
$100 and some-odd million for overseas MILCON, which was not 
emergency. It was additional.
    Mr. Edwards. Is that fiscal year 2001----
    Mr. Hobson. That was additional spending.
    Mr. Edwards [continuing]. Or was that 2000, Mr. Chairman? I 
can't remember.
    Mr. Hobson. 1999.
    Mr. Edwards. I would like to get these questions answered 
for my next round, because my point would be, if we added money 
in the recent supplemental for MILCON, which we did, and if 
there was any contingency spending, then I think to really 
compare whether there is a 1.24 percent real increase or not 
this year we need to add those numbers back to the--on page 
five of Mr. DuBois' testimony, it says $9.0169 billion. My 
question would be, does that include the supplemental we just 
passed? Does that include any contingency spending?
    If the answer is no, could someone please help me during 
this hearing to figure out what that $9.0169 billion would be 
if you adjusted upwards for those real dollars that were spent 
for fiscal year 2001. And I will wait until the second round, 
Mr. Chairman, and maybe we can have an answer.
    Thank you very much.
    Mr. Goode. Thank you, Mr. Chairman.
    Dr. Zakheim, you indicate under the Guard and Reserve 
facilities that there are 69 major construction projects that 
you are planning and have design work on. Are any of them Guard 
facilities in Virginia?
    Mr. DuBois. It would probably be 90 percent correct to say 
yes.
    Mr. Zakheim. We will get you an answer for the record, 
sir--100 percent answer.
    Mr. Goode. Because one person shook his head, and I just--
--
    Mr. Zakheim. We will get you the 100 percent answer,sir.
    Mr. Goode. Then I can respond to Major General Claude 
Williams, the adjutant.
    Mr. DuBois. Do the other witnesses have an answer for Mr. 
Goode?
    I believe the Navy has a Reserve center in Virginia.
    Mr. Holaday. Yes, sir, the Navy has got a headquarters for 
the Naval Reserves in Williamsburg.
    Mr. Goode. Army National Guard, Air National Guard does not 
have anything, correct?
    Mr. Paul Johnson. The Army does not.
    Mr. Goode. I am through, Mr. Chairman.
    Mr. Hobson. Mr. Farr?
    Mr. Farr. Thank you very much, Mr. Chairman.
    I want to thank all of you for being here, but I also want 
to publicly thank our chairman and ranking member. I have been 
on the committee for almost three years now, and I think that 
the energy that comes out of the leadership on this committee 
is what has made this budget the success that it has been, and 
as we go to the facilities, we see we are not really doing 
enough for the men and women in uniform. And frankly, I think 
we need to relook at the way we do military housing, so that we 
can also add to the retention and recruitment of people.
    So I think this is key. In fact, Mr. Chairman, I was 
looking at our last Appropriations Committee report, and we 
spend more money on this committee than we do in Foreign 
Operations. So it is a really important committee.
    I flew back all night so that I could be here to see P.J. 
in his last appearance. I have been in Congress for eight 
years, and I have been on the telephone with P.J. every day for 
eight years. [Laughter.]
    P.J., while everybody else is complimenting you on your 52 
years of service, and I share that, I am glad you are leaving. 
[Laughter.]
    I did not realize until I came here today that my eight 
years with you have been preceded by 45 years of service. 
Fifty-two years of federal service is remarkable. I am the one 
that really advocates careers in public service, and I would 
like to commend you for that.
    And I hope that you have a great retirement life and that 
things can be easier around this department for me. [Laughter.]
    While I am also complimenting staff, I see Randall Yim in 
the audience, and I would like to complement him for coming to 
federal service, because he has been really refreshing in 
helping us with a lot of our base closure and realignment.
    Mr. Chairman, you know, we talk about how all politics is 
local. I was told by Colonel Rice, Commandant at Defense 
Language Institute, who recently got a call from Washington 
wondering why was he out there, because they thought that in 
closing Fort Ord, a training facility, that the military had 
pulled out of the Monterey Peninsula.
    Well, I am here to say that I represent the Defense 
Language Institute at Fort Ord which is a Presidio annex, Fort 
Hunter Liggett, Naval Postgraduate School, Fleet Numerical 
Naval Research Lab, the Defense Financial Accounting Service, 
DMDC, the Defense Manpower Center, the Air Force tracking 
center and the veterans' medical clinic. The military is alive 
on the Monterey Peninsula.
    So my questions are going to get very specific.
    Mr. Hobson. He showed most of them to me. [Laughter.]
    Mr. Farr. I have not seen them all, Mr. Chairman. I am 
inviting you all back.
    P.J., before you leave, I have to ask you some questions 
because a lot of these things you and I have been dealing with, 
I would like to get some specifics on them.
    As you know, when Fort Ord was closed, you downsized it too 
small, and you still have, with all of these other military 
installations, a need for housing. And since the land was given 
away to the city of Marina, we had a private nonprofit low-
income group to come in and renovate the former military 
housing, so that the 192 families could move back onto former 
Fort Ord, and their civilian housing could be made available 
and affordable to the community at large.
    It was an interesting partnership. It was done in Abrams 
Part B, and now you are dealing with the RCI initiative for the 
Fort Ord military community. But we still do not have enough 
housing for the Naval Postgraduate School, DLI, Fleet Numerical 
and the other military installations. So my question to you 
specifically is, will the Army consider another partnership 
similar to Abrams Part B if approached by either the city of 
Seaside or the city of Marina?
    Mr. Paul Johnson. Absolutely, if we still own the property, 
we would be glad to partner.
    Mr. Farr. You do not own it, and you did not own it. This 
was a partnership done on property you did not own. You gave it 
away.
    Mr. Paul Johnson. That was a very complicated realignment 
and closure at Ford Ord, and our giving it away was 
transferring most of it to the university out there.
    Mr. Farr. No, no, no, that is just 1,100 acres of the 2,800 
acres.
    Well, you did recently do this partnership. And my question 
is--and maybe the staff can get me some specifics on it--that 
we would like to do it again if approached by the local 
communities to provide more housing in those communities for 
the military in the housing that you formerly owned.
    Mr. Paul Johnson. If the housing is there, we would like to 
use it. We will make a way to use it.
    Mr. Farr. And the second question I have----
    Mr. Paul Johnson. Wait a minute. If it is sitting there, 
that housing has been sitting there for--what?--seven years.
    Mr. Farr. I have a picture I will show in a minute. But Mr. 
Chairman, what happens is once you have given the land away, 
you have given it away. And now we have to get the housing 
back, and it is most cost-effective to do that. So you have to 
develop--essentially this is a mixed community of 192 units, 
but priority is given to military families who would like to 
move back into that housing. And you cannot do that unless the 
occupiers, in this case the military, will partner.
    That was private money that was put up, not federal money. 
But the authorization has to be there for thesoldiers to rent 
those houses and so on. I want to do more of it, and that is my point. 
I want you to get enthusiastic about doing that.
    Last year in front of this committee, then-Assistant 
Secretary Sandy Apgar testified--this is regarding Fort Hunter 
Liggett in south Monterey County, which was partially BRACed--
testified that there would be no change in the surplus property 
decisions at Fort Hunter Liggett. And those decisions were, to 
quote Mr. Apgar from the hearing, ``The Army is not considering 
any changes in the conveyance of Fort Hunter Liggett.'' This 
was on March 15 of last year.
    Yet on July 13, just 10 days ago, the Army took back all of 
the housing at Fort Hunter Liggett, reclaimed it as its own, 
instead of releasing that property for conveyance to the 
National Park Service, which you had planned to do. And I want 
to know why did the Army renege on that commitment?
    Mr. Paul Johnson. We still have a requirement for the 
housing. As a matter of fact, the Park Service has never really 
indicated that they would operate and maintain it. Our idea was 
that they would take it over and maintain it, and individual 
soldiers would rent it back. They have never stepped up to the 
plate and said that they were going to do that.
    So what we did, we were redrawing the line out there to 
house the soldiers. There are about 50 or so active duty-type 
there we need to house and also some other people in the area 
that we need to house.
    Mr. Farr. Well, there are not any active. You turned it 
over to the Army Reserve.
    Mr. Paul Johnson. I know, but there are still some active 
Reserves on active duty there that need to be housed, and that 
is the reason we drew it back.
    Mr. Farr. Well, how can you renege now on a BRAC decision?
    Mr. Paul Johnson. It is similar to the one you are talking 
about down at Abrams. What we have to do is get some 
legislation----
    Mr. Farr. No, it is just the opposite of that. That one you 
are leasing back from the people you gave it to.
    Mr. Paul Johnson. I do not understand. We have not given 
the housing to the Fish and Wildlife Service there. We were 
planning to, but they have not come up to the table and said 
they would take it.
    Mr. Farr. Well, I totally disagree with that and I will 
show you the agreements that were let. I just am really 
surprised that you are doing this now. The agreement was all 
worked out.
    Let me ask another question on this. I understand the Army 
is taking back not only the Fort Hunter Liggett housing, but 
you are going to privatize it. And I understand further the 
privatization of this housing will be combined with 
privatization of other efforts at Moffett Air Force Base and 
possibly at Fort Ord.
    Is this true? Does this mean that all three bases will be 
awarded to one contractor?
    Mr. Paul Johnson. Possibly. But under the RCI program we 
want to put all that together because it will make a bit more 
sense to do that.
    Mr. Farr. What do you mean ``possibly''? Because this 
Congress allows preference to local contractors on this. So if 
you are going to take Moffett Air Force Base, which is not even 
near the Monterey Peninsula, the distance between Fort Ord and 
Fort Hunter Liggett is greater than the distance between here 
and Baltimore. You are just putting it all in one big, huge 
circle out in the West.
    Mr. Paul Johnson. Well, that is under study. We have not 
done it yet, but it is under study to do that. If it makes 
sense, we will; if it does not, we will not.
    Mr. Farr. Well, I do not think it makes sense, particularly 
with the preference that you are supposed to be giving to local 
contractors, so I would like to engage with whomever is going 
to follow up on that.
    Mr. Chairman, I know my time has expired. I have dozens of 
more questions.
    Mr. Hobson. We will get another round.
    Mr. Farr. Thank you.
    Mr. Hobson. Let me take a little time to make a couple 
comments.
    First of all, I want to point out that one of the things in 
this, what is it called, the Efficient whatever it is.
    Mr. Zakheim. Facilities Initiative.
    Mr. Hobson. One of the things you might look at is this 
win-win situation at Brooks. I am hoping that that turns out to 
be a way that other services could look at handling some of 
their facilities. It may not work everywhere, but I know that 
lots of people are making phone calls taking a look at it. This 
is something we happened to work out in a conference committee 
late one night and it seems to have been a way to handle it, at 
least initially, and I hope a long-term problem.
    The other thing I would like to talk about with Secretary 
DuBois is I hope you all plan to have a meeting with everybody 
to discuss SHPOs and what the law requires on SHPOs and what 
the law does not require on SHPOs and how one works with SHPOs.
    Mr. DuBois. Yes, Mr. Chairman, as we both found out in one 
of our CODELs, perhaps both or all three of them, a number of 
installation commanders are unaware as to what their 
obligations are and those of the local SHPO. In fact, as I 
understand it--and, Paul, you might want to address this--the 
Army is having an installation commander conference here in 
several weeks, and I am trying to work with each of the 
military services so that they understand exactly what went on 
there.
    Mr. Hobson. I want the story to be the same. What I am 
really concerned about is that each service has the same song 
and it is in the same book when they sing it. Because one of 
the problems we have found is that the interpretations go 
different in different services and in different locations 
within the services, and we need to hopefully bring that all 
together.
    Mr. DuBois. To torture the metaphor, it may be different 
churches, but it will be the same hymn.
    Mr. Hobson. Okay. Couple of other things on the Army. I 
understand the RCI project, but I cannot understand--and you do 
not have to answer this now, but I just want to send a message 
on it--I do not know why you guys will not do that small 
project at Fort Stewart involving those VA houses which the 
community wants, and I do not think that will mess up your RCI. 
Your RCI is so far down the road anyway that this can be done 
and over with and the community all happy with you. But every 
time I talk to the community and every time I have talked to 
somebody, they say, ``Well, we have an RCI project there,'' and 
I do not think that is any reason to hold it up. That is the 
first part for the Army.
    Second thing is, on Fort Lewis and Fort Meade, I was told 
by a four-star at one point that I would have had by--I do not 
know, I have forgotten the date--earlier in this year both of 
those. We do not have either one of them now, and I do not want 
anybody saying that this committee is the one holding those up. 
Because we do not have them; we cannot review them if do not 
have them. And I do not know where they are.
    Fort Meade should not be that difficult, it should have 
been the first one, in my opinion, it is such a great piece of 
real estate. If we cannot find somebody to go out and develop 
it, I will find somebody to develop it and I will quit here and 
go do it, because there is a big money maker for everybody and 
a win-win for everybody. So I hope we get those up here.
    The other thing, generally speaking, is that barracks ought 
to be able to be done on a privatization basis. Every 
university in this country practically has some sort of private 
deal going on barracks. And that is the way you have to look at 
for your stuff that you are talking about, Mr. Holaday, and 
other people. And barracks can even be done overseas.
    I am going to switch to a question on General Schwartz and 
what is going on in Korea, because I proposed to them that they 
copy a project that the Navy did in Italy, and that they try to 
do it there. We ought to try to do it some other places 
overseas. But the CINC in Korea has proposed a plan to 
consolidate installations and improve the living and working 
conditions in Korea, and it would basically get a new footprint 
for Korea.
    And I guess my questions are, one, when will this plan be 
reviewed for approval or disapproval? What are the overall 
conditions of the facilities? Does the current budget reflect 
the level of Army need in Korea?
    A little less than 75 percent is for barracks, which is a 
positive step forward. How many more barracks are needed? How 
many troops will be removed from Quonset huts as a result of 
the request?
    How about administrative buildings? How many are Quonset 
huts? How many are substandard?
    And finally, vehicle maintenance facilities, how many are 
substandard, C-3, C-4?
    Because I will tell you, if those things, many of them I 
saw, if they were in this country, the EPA, or in the private 
sector, there is no question that they would be shut down. And 
that is true in Europe also, but especially in Korea.
    I do not know if you want to answer that long a question or 
not for the record now, but it is something I hope we can get 
answered.
    Mr. DuBois. Well, Mr. Chairman, we will answer all the 
subsets of that question for the record. As you know, when we 
were both over there, General Schwartz does have a Land 
Partnership Plan and he is in the process of submitting a 
master plan to the secretary.
    Just recently, the flooding in Korea has been somewhat 
problematic and impacted some of our facilities negatively. As 
you may remember, we noticed there were some brand new 
facilities there that occurred as a result of the wisdom and 
insight of this subcommittee.
    But these are issues that I know that General Schwartz and 
I both testified to, at least in generalities, and we will get 
you more specifics later.
    Mr. Hobson. I am not going to give up on Korea, but I want 
to pick on one other service. I am concerned about Quantico and 
the distribution of the $400 million for family housing, 
because I think the facilities at Quantico--I cannot say 
anything nice about them.
    But there have been two senior members of the Defense 
Appropriations Subcommittee on the House side go and see that 
facility, and I have gotten direct orders, and I know that 
means if you get a direct order, and I do not want to get--I 
guess here I cannot get court martialed, but I can get removed 
from command I guess--I have people very upset about Quantico. 
And so does anybody want to talk on Quantico?
    Mr. DuBois. We will do this together, since we are going to 
solve this problem together.
    Mr. Holaday. I have been down to Quantico. I have seen the 
housing, sir. I know what you are talking about.
    Mr. Hobson. Would you concur?
    Mr. Holaday. Housing is not in very good condition. It does 
need to be replaced. We have a project in fiscal year 2003, $27 
million, if my memory serves me right, that would be the first 
step in it. The Marine Corps has a plan which will we will be 
discussing with your staff tomorrow to fully take care of all 
the housing at Quantico through a combination of military 
construction and privatization by fiscal year 2005.
    Mr. Hobson. Okay. I will be very frank with you: I thought 
Quantico was going to be in here earlier and it got removed. 
And I do not think that was the right thing to do. That is 
where you are training people and you are bringing people in 
there, and you expect them to live like that. I think it should 
not be members of Congress having to go down there and look at 
it to get it moved up on the list.
    Is the OSD directive that it is 80 percent private?
    Mr. DuBois. Of the $400 million? The objective was to 
allocate 80 percent of the $400 million to leverage housing 
privatization projects. And I think as a practical matter and a 
philosophic matter, we saw it as leverage, as an incentive, as 
a reward, if you will, to those services that had moved out 
smartly on privatization projects.
    Mr. Hobson. If anybody has moved out smartly, I might 
figure out where they are. All right. We will go on. I would 
not beat that one up any longer.
    Mr. Dicks. Mr. Chairman? I hope you do ask him----
    Mr. Hobson. You got here late. I just----
    Mr. Dicks [continuing]. You raised a question about Fort 
Lewis. I just hoped you ask him to answer about Fort Lewis--
where it is.
    Mr. Paul Johnson. It is due to the Congress in August of 
this year, and we plan to award the contract in October, 2001. 
It is here in the Pentagon.
    Mr. Dicks. It is in your office?
    Mr. DuBois. And it is about to come up to OSD within the 
next week, and it has been under intense scrutiny, both from 
the Army and from OSD.
    Mr. Dicks. Does that go to OMB after that, Mr. Chairman? Do 
you know?
    Mr. Hobson. OMB is looking at it with you, I think.
    Mr. DuBois. When it comes to me, if it has implications for 
scoring that are untoward, if you will, I will bring it up with 
OMB. But in this case, as opposed to the case where we had 
several in-depth discussions on Fort Hood, I think that this 
will move forward without a problem, once OSD and the Army come 
to an agreement with the contractor.
    Mr. Dicks. Thank you, Mr. Chairman.
    Mr. Hobson. Well, you are going to be up next.
    I just want to say one other thing. I also wanted to 
congratulate Randall for all the good hard work he did, and 
wish him well in his new venture. You can come back and look at 
all this stuff later on, and you can decide what was right and 
what was wrong, some of which you did. But I think everybody on 
this committee and this country owes you a debt of service for 
what you did while you were at OSD. You did a great job and you 
had great integrity with everybody that you worked with. So 
thank you.
    Norm, you are up.
    Mr. Dicks. Thank you, Mr. Chairman. I would have waited had 
I known.
    Mr. Hobson. You are in line.
    Mr. Dicks. Thank you.
    Let me ask you this: What does the new administration think 
about the projects that have been put forward by the Army at 
Fort Hood and Fort Lewis; specifically with these new housing 
project endeavors? What is the new administration's view on 
these?
    Mr. DuBois. As some of you know, when we came on board on 
the afternoon of January 20--in fact on Sunday afternoon, 
January 21, as one of the special assistants to Mr. Rumsfeld, 
of his five top issues, one was military housing. And he 
subsequently had, shortly thereafter, a discussion with the 
president, and as you know, in the President's address to the 
joint session in his Blueprint for Progress, he addressed it 
directly with dollars.
    The issue around Fort Hood, because it was the largest and 
remains the largest to date, that got a lot of attention at OSD 
level, not just because of its size, but because of the way it 
was constructed. It then led to a discussion between myself and 
Robin Cleveland, the PAD for national security in OMB, wherein 
we came to at least a conceptual agreement on how it ought to 
proceed to minimize scoring against the Army. The Army and I 
and OMB then had a discussion and we came to a conclusion that 
led to an announcement shortly thereafter.
    Mr. Hobson. Thank you. And Ray did really kick at it. I was 
there when most of that was happening.
    Mr. Dicks. Did CBO concur in the way it is scored? I never 
quite understand this, just to be honest, but CBO gets into it 
as it relates to this committee, and I just wondered if these 
things were in concurrence.
    Mr. DuBois. When I was in the private sector for the last 
24 years, I used to refer, and I do not think unkindly, but I 
referred to the scoring theologians in OMB. And I am unaware 
that OMB has a formal or informal dialogue with the 
Congressional Budget Office. But it is an interesting----
    Mr. Dicks. They do not. In other words, what this committee 
does, sometimes it scores on outlays or BA for that fiscal 
year, therefore affecting our 302(b) allocation. So they score 
it sometimes, and then OMB has another kind of a scoring option 
for the administration whether it affects the deficit. Is this 
a mandatory spending or discretionary spending? I just wondered 
if you knew about that. Although apparently, you have the other 
side of the equation under control.
    Do you think there will be any problem on scoring with Fort 
Lewis?
    Mr. DuBois. No. The issue with Fort Lewis was, quite 
frankly, some of the guarantees that were going to be involved 
between the contractor and the Department of the Army. And the 
issues that we wanted to see--mindful of the chairman's 
admonitions in the past about making certain that the United 
States military had as smart a lawyers on their side of the 
table as the private contractors did on theirs, and to 
ultimately negotiate a deal, any deal, that would be sustained 
and would not put the military in jeopardy at some point in the 
future, 10, 20, 30 years into that project.
    And one of the commitments that Secretary Rumsfeld has made 
to the chairman is to review those projects--large, medium or 
small--to ensure that, in point of fact, a military service was 
not left holding the proverbial bag.
    Mr. Dicks. And so far, so good.
    Mr. DuBois. So far, so good. As a matter of fact, it is----
    Mr. Dicks. They are passing you a lot of notes here. Do you 
want to read them? [Laughter.]
    That is usually what happens with me. I know I am in 
trouble. [Laughter.]
    Mr. DuBois. It is either you are in trouble or you are 
about to be in trouble.
    No, I think the issues--this administration--and Secretary 
Rumsfeld has testified to this--we want to accelerate this 
program. 2010 is an objective. We would like to accelerate it 
earlier than that.
    My note here, Mr. Dicks, was the fact that I should 
probably be less specific on contracts that are not inked yet. 
But I want to go on the record, it is very clear that Secretary 
Rumsfeld, working with the military departments now that we 
have three new service secretaries--in fact, I am reviewing 
right now the three military department master plans on housing 
to ensure that if we are not at the 2010 goal, what would it 
take to get there?
    Mr. Dicks. Let me ask one final thing, Mr. Chairman.
    In the statement of Mr. Zakheim, it talks about the 
Everett, Washington Navy project. How is that one going? It is 
185 new family housing units, then they have a follow-on at 
228, I think. Is that going well?
    Mr. Holaday. Yes, sir. They are going well. The 185 is 
fully occupied. It was one of the first two projects in the 
Department of Defense. And the second Everett project, the 
contract has been awarded and the housing is being built. It 
should be occupied soon.
    Mr. Dicks. The Navy is doing this at a smaller scale?
    Mr. Holaday. The scale depends on the size of the 
installation.
    Mr. Hobson. Now they got a big scale in San Diego.
    Mr. Holaday. Big scale in San Diego, where we have lots of 
people. Small scale in Everett, where we have no on-base 
housing. These are small projects that we are doing one at a 
time, because we have no on-base housing in Everett.
    Mr. Dicks. They are needed, though.
    Mr. Holaday. Yes, sir. Absolutely.
    Mr. Dicks. Thank you, Mr. Chairman.
    Mr. Hobson. Mr. Walsh.
    Mr. Walsh. Thank you, Mr. Chairman.
    I would like to ask Mr. Dishner a question. I would like to 
just ask, regarding the Air Guard, we have an Air NationalGuard 
facility in my home town of Syracuse. In the past, their infrastructure 
was in pretty sorry shape, and it has been duly noted by, I think, 
officers throughout the service. That has changed, I think, somewhat 
dramatically since Chairman Hobson has been chairman of the 
subcommittee, and I thank him for that. He has been very attentive. And 
we feel that we have some pretty brave men and women there who need the 
best equipment available and we are trying to give them those tools. 
And I am sure every unit in the country could say the same thing.
    I noticed in the president's budget request for the Air 
Guard, there is approximately $150 million request for MILCON, 
as opposed to an average of the past number of years of about 
$220 million. What is your assessment of that budget request 
and its ability to meet the needs of the Air National Guard?
    Mr. Dishner. Congressman, as I believe you are aware, we 
have a process where all the projects, whether it be Guard or 
Reserve, come in and they are racked and stacked by the Air 
Force at the headquarters to see how they--in priority sense--
and we allocated priority through a facility matrix that we 
have designed, with their input, by the way.
    We would certainly like the Guard and the Reserve to 
achieve their total improvements, whether it be in a MILCON, 
whether it be a new project to replace facilities, et cetera. 
There is no doubt in anybody's mind, the secretary's mind, I 
know that, and the chief of staff. That is just a process of 
our going through the racking and stacking process of projects 
and drawing a line. And when we get that kind of money, we go 
forward.
    I do note that from time to time, both in the Guard and 
Reserve, that they would have inserts by congressional members, 
which we do not get planning and design funds for. And I see 
now that that trend of those inserts are not as prevalent as 
they were six and a half years ago when I took this job. Then 
the system that we had to evaluate their projects, I do not 
think was as good. But under General Robbins and his staff, 
they have been able to come up with a working system now that 
they are properly evaluated.
    So I would not put that $200 million in one year and $100 
million, so therefore they are heading in the wrong direction, 
as much as I think in the racking and stacking of all our 
priorities within the Air Force, they are doing quite well.
    Mr. Walsh. Is it your sense, then that--I do not want to 
put words in your mouth, but the fact that we have averaged 
$220 million over the last 10 years for military construction, 
that since we are only asking for $150 million this year that 
we are pretty much knocking off all the backlog projects and 
things are in a lot better shape than they were 10 years ago?
    Mr. Dishner. Yes, sir. And if I may, may I also ask General 
Weaver to comment to see if he concurs with me?
    General Weaver.
    Major General Weaver. Mr. Walsh, Mr. Chairman, we are about 
at $1.8 billion backlog in MILCON and about $1.3 billion in 
RPM. Not to disagree with my friend, but we will accept any and 
all adds that we have enjoyed, that you have been able to do. 
What we have been able to do at Syracuse, what we are doing at 
Gabreski, because we still have facilities that we are still 
using two-prong plugs in. So we do have a large MILCON backlog.
    Within the president's budget, I think, we have certainly 
really gotten our fair share. We have been dealt with extremely 
fairly. But it does not take away the fact that we are still 
backing up; $150 million this year. If we are able to get $250 
million and $300 million a year, we in the Air National Guard 
feel that we could possibly, within 10 years, take care of that 
backlog.
    Mr. Walsh. Is the backlog today shorter than it was 10 
years ago or is it longer?
    Major General Weaver. No, it is shorter. We worked 
together. And with the help of this committee, and namely 
yourself and all the members, we have been able to make a good 
dent into it. I mean, when you have 88 flying facilities out 
there and 300 General Support Units (GSUs), that is still a lot 
of facilities that we still need help with.
    Mr. Walsh. Let me ask this, this is a little sensitive, but 
what the heck.
    Mr. Hobson. That is right. Everybody is thinking it anyway, 
so you might as well. [Laughter.]
    Mr. Walsh. Well, there was a pretty testy discussion over 
in DOD Appropriations the other day, between a member of 
Congress and a representative of the United States Air Force 
over its commitment to his facility and to the B-1 wing in 
Kansas, and obviously he was upset because there is a lot at 
stake there. But there was a statement by one of the officers, 
something to the effect that, in their view, in the future, the 
Air National Guard would fly tankers and provide airlift 
capacity and that is it. And I do not know whether he is 
speaking ex-cathedra, as the Roman Catholics would say, but if 
that is the case is that reflective of the commitment to the 
Guard bases in general, MILCON and otherwise?
    Mr. Dishner. Notwithstanding the B-1 decision, I do not 
think one should read into that, that all of a sudden the 
operational needs of the Air National Guard are being 
necessarily redirected. Obviously, the installations follows 
mission decisions. If the mission decision is to bed-down a 
certain aircraft or type of aircraft, whether it be lifters, 
fighters, et cetera, that we would be able to--whatever the 
installation is that support that, needs to----
    Mr. Hobson. But I think his question is, the statement was 
made. Right?
    Mr. Dishner. I am not familiar with the statement, Mr. 
Chairman.
    Mr. Walsh. I cannot ask you to comment on something you did 
not hear.
    Mr. Dishner. I would be happy to provide----
    Mr. Walsh. I think it is a widely circulated statement by 
an officer named Roche, I believe.
    Mr. Zakheim. Roche? You mean the Secretary of the Air 
Force? A little more than an officer.
    Mr. Hobson. Well, he was formerly a naval officer.
    Mr. Walsh. That is true, he was.
    Mr. Zakheim. I am not familiar with the statement, 
Congressman. We could certainly check it out for you. As far as 
I know, at least----
    Mr. Walsh. But he does speak ex-cathedra.
    Mr. Zakheim. Well, he is a good Catholic and I do not 
know----
    [Laughter.]
    Mr. Zakheim [continuing]. Whether he speaks inside or 
outside.
    Mr. Walsh. Only the pope gets to speak that. But maybe the 
chairman or the secretary gets to speak it.
    Mr. Zakheim. Well, I would simply say that the decision 
regarding the B-1 was taken on its own merits. And without, in 
any way, prejudicing any other activities of the Guard or 
Reserve, the decision on the B-1 was simply to reduce the force 
so that it would be more effective, and at the same time 
consolidate it. And I am certainly not personally aware of any 
ramifications that go beyond the B-1 decision itself, but we 
could certainly look into it for you, sir.
    Mr. Walsh. So the fact that he said that the Guard would be 
flying tankers and airlift is not reflective of the 
administration's policy?
    Mr. Zakheim. What I would say is, without actually looking 
at the words--and I have been in this town long enough to know 
that you need to see the exact words--I would not really be in 
a position to comment.
    I will say this about my friend, Jim Roche, whom I have 
known for 25 years. He is very responsible and very careful 
about what he says. So I would really have to look very closely 
at the exact words before I could comment on it.
    Mr. Walsh. Thank you, Mr. Chairman.
    Mr. Hobson. Well, if nothing else, I hope everyone 
understands the level of concern about the alleged statement 
and the alleged atmosphere relating to the Reserves and the 
National Guard.
    And if anyone wants to get in a fight on the numbers, I 
have been through this twice. And I can tell you that I have an 
active duty base, one of the largest ones in the world, in my 
district. And I have two Guard units and a Reserve unit in my--
General Duignan used to command. I can tell you, by the 
numbers, a Reserve base does not have the overhead that a 
regular base has. They have people who are there longer who, 
you know, repair and equip those airplanes, and they have 
people there longer who fly them, and they are usually more 
experienced flyers; not taking anything away from the regulars. 
I think the Air Force has proven that you can have a cohesive 
force that works together.
    I think this discussion is very disruptive to all the 
things they are going through now. And while this is not the 
subject of this hearing, it does affect what we do. And 
unfortunately, it is the way in which the B-1 announcement and 
decision came about, certainly at this time, has not been very 
helpful to everybody trying to do their duty.
    And so, I hope that somebody can repair the damage done, 
but I can tell there are e-mails flying all over on this 
subject right now. And it is not very helpful to what we are 
all trying to get done, and that is to provide the best we can 
for the people who serve this country with the funds we get. It 
diverts everybody's attention. So I hope we can get through 
this.
    Mr. Zakheim. Well, Mr. Chairman, I would say, first of all, 
I certainly share the last sentiment that we are talking about 
the people who are serving their country well. It is 
regrettable that there has been so much misunderstanding about 
this. The B-1 effort really does represent an effort to take 
savings, find efficiencies and put them right back into the 
force. And I think we should not lose sight of that essential 
fact.
    But whereas 93 B-1s would not have been terribly survival 
or in a position to communicate very much, the 60-odd remaining 
ones will be both. And we are, therefore, taking money to 
create a real 21st-century force. And in the course of that, we 
are simply funding efficiencies to do that so we do not come 
back to the taxpayers for more money, which, I think, we all 
agree on if we can find ways to avoid doing that we should.
    But it is certainly regrettable that there have been a lot 
of misapprehensions about this. And I do hope we can get past 
that and look at the issue on its merits, because the merits 
are very strong.
    Mr. Hobson. I think the Guard would take back the 56 F-16s 
they gave up that they did not want to take when they took the 
B-1 some years ago, but I know that was not on your watch.
    Mr. Zakheim. Not on my watch, sir.
    Mr. Hobson. I know, but I just thought I would get that in 
there. [Laughter.]
    John.
    Mr. Olver. Thank you again, Mr. Chairman. I have now had 
lots of time to think about a few things here. Actually, I 
would like to return to something that the chairman had 
explored for some time on the housing in Korea.
    My most recent trip was to look at facilities and 
conditions in Korea so that I have of a very recent sense and 
view of the, degradation of quality of life and of the actual 
training facilities that our forces in Korea deal with. And I 
would like to just explore with you a little bit here.
    The amount of money that is listed in the budget for items 
in Korea comes to a total of $228 million--well, actually, with 
the family housing project, it is $240 million, almost $241 
million. And the housing portion of that comes to $118 million. 
Almost exactly half is housing.
    Now I do not wish to take a thing away from the physical 
fitness centers and the vehicle maintenance facilities and the 
general instruction buildings or the electrical distribution 
systems or the sewage treatment upgrades, because those are 
just as degraded as the housing facilities.
    But I did want to explore. My impression is that in Korea, 
unlike our general forces, which are somewhat over 50 percent 
families, that our force in Korea is at the range of 3 to 5 
percent or so family accompanied, so it is a quite artificial 
arrangement compared with the general pattern of our armed 
forces these days.
    Now it turns out that the commander in Korea has a goal of 
making that program 30 percent family housing--well, excuse me, 
that is somewhat inaccurate--30 percent of the personnel in 
Korea can be accompanied, can be families, which would still be 
considerably less than the 50 to 55 percent which is across the 
board in the military services.
    Now the program that is put forward here in this year's 
budget has a total of $105 million for barracks. And again, 
barracks is going to be for singles, some of it is for 
officers, but most of it is for enlisted personnel, I think. 
And only $12 million, $13 million of it is for families.
    Now, the family housing, because it is so much more 
expensive, is designed to cover 54 units of family housing, 
whereas the barracks housing of $105 million is going to get us 
to 1,000 new spaces.
    We need those, there is no question we need those. But this 
is not in any way going to change the ratio; in fact it will 
worsen the ratio of how many housing units there are for 
families in Korea because the number that is there, the 54, is 
less than 5 percent. It will make no dent in what isalready the 
situation of having very few family housing units in Korea.
    Now what should I gain from that? I think those are roughly 
the right statistics here. But does this disconfirm the 
commander in Korea's goal? Is the goal of 30 percent, does that 
have any credence within OSD? Is there any policy goal in OSD 
in dealing with Korea as one of the forward locuses of housing?
    We have other forward locuses, like Incirlik in Turkey and 
the Gulf and maybe the Balkans, but I most recently visited 
Korea, and that is close in my mind, the degradation of all the 
facilities where our people are in Korea.
    Mr. Zakheim. I would like to take a crack at it first and 
then turn it over to my colleague Ray DuBois.
    Your last sentence, you mentioned the word ``policy,'' and 
I think that is the operative word here. To my knowledge at 
least, there has not been a fundamental change of policy yet on 
this issue. I think it is still being evaluated, and it does 
have tremendous policy ramifications. For instance, how would 
the host government react to such a significant increase in 
families coming over and what does it say about the way we will 
be doing business in Korea, having done it differently for a 
half-century?
    Given that that decision has not yet been altered in any 
formal way, it appears that the emphasis that is being placed 
on barracks, which is still the current policy, is appropriate, 
since as you, yourself, acknowledge, and rightly so, we have to 
do more in that account as well.
    So that, pending any decisions otherwise, the priorities 
would seem to reflect, and I think do reflect, the current 
policy that we have out there.
    Ray, would you like to add to that?
    Mr. DuBois. You are addressing the issue, of course, of 
U.S. MILCON appropriations, and the host nation construction 
finance program and the special measures agreement, of course, 
as we saw in that new construction, albeit somewhat over-
engineered, for family housing.
    When we testified before you before on Korea with Tom 
Schwartz, I had those numbers at my fingertips, but the balance 
of family housing versus barracks, family housing being 
weighted more toward the host nation construction.
    I think barracks also include not just barracks rooms, but 
also I think the design of those barracks today includes admin 
rooms and day rooms and other types of units than just one-on-
one or one-plus-one.
    Mr. Olver. Does this represent then a policy that barracks 
are always going to be military construction, MILCON projects, 
whereas--I mean, we will pay for them, at least in part--but 
that family housing as a principle is going to be build-to-
lease or some other kind of arrangement? That is basically the 
host nation kind of arrangements, I think.
    Mr. DuBois. I guess you are asking, kind of, a two-pronged 
question, one that Dr. Zakheim addressed. Tom Schwartz' 
objective of 30-plus percent accompanied tours is going to be 
addressed in the QDR, and that is not yet decided.
    Mr. Olver. QDR is----
    Mr. DuBois. Quadrennial Defense Review, which is being 
folded into the, of course, the Rumsfeld defense strategy 
reviews.
    Number two, the notion about whether we spend our MILCON 
dollars more in terms of barracks versus family housing in 
Korea, I think it is true that we will have an ongoing 
requirement for single, unaccompanied facilities in Korea, much 
higher, percentage-wise, than we do anywhere else in the world.
    Mr. Olver. But you expect that there will be a higher 
percentage of singles in Korea.
    Mr. DuBois. At least for the foreseeable future.
    Mr. Olver. Really? Why higher in Korea than in the Gulf or 
Turkey or in the Balkans?
    Mr. DuBois. I think, as Dr. Zakheim implied, it would be 
difficult to increase those accompanied tours to an extent 
equal to the average around the world by virtue of host nation 
desires.
    Mr. Olver. Well, I take it that the answer to the question 
I am about to ask, which is when will we know if there is going 
to be a policy about what number might occur in Korea, whether 
it is 10 percent, 20 percent or whatever.
    Mr. DuBois. I think the number has to be driven by what is 
the end-strength going to be, based on what the secretary and 
the joint chiefs and the service secretaries decide with 
respect to that Quadrennial Defense Review exercise, which is 
due in the fall.
    Mr. Olver. Will we adopt a policy in the QDR, then, on this 
issue?
    Mr. Hobson. No, there is another problem with that, I 
wanted to interject while he was answering your question. Right 
now, they are renegotiating the host nation thing--I am just 
trying to add this to your equation. You have a ``which is 
first, the chicken or the egg?'' in this thing as you go along, 
because there is some push-back from the Koreans, as I 
understand it, about--and I want to send a strong message--
about their percentage. We have 37,000 folks over there living 
not very well.
    We are going to ante up money, but they need to do their 
part if we are over there, sending our kids over there to 
defend them. And then we need to figure out this question of 
one of the biggest morale problems there: This is the place you 
have more people not wanting to go, you have more people 
quitting as a result of staying in Korea than anything else. 
And so there are a number of quality-of-life things that are in 
that article that you are looking at.
    The other thing that we need to all put in this equation, 
John, is that the Senate does not share--at least my 
understanding of it--until they get there, and I hope we can 
get some of them there to see what these young people are 
living in. And I do not think they have shared, just based on 
our recent negotiations, there may be a better understanding 
than I thought, but we need to bring them along in this 
discussion also, so that we have a comity of action on this 
thing.
    Mr. Olver. Well, to continue, it seems to me we have been 
there 50 years. I do not know if any of you would suggest--it 
might be a hope--but I do not have a realistic hope that we 
would be there any less than another 25 or something like that, 
given the Pacific rim responsibilities and involvements. And 
from our visit, I must say the stress on families is severe. 
Most of those people who are there in an accompanied way are on 
their own. They have brought their family over because they 
wanted their family to be there.
    We have met people, women who had left their children, who 
are in the service, who have left their children and are gone 
for a year tour of duty. And, obviously, by far the greater 
number of men who are there who have left their families 
stateside.
    And where it seems to me there is at least some balance 
that ought to--it would not be nearly the kind of artificial 
arrangement and stressful arrangement if there was some number, 
whether it is 10 or 20 or 30 or what. I do not know what it is, 
but it is probably not the arrangement that there is there now.
    I recognize the need for the thousands of unaccompanied is 
certainly there. But the commitment of only 54 units of housing 
does not come anywhere close to whatever the policy is going to 
end up being, it seems to me, given the kind of stress on 
military families that comes from the arrangement as it is now.
    Mr. Zakheim. I would just say, sir, as you rightly pointed 
out, the issue first and foremost is one of policy. And as the 
chairman says, it is not even a matter just of what the 
Quadrennial Defense Review says, but we do have a negotiation 
going on. And so you have a lot of complicating factors, and 
relative to those the housing issue, at this stage, would 
clearly follow upon both of those larger sets of decisions.
    There is no doubt that unaccompanied tours pose a hardship, 
as they have for everybody for the last half-century. I mean, 
people have been going out there for a year and it is tough. 
And it has not gotten any easier, and in some ways perhaps 
because of communications, but physical proximity is not there, 
and that is very bad for families.
    On the other hand, there is the question of just how you 
make adjustments in a situation unlike, say, in the Gulf, where 
we basically send people in and we send people in under certain 
circumstances and they were accepted under those circumstances.
    Here you have a situation that has been ongoing. And 
therefore, the reaction of the host nation might be somewhat 
different. We have to account for it. I am not in any way 
prejudging what the Quadrennial Defense Review will come up 
with. And as Ray DuBois points out, this is an issue that we 
are seized with.
    But we do have to recognize that there is this larger 
complex of relationships that have been ongoing for some time 
and that get caught up in this host nation negotiation as well, 
so that we need to resolve those issues first. And in the 
meantime, I think we all agree that the barracks need to be 
improved as well.
    Mr. Edwards. I would like to touch on several issues, but 
let me follow up immediately on Korea. What I have admired 
about Chairman Hobson and Mr. Olver, is that there is no 
political payoff to fight for a better quality of life for our 
military families in Korea.
    Secretary Zakheim, you talked about our current policy. Let 
me say up front that you inherited that policy and that 
problem, you did not create the housing problem in Korea. But 
let me be as blunt as I know how on what our current policy is. 
If you assume 70 percent of our married service men and women 
are accompanied in Europe, 10 percent in Korea, let's assume 
that a few percent would not want to be in Korea for 
educational or other reasons: language barrier problems, 
whatever. Let's assume 50 percent of married service men and 
women would like to be accompanied by their spouses and/or 
children. We have 10 percent.
    What our current policy is is this: Because the federal 
government would not spend the money, we are forcing military 
service men and women to spend a year away from their children 
and away from their spouses. And I think that is morally wrong. 
I think it would be a great compliment to this administration 
to look at it in family value terms; that we have a right to 
ask service men and women to sacrifice and they do every day, 
and we understand their deployment sometimes it simply cannot 
be accompanied because of hazards or risks or war, combat, 
whatever.
    But in the case of Korea, it is simply a dollars problem. 
We have said it is more important for the federal government to 
save money than it is for military families to stay together. 
And I think that is an immoral message and I think it is a 
terrible message to send to our service men and women, whether 
they are in Korea or somewhere else. And I would just urge the 
administration to look carefully at this matter and think in 
terms of, do we have the right to ask these families to live a 
year apart, when it is not necessary?
    And again I underscore, that is not presented as a 
criticism of this administration because you inherited the 
housing problem there. You did not create it.
    Secretary DuBois, let me thank you personally for your 
leadership on the Fort Hood RCI project. With 20 percent of all 
the active duty Army divisions there, that is a major project, 
and I am not sure that would have been concluded had it not 
been for your personal involvement and for Chairman Hobson's 
long-term involvement in that program.
    Secretary Zakheim, if I could go back to the math numbers. 
I would not revisit all of them.
    Mr. Zakheim. I am delighted, because I do want to revisit 
them. My math was wrong as well.
    Mr. Edwards. The way I look at it, even with the 
supplemental increase, it was still about a 10 percent increase 
before inflation. Take 3 percent off for inflation, that is 7 
percent.
    Mr. Zakheim. That is not how it works, sir.
    Mr. Edwards. Okay.
    Mr. Zakheim. Let me walk you through it.
    Mr. Edwards. In fact, I would welcome that.
    Mr. Zakheim. Okay. I happen to be an economist, so I think 
I know how to do this stuff, otherwise I suppose I should not 
have passed the courses years ago. [Laughter.]
    What you do is with inflation, sir, in order to get 
yourself, let's say, you are in 2002 dollars, you want to go to 
2001 dollars. So assuming your 3 percent--I am not going to 
argue with that; it is a good rough number--you take 97 percent 
of $5.2 billion. That brings you down to $5.044 billion. Then 
let's assume that 5 percent across the board is contingency. 
That is not really the case at all either, but okay, just for 
argument's sake. That will bring you down to about $4.79 
billion.
    Now, that is a difference from 2001 to 2002 of about $590 
million. Now, if you divide that by 4.2, you get 14 percent. So 
the increase in real terms, leaving aside Davis-Bacon because 
we can go around the table on that a few times, is about 14 
percent give or take. And I think that is pretty healthy and we 
are proud of it.
    Mr. Edwards. And I would like to review at a later 
timethose numbers and that methodology. Maybe if I could ask you to do 
this, and that would be, if it is 14 percent, I compliment the 
administration on that kind of an increase. But if someone on your 
staff could work through----
    Mr. Zakheim. By the way, I did that math myself. 
[Laughter.]
    Those guys did not pass me notes.
    Mr. Edwards. We are doing a lot of pencil math here.
    Mr. Zakheim. You can see my homework. [Laughter.]
    Mr. Edwards. I understand. What I would like to look at, if 
someone could help with this. And again, I would not expect 
this today. But take the 2001 regular appropriation bill, then 
take the supplemental appropriation bill, add that money to it. 
Then take any contingency and reprogramming money that was put 
into MILCON and family housing, add that up. Come up to a 
bottom-line figure and then compare that to the budget request 
for fiscal year 2002.
    My goal is not to either minimize or to exaggerate the 
administration budget request increase, but just simply to get 
the correct math so that we can then tell our service men and 
women what the honest answers are.
    Mr. Zakheim. Mr. Edwards, that is exactly what I did. $4.2 
billion includes the supplemental, 5 percent includes the 
contingency, 3 percent is the inflation.
    Mr. Edwards. You start with 10 percent minus----
    Mr. Zakheim. Well, you do not do 10 percent minus 7. That 
is where I think the misunderstanding may have occurred. What 
you do is, you take this year's total--you deflate it.
    Mr. Edwards. You are using the total----
    Mr. Zakheim. I am not using----
    Mr. Edwards [continuing]. $5.9 billion?
    Mr. Zakheim. No, I am not. I am using $5.2 billion. $5.9 
billion is what we have for military construction.
    Mr. Edwards. Okay.
    Mr. Hobson. Why do not you guys argue this out, because you 
are going to lose everybody in the back room?
    Mr. Edwards. The point is, there is a huge difference based 
on methodology between a 1.2 percent increase and 14 percent 
increase. I think, for the good of our service men and women, 
we ought to work through these numbers. And we will do that, 
Mr. Chairman. It is a fair request.
    Finally, let me just ask this question. I will work with 
this administration on a bipartisan basis to support another 
round of efficiencies, if you want to call that, for 
installations. But my guess would be, if a vote were held on 
that in the House today it would fail. Tell me what you think: 
one, I hope the administration is starting to work on a 
bipartisan basis, one on one with members, on that now or 
otherwise it would not pass in the defense authorization bill. 
My general question to you would be: Tell the members of 
Congress what the implications are in your mind for one-year or 
a 10-year budget if we do not pass another round of--well, I 
will just call it EFI. If we do not pass EFI this year, next 
year, what are the implications for MILCON or defense spending?
    Mr. Zakheim. Well, we are starting to see savings from 
previous rounds. And so, we are no longer in the business of 
estimating future savings. I believe the General Accounting 
Office has been looking at the actual savings, and it turns out 
that we are talking in terms of billions of dollars.
    Now, if we do not have a round--and I think the real issue 
is, you are exactly right, Mr. Edwards, we have to come up with 
something that will pass. It is not enough to say we are having 
a round to charge up this Hill and discover that if things were 
dead on arrival; we are not into that kind of shadow boxing.
    By the way, it is taking us somewhat longer than people 
thought. If it was, you know, just a matter of reviving the 
same old, same old and coming up here, we would probably get 
the same answer again. And this is not a partisan issues at 
all, because both parties are divided internally. What we all 
agree on is that we should do it right, and that will take a 
little bit longer.
    But I think you will find, whether you look at CBO 
estimates or GAO estimates or any independent estimates, that 
the difference--and not just in recapitalization, which 
Congressman Olver and I were discussing, but across the board--
it is billions of dollars. And with every year that is lost, 
there is that much more in the way of savings that are lost.
    Mr. Edwards. Thank you.
    Thank you, Mr. Chairman.
    Mr. Hobson. We are going to Sam, then Mr. Skeen.
    But I think if you would have--and you were in the room 
when this happened--if you would give every member here--when 
the defense appropriations people were down for that breakfast, 
the Secretary had a list of things that you are locked into in 
numbers, which astounded a lot of us that he ran through on the 
increases in just the defense appropriations budget overall, 
which will probably be helpful to most of these people when he 
rattled those off. You do not have to do it now, but that would 
be good to have.
    Mr. Zakheim. Well, get that for you, Mr. Chairman.
    Mr. Hobson. Sam and then Mr. Skeen.
    Mr. Farr. Thank you, Mr. Chairman.
    You know this discussion is really interesting. As I think 
about the bottom line here, sort of, being the future of 
quality of life and I look around this room and realize that 
this is a room of photographs that the federal government--of 
land we own. It seems like, for the first time, we are now 
talking about soldiers as people, having the quality of life 
that our nation has done in trying to preserve our national 
parks and forest. But I think we are moving in the right 
direction.
    I want to give you just three comments of things that I 
really need a response to, just what I have been thinking a lot 
about on this committee. One is, why we do not move to more 
private building on military land. We own the land and, it 
seems to me, that the RCI, if that is the private building 
concept, and why we cannot do that, even on land we do not own 
in a foreign country, so that we do not have to put all this 
capital out-lay up front to get the housing built. It just 
seems to me, good market sense.
    You know, when you go out and develop for the private 
sector, you do not have a guaranteed 100 percent occupancy the 
day you opened. Yet, with military men and women and families 
and soldiers, you do have that 100 percent occupancy, plus a 
guarantee of payments and on time and essentially handling 
discipline problems, all kinds of things. Just seems to me, 
that there is very little risk to the private sector, and that 
we ought to explore it more.
    Secondly, I think, as we go into the next BRAC, having gone 
through very complicated--still going through a very 
complicated BRAC in my own district, what hit me is that whatwe 
should have, probably, with a lot of these bases is what we did at 
Brooks, which was study individually. And I think you ought to look at 
more Brooks and less BRAC. Brooks, seems to me, the idea that allows 
for the local initiative to come in and give a win-win in the military.
    And lastly, what I have also watched is when we give up the 
land, particularly land with housing on it, and we give it to 
the local community free, we have to ratchet up that that 
land--those housing ought to maintain at a level that is 
affordable to the military for the civilian community. Housing 
in America for middle-class people is unaffordable in most of 
the populous states. In California it is insane.
    My daughter was out looking for housing this weekend, and 
she cannot find an apartment anywhere in the entire region for 
less than $1,200.
    And so, you know, I think that we are giving up land with 
housing on it and then allowing the local community to turn 
that housing into high-end housing rather than to livable 
housing. And those are just my comments.
    The questions I have, I want to show you my new favorite 
picture. You finally get to see Fort Ord.
    Mr. Hobson. Take this one, Sam?
    Mr. Farr. No, I did not take this. The Army took it from 
one of their helicopters. This is Ford Ord Reuse Authority, 
which is the local jurisdiction made up of all----
    Mr. Hobson. Pick that mike up, Sam.
    Mr. Farr. The question I have is whether, the Army is 
committed to these storm drains, you can see them coming out 
here. This is all a National Marine Sanctuary out here. This is 
the soldier's club, which is falling into the ocean. Looks like 
you are going to have to abandon it, because we cannot afford 
to move it. All of these green roofs are housing; anybody here 
wants a house, they are free. They used to sell them for a 
dollar, now they are free, you just have to pick them up and 
take them away. Nobody has been able to do that. [Laughter.]
    The question goes, I guess, to P.J. We have asked for $6 
million to have the military clean up their mess here with all 
these storm drains, which go back and link into a system here. 
You abandoned your maintenance on them. This property is all 
being given to state parks. They do not have the resources to 
do it. And we think that is a military responsibility and 
wanted to know what the status is of that request.
    And secondly, the National Guard has actually asked for 32 
of these buildings to move them by rails, which goes right 
through here, down about 100 miles away to Camp San Luis 
Obispo. They say it is going to cost them $10 million because 
these buildings are full of asbestos and lead and they have all 
kinds of environmental issues. But nonetheless, it is cheaper 
for them to move these buildings for $10 million than $10 
million could buy in new construction.
    So the two questions are, what is the Army doing to support 
funding for this outfall, and, what is the Army doing to help 
the National Guard in moving these buildings?
    And lastly, this back area, you cannot see it, clearly in 
this picture was where you shelled, and you have a lot of 
unexploded ordnances there. I just wondered what the budget is 
for Fort Ord UXOs. We were going to have a hearing on this 
subcommittee on UXO, but I would like to get the specifics on 
the UXO cleanup for Fort Ord and what the budget for that is.
    And in my next go-round I am going to ask about FUDs, the 
Naval Postgraduate School and the Defense Language Institute.
    So these are infrastructure issues that I would like to 
have response to. Thank you.
    Mr. Paul Johnson. On the UXO, you know, out of the 27,000 
acres we have there, there are 12,000 acres of it that has 
unexploded ordnance on it. We are reviewing now the feasibility 
studies to determine how much that is, and that will be 
completed in 2005, and with the overall removal action to be 
completed in 2017.
    Mr. Farr. For the entire area to be cleaned up? What about 
the conveyances? And what is your budget right now for the next 
year, for fiscal year 2002?
    Mr. Paul Johnson. I do not have that figure for 2002 for 
that cleanup, but we have not finished the feasibility studies 
yet. So once that is completed, then we will have a budget to 
clean it up. We plan to clean it up by 2017.
    Mr. Farr. All right. Well, can we get an answer to the 
money for this fiscal year?
    And then the storm drainage?
    Mr. Paul Johnson. I am not familiar with that request, sir. 
I have not received that request. We will look into it. We will 
certainly look into it.
    Mr. Farr. We will get you the documentation on that. That 
has been around for a long time.
    And then about the National Guard moving 32 of these 
buildings?
    Mr. Paul Johnson. That, too, I have not heard. The National 
Guard has not heard of it either.
    Mr. Farr. I do not know where the communication has broken 
down on that, but it has been ongoing for over a year.
    While I am on the National Guard, can I ask for my other 
colleagues from California, the status of the L.A. Readiness 
Center, when is that going to be funded, and the status of the 
58th Street Army center in Sacramento, when is that going to be 
funded? Both of those the state has put money into.
    Mr. Hobson. General, would you state your name and get it 
on the record?
    Brigadier General Squier. General Squier from the Army 
National Guard.
    Neither one of those projects right now are currently in 
our FY 02 program because of our funding limitations. I work 
with the state and I am aware of the problem that you are 
raising today.
    Mr. Farr. They are not in your program for this year, or 
they are not in your program forever?
    Brigadier General Squier. The L.A. project is in the FY 03 
program and we will try to accelerate the Sacramento Readiness 
Center in the future.
    Mr. Farr. And how many years out is that?
    Brigadier General Squier. It is a six-year FYDP.
    Mr. Farr. So you have nothing in the next five years for 
either of these?
    Brigadier General Squier. Only the L.A. project at this 
time, sir.
    Mr. Farr. Thank you, Mr. Chairman.
    Mr. Hobson. But you might be able to get it in, Sam.
    Mr. Farr. I understand that.
    I have some more questions, but do you want to go 
aroundwith others?
    Mr. Hobson. Yes, I would like to get to Mr. Skeen. He is 
sitting there very patiently.
    Mr. Skeen.
    Mr. Skeen. Thank you, Mr. Chairman. I appreciate your 
indulgence.
    I would like to address my question to both Mr. DuBois and 
Mr. Johnson, either or both of whom are invited to respond. 
Gentlemen, one of my concerns regards the need to replace the 
anechoic chamber facility that was recently destroyed by a fire 
at White Sands Missile Range. And knowing that the Army 
research lab has recently approved and required paperwork 
calling for the replacement of this facility, I would like to 
ask what priority you gentlemen place on the replacement of 
this facility.
    Mr. Paul Johnson. Sir, that is a $34 million replacement 
project that we have recently completed our studies. But 
because of the technical nature of it, we do not have anything 
this year in the program. We are going to address it in the 
2003-2004 POM when it comes forward.
    Mr. Skeen. So it is alive for you.
    Mr. Paul Johnson. Oh, yes sir. It is alive. We have been 
studying it to determine what it takes to replace it. And it is 
a $34 million project.
    Mr. Skeen. Thank you. Thank you very much.
    Thank you, Mr. Chairman.
    Mr. Hobson. Thank you, Mr. Skeen.
    Mr. Walsh.
    Mr. Walsh. Thank you, Mr. Chairman.
    The installation readiness report--I believe this is--well, 
the ratings for facilities, as you I am sure are aware, the 
highest rating would be C-1, the lowest, C-4, does not support 
mission requirements. Many of the facilities are rated C-4. How 
do you use that report to determine budget priorities?
    Mr. Zakheim. I will start. What we have done in 2002 is to, 
in fact, use the report to determine how we allocated military 
construction for each component. And the way we did it was we 
took the additional funds that were based on the percentage of 
the components C-3 and C-4 installation levels, and used them 
to get those restored to a C-2 level. In other words, make them 
passably fit for habitation, as it were.
    Ray, would you like to answer some more on that?
    Mr. DuBois. Yes. The readiness of facilities, including 
housing, has declined, and 69 percent as you probably know are 
currently reported as C-3 or C-4. And as Dr. Zakheim said, the 
readiness reporting by the four services drove us to allocate 
certain dollars in certain ways.
    Now it is important to recognize that if you or I were to 
look at a building, and perhaps your eye is better trained than 
mine, and it might not look very well, but if it support the 
mission that it is supposed to support, it would not 
necessarily be labeled at C-3 or C-4. Again, it is not the 
condition of the facility per se. Rather it is its capability 
to support the mission and the unit that is housed in it, or 
the weapons systems that are housed in that particular 
facility.
    Mr. Walsh. Obviously, some facilities are larger, more 
expensive. And while you may have a number of facilities that 
are in the C-3 or C-4 range, you only have finite resources. So 
how do you then go to determine where these finite resources 
would go? Is it purely based on the ability of that facility to 
deliver on the mission? Or is it a question of, ``This building 
is really too large this year to deal with. We are going to 
have to set that aside and take care of several smaller ones''?
    Mr. DuBois. I will have to take that for the record, 
Congressman. I think that it is important, as I mentioned, to 
recognize that if you are a C-4--major deficiencies that, 
``precludes satisfactory mission accomplishment,'' or C-3, 
significant deficiencies that prevent it from performing some 
missions--those are unit readiness, but installations readiness 
reporting similarly--those are ones you pay attention to.
    Remember, too, I think it is important to add is that there 
are nine facility classes. For instance, you have operation and 
training facilities: airfields, piers, wharves and so forth. 
You have mobility, maintenance, RDT&E, supply, medical. And 
within each class there is also a set of metrics.
    Mr. Walsh. That is what I was getting at.
    Mr. DuBois. Yes. But I will say this, that the--and this is 
something that is of important concern to me in my current 
responsibilities--each service applies these standards 
differently. And sometimes within an individual service, the 
standards are applied differently. And one of the managerial 
aspects that we are addressing now is how to standardize the 
application of those grading levels, if you will.
    Mr. Zakheim. It is also worth noting that the entire 
approach is a relatively new one; much newer, say, than the 
personnel rating of C-1 through C-4 that we are familiar with. 
I forget. Is it two years old? It is only two years old, and 
that means that the services themselves are still working out 
their own evaluation.
    So we have, kind of, two sets of issues here. One is how 
the services approach a relatively new system and it is still 
in shake-down; and secondly, how do you standardize this sort 
of approach across the services?
    Mr. Walsh. So you went to a new structure for 
prioritization and asset management. But you had a set of data 
that you used, for your prior arrangement, whatever it was. So 
you used that same set of data and just set that up against 
this new system of priorities? Or did you do a complete 
inventory of properties again?
    Mr. DuBois. Again, each service did it on their own. One of 
the things that we are trying to do, and my direct boss, 
Secretary Aldridge, the undersecretary for acquisition, 
technology and logistics, has approved a budget to develop a 
DOD-wide standardized base information reporting system for 
just those reasons.
    And as Dr. Zakheim said, it was only in fiscal 1999 was the 
first year that we reported it to the Congress, but prior to 
that there were varying reporting procedures. We have never 
standardized them. That is one of the things that I found when 
I got into this job, and we are going to move to do that over 
the next year.
    Mr. Walsh. Any early indications of how this is working?
    Mr. DuBois. My boss has not given me the check yet. I do 
not mean to be flippant. The issue is, we have not started yet. 
We have the basic architecture for what we think we need in 
that information management reporting system, and that will 
begin in September.
    Mr. Zakheim. This really goes to the heart of a much larger 
issue in the department, which is how do we manageinformation 
and use it. And this is just one aspect of it. And as you know, because 
Secretary Rumsfeld has said this on many, many occasions, we simply 
have to do better than we have done, whether it is financial management 
or installations management or any other kind of management. Those of 
us who have come from private business are appalled at what we have 
seen. I was in private business 14 years, and I came back to the 
department and it is just overwhelming how much has to be done.
    Mr. DuBois. As I said, too, there are nine different 
facilities classes, and each major command provides a narrative 
when the C rating for a facility class is either C-3 or C-4. 
And this narrative describes the nature and extent of the 
deficiencies, the reasons for the low rating and the potential 
risk to military readiness and the scope of facility 
shortfalls. But it also must indicate plans to raise the rating 
for that facility class up to at least C-2.
    But again, as we all know, human nature being what it is, 
these standards and these narratives are written by different 
people at different times and sometimes for different 
motivations.
    Mr. Walsh. Thank you.
    Thank you, Mr. Chairman.
    Mr. Hobson. I want to quickly ask two things. On the NATO 
security investment program, you are $9 million below last 
year's enacted level. And I am told, and I do not know if it is 
true or not, that a lot of project infrastructure stuff that 
they do has been delayed because we have not paid our money. I 
also think with the current attitude in one of the bodies about 
overseas MILCON, one of the best places we can get our money 
back or get a bang for our buck, especially in Europe, is to 
fund as many of these programs as we can, especially if we are 
going to move the 2nd Brigade south to Vincenza, which I assume 
that would be where we going. After seeing both bases, I think 
that is probably the best place.
    But is that a problem?
    Mr. Zakheim. I do not think so, Mr. Chairman. I really 
think there seems to be a misunderstanding about the way the 
funding is taking place. As far as we can make out, NATO is 
properly funded. What you have is a situation where the units 
of account, the NAU, is pegged to the Belgian franc, which in 
turn is pegged to the euro. Have I lost you yet?
    Mr. Hobson. Yes.
    Mr. Zakheim. Okay.
    Mr. Hobson. Tell me you are going to build this stuff and 
fund it and I would be a lot happier.
    Mr. Zakheim. The stuff is being built. The stuff is going 
to be built. And the stuff is funded.
    What you have is, because of the exchange rate deviations, 
the dollar is very strong against European currencies, 
particularly the Belgian franc, you have therefore some 
additional money that was freed up that is in no way a negative 
impact on the money that has been budgeted and on the money 
that is going to be spent and on the facilities that are going 
to be built. And I think there really has been a 
misunderstanding of the fact that because money was freed up 
some people think that, ``Oh, well, stuff would not be built'' 
or we are withholding money. Not true.
    Mr. Hobson. National missile defense: $273 million was 
moved from the military construction account to the RDT&E 
account according to the fiscal year 2002 budget activities. 
What is the department's rationale for funding construction 
activities with RDT&E funding? And is there precedent for this 
funding method? Also, do you have the statutory authority to do 
this?
    Mr. Zakheim. Okay. The rationale, sir, is that in this case 
what we are looking to is flexibility.
    The entire missile defense program, as you well know, is 
being redefined. It is a transformation program. And in general 
it is my understanding that when you have military construction 
funding it is that the funding is on the assumption that all 
aspects will be funded, that you have a very clear idea of 
exactly what you are building and what it is for and things are 
going to stay that way. Whereas in this case we are talking 
just the opposite, it is truly experimental, and we do not know 
the precise nature of what we will be doing because that is how 
this entire program has been restructured. So for that reason 
alone research and development funding would seem more 
appropriate.
    Now, there is a second reason, and the second reason has 
tremendous policy implications. We are in the business right 
now of testing, we have made that clear, and it goes to treaty 
implications and so on. Military construction, on the other 
hand, would imply a commitment to do things that we may not 
yet, as of this precise moment, be ready to commit. And so 
therefore, again, research and development seems the most 
appropriate way to do this.
    Is there precedent? Yes, there is precedent, but we are, as 
I understand it, going to the Congress for the appropriate 
legislation.
    Mr. Hobson. I have had a briefing on all this, so I am 
somewhat sympathetic to what you are doing, I am just concerned 
about the ability to have oversight on this. And I am not as 
opposed to it if we can get some sort of consensual oversight 
to this committee on what is happening. Because I understand 
the category, and I have had a briefing on what is going on, 
but I still think there needs to be oversight of this. And I am 
not sure that the other committee--and they will get mad at me 
for saying this--but I am not sure how much oversight is going 
to be exercised in this area.
    I am very concerned, as my ranking member has been, over 
stumbling into a violation of this treaty. And I understand all 
the jumps and hoops and all the other stuff, but I just want to 
express somewhat just my discomfort, not with what is going 
forward, discomfort with our inability to have oversight.
    So you do not need to get into a lot on that, you know. 
When I saw the movement of the money, then I had the rationale, 
John and I had the rationale explained, we had a discussion 
last week about it. So I am just concerned about it.
    Mr. DuBois. I spoke to General Kadish about this, as well 
as to Mr. Aldridge, and irrespective of jurisdictional issues, 
the department is prepared to respond to any questions that 
this subcommittee might have, if it is military construction-
related, if it is in the MILCON budget or if it is in the RDT&E 
budget as it pertains to this program.
    Mr. Hobson. Okay.
    John.
    Mr. Olver. Again, thanks, Mr. Chairman.
    Just a comment on the conversation that the two secretaries 
have had with Mr. Walsh here a little bit earlier. I certainly 
applaud all of your efforts to set up asystematic way of 
dealing with the information about facilities so that you can possibly 
manage, because I do not know how it is possible to do proper policy 
analysis without that kind of understanding of the information. And it 
is even very difficult for us to do any really effective oversight 
without that kind of thing. So I think that is a long overdue effort.
    Let me then ask you for a piece of information. Because my 
colleague on my left had used in his hypothetical something 
like 10 percent families in Korea, I do not think it is that 
high. I do not think that we have anything like 4,000 of our 
military there in families. It is, I think, considerably less 
than that.
    Mr. DuBois. Remember General Schwartz explained to us there 
are certain families over there that are official; i.e., they 
are----
    Mr. Olver. I understand.
    Mr. DuBois [continuing]. Command-accompanied persons.
    Mr. Olver. I am going to ask you for some data. I want you 
to give us in an official forum the data for what the different 
services have in military supported family housing and what 
there is in unsupported housing? I know there are some--I do 
not know whether it is hundreds or as many as a thousand 
families who are over there--who have just gone there, and have 
their people on the local market in order to be able to have 
their families together.
    Again, I do not want to dwell on this. I think I made my 
point earlier. But I do want some clear data, so that when I am 
talking about this I will be correct in what I am saying.
    Mr. DuBois. Representative Olver, I will get that to you.
    Mr. Olver. I appreciate that.
    Let me take one other issue that I had--I mean, we can go 
on and I will take as many rounds as my chairman will give me 
here.
    Mr. Hobson. This is it. Sam is the last guy.
    Mr. Olver. All right. Well, let me then take one other one.
    I have been very concerned about environmental compliance 
issues in the Department of Defense and the relationship there. 
In Korea, on the most recent visit, we learned about discharge 
of sewage and petroleum products into surface waters, ground 
waters and into rice paddies. Now that is where the resurface 
waters go, anywhere that there is a flat piece of land, it is 
rice in that most densely populated country.
    That kind of thing has an extremely corrosive effect upon 
the politics in the host nation, on the public relations 
between us and the host nation, in a situation which, over the 
years, has been mutually beneficial to both. It has been a good 
relation and important relationship that we have had. Clearly, 
we believe it is important for the future there in the Pacific 
rim, given the circumstances on all sides of Korea.
    I have to say, I remember visiting, a year or two ago, a 
base in Europe where the U.S. forces are attendant, and I saw 
open burning of garbage going on on that base. Well, on site it 
was told that the host government took care of garbage. So part 
of that smoky, open fire that I saw was our garbage being 
burned.
    Now maybe you can tell me offhand--well, I probably will 
ask you to answer this in more detailed form. But do our host 
nation agreements, are those nation-to-nation or are they base-
by-base within an overall structure of a nation-to-nation 
agreement? What I am looking for, in essence, is to understand 
something about where we have host nation arrangements where 
our environmental laws are being followed or whether the host 
nation laws and regulations are weaker than ours. And I would 
like to have some kind of inventory, in essence, of what those 
host nation arrangements. I do not know whether either of you 
know how many we have and the question of whether it is done 
base-by-base or whether it is done nation-to-nation.
    Mr. Zakheim. Well, I can answer that. First of all, we do 
have quite a few of them. And host nation support agreements--I 
used to negotiate these, last time I was in the building--are 
negotiated nation-to-nation. And within that, you can have 
whatever provisions the two countries agree to with, frankly, 
considerable levels of specificity, but they vary from 
agreement to agreement.
    Mr. DuBois. And I have asked to put together a similar 
matrix. And as we found out, I think, in our travel, the 
overseas environmental basing guidance is dictated to some 
extent by the SOFA, or the status of forces agreement, in that 
country. We also, you and I both found out together, that it is 
supposed to be where the U.S. environmental compliance 
regulations and laws are stricter than the host country, that 
they trump. And if the host country's environmental laws are 
stricter than ours, than the host country laws trump.
    Mr. Olver. It was very simply true, I think, up until about 
1991, but that has been hedged rather badly since that time.
    Mr. DuBois. And it was hedged, as you and I both found out, 
by virtue of the standards, the tests, the applicability 
country, by country, by country. And as we both concurred on 
the way back from WESTPAC, we are trying to get to the base of 
exactly what applies where.
    Mr. Olver. Well, I would like to see, at some reasonable 
period of time, the matrix of what we do, where we have these 
agreements. And what you are saying is that they can be 
substantially different from base-to-base, even in a single 
host country there is going to be a SOFA for each base, I take 
it.
    Mr. DuBois. I think, as we saw in Japan, where the local--
--
    Mr. Olver. They are shaking no there. So maybe it is not.
    Mr. DuBois. Where the local prefectures are rather powerful 
political entities that oftentimes one has to negotiate through 
the host nation, in this case, the Tokyo base national 
government, in order to negotiate something with a local 
government. It is, shall we say, a delicate dance.
    Mr. Olver. Okay. Let me just indicate the arrangement that 
I have mentioned in Korea, which does have really, I think, in 
peace time rather severe public relations and political 
implications for us. And the other one that I mentioned in 
Europe was in Southern Europe, so that may be a little bit 
different from what you might find in, oh, in Iceland and 
Britain and Germany.
    But I would like to see in that matrix what the bases are, 
the country of bases, the services that are provided by the 
host government. Because that garbage burning is a service 
being provided, which certainly is not operating onthe bases 
that our law is governing in that instance, by any means at all. And 
some comparison of what the U.S. standards in the host country 
standards.
    Mr. DuBois. Yes, sir.
    Mr. Hobson. Mr. Edwards had a comment. I am sorry I did 
not----
    Mr. Edwards. I will be very brief, Mr. Chairman.
    Mr. Hobson. You are not going to do any more numbers are 
you?
    Mr. Edwards. Well, just very briefly, Mr. Chairman, only 
three or four.
    And we may agree on the percentages later, but the fact is 
the administration has requested in family housing a $210 
million increase, and military construction, $994.7 million. 
And I compliment and applaud the administration for its focus 
on that. My guess is that is a small down payment to what it 
will eventually take to accomplish the goals that you all 
mentioned in your testimony, but it is a positive step in the 
right direction.
    If I could just leave this question with you, Secretary 
DuBois, unless Secretary Zakheim also would want to follow up 
on this, in a letter to the committee, could you send us your 
analysis of what would it take to increase the percentage of 
accompanied tours in Korea, not only in terms of cost, but in 
terms of negotiations? Perhaps, you know, make whatever 
assumptions you want to make. Pick out whatever percentage 
increase in accompaniment might be reasonable. But tell us what 
the different options are and what the cost would be--some sort 
of analysis. I would like to see what those options are.
    Mr. DuBois. With your permission, Mr. Edwards, I will turn 
that question over to our undersecretary for personnel 
readiness, Dr. David Chu, with whom I spoke to the chairman 
last week on some other of his top five issues. But that kind 
of a question is going to take some numbers crunching.
    Mr. Edwards. Sure.
    Mr. Zakheim. And he would be the best person to give you 
the answer.
    Mr. Edwards. Okay. Very good, thank you.
    Mr. Chairman, thank you, and thank you for the good 
hearing.
    Mr. Hobson. Sam.
    Mr. Farr. Thank you, Mr. Chairman.
    I will get back to my specific questions, but----
    Mr. Hobson. You can only ask one, Sam.
    Mr. Farr [continuing]. I would like to get a response to 
this in writing rather than go into it now, because I just do 
not have time. But Mr. Olver and I were very concerned about 
the MILCON budget for the national missile defense program. R&D 
was a $5.3 billion program last year. It went to $8.3 billion. 
Where is the money being spent and where is it going? We just 
do not have the oversight on that, and I would like to know 
what you did with that $5.3 billion last year.
    Mr. Hobson. He was not here.
    Mr. Zakheim. Certainly, I cannot talk too much about last 
year, but I could certainly tell you that the justification 
book has been sent up by General Kadish, which gives you detail 
and below program element detail--project detail--on what has 
happened to his $7.04, I guess it is, billion. Then there is 
the remaining $1.3 billion, which is what we are calling mature 
technologies. They are essentially the MEADS, the Medium 
Extended-Range Air Defense System, that we are building with 
the Europeans; PAC-3, which you are familiar with I am sure.
    Mr. Farr. But that is not out of the MILCON money, is it?
    Mr. Zakheim. No, no, no. That is $1.3 billion out of the 
$8.3 billion. Okay? Then you have the remainder which is in the 
R&D account and, as I say, that General Kadish has sent up the 
justification books and your staff should be able to get a hold 
of that and see where they----
    Mr. Farr. We will get some questions to you in writing on 
specifics.
    Mr. Zakheim. Certainly, sir. That is fine.
    Mr. Farr. I would like to now go back to my district. I 
have not done anything on the Defense Language Institute, but 
the secretary of defense, in a report to Congress in 2001, 
said, ``The department must revitalize and reshape the 
intelligence workforce. The department faces personnel 
shortfalls in linguists.'' It goes on to say, ``The U.S. 
commander should expect to conduct operations as part of a 
multinational force. Time required to receive information, 
process it, develop operational plans from it, and translate 
the plans and distribute them to multinational partners can 
adversely affect the speed and tempo of operations.''
    Having recognized that, the largest language training 
school in the world is in Monterey. It is the Defense Language 
Institute, run by TRADOC as an Army command. And there are a 
lot of other comments that I would like to submit for the 
record on the importance of that school and the importance of 
linguists.
    My question to the Army is, we now have 2,700 Army, Navy, 
Air Force and Marine Corps students attending the DLI because 
of national security demands in each of the services. The 
CINCs' requirement for the next few years foresees a 
requirement of 3,600 linguists over the next three fiscal 
years. How is the DLI going to support that? There are not any 
military construction projects in the FYDP and the question is 
why. You are going to fund barracks for 4,500 soldiers at 12 
installations in CONUS. What criteria did the Army use in 
selecting those 12 installations and barracks? And why was DLI 
not considered?
    Mr. DuBois. For OSD, I will certainly see to it that you 
get the answers to those questions.
    Mr. Farr. Okay.
    Mr. Hobson. I think there has been a lack of emphasis on 
this. Because I went out there and visited that facility and it 
had equipment in it that you would be ashamed to have. If you 
brought anybody in from around the rest of the world and showed 
them that equipment, it was 1950s equipment.
    They had to take one down and put it back up. Now, I think 
you did get some money for that, did you not, sir?
    Mr. Farr. Yes, you did.
    Mr. Hobson. But, I mean, it is crazy. We go to Bosnia and 
we go to places and nobody--you know, we are hiring all these 
foreign nationals to be our interpreters, because the language 
schools are not teaching the languages where we go or do not 
have the experience to bring the people up and then do not have 
the equipment to operate it. And we got a whole facility out 
there that should be world class.
    I think there is a frustration about that facility. It was 
going to be BRACed, to use a bad word, at one point, and 
somehow it made it through, but until we went out there and 
looked at it, it just was a step child and nobody was carrying 
about it. And there are a lot of facilities around there like 
that. You know, when he says they left the--I know I am going 
to get in trouble when I say this--because when they left the 
peninsula somebody told them out there, whether it was 
Monterey, they left the military.
    I can remember when they did a BRAC in my district. And I 
said, ``Well, that's fine that you are taking my airplanes 
away, but what about the communications squadron that's 
there?'' And they said, ``There's a communication squadron 
there?'' I said, ``Yes, 40 percent of the Air Force's 
capability in that type of communications, located on this 
little base.'' I mean, how in the world did he get that far 
down the system and not--I was thankful because it blew their 
head off. But it just is unbelievable to me that we can get 
down there. And then I hope as we go through this stuff, we 
will get smarter.
    There is a facility that, you know, when Bosnia and Kosovo 
and other things come up, you need it big time instead of 
hiring all those Brown & Root people that--I know, Mr. Cheney, 
might not like that. I do not know how his stocks work.
    But it would seem to me that we are being sometimes--and 
this is true in everything--we tend to be penny-wise and pound-
foolish in some of the things that we do. Just to end this 
thing, I know you have all been very patient.
    Mr. Farr. I have another question, Mr. Chairman.
    Mr. Hobson. Oh, you got another one. Oh, I thought you were 
done.
    Mr. Farr. Well, I was going to reclaim my time.
    Mr. Hobson. All right, go ahead.
    Mr. Farr. Thank you. I appreciate your support on that.
    Speaking of terrific institutions----
    Mr. Hobson. Oh, I know----
    Mr. Farr [continuing]. Naval Postgraduate School. And I 
have let Duncan Holaday off all day. So I want to----
    [Laughter.]
    Mr. Farr. I have not complained about bombing. I have not 
complained about anything.
    You know, you have this incredible higher ed postgraduate 
school there. It is a centerpiece for providing relevant 
graduate education. You are doing some marvelous things that 
are just getting all kinds of raves around the world. But one 
of the issues is the Navy's advanced education strategy 
program. You are really looking at the expanded role of 
providing different types of learning environment for the Navy.
    But the facilities there, particularly the Spanagel Hall, 
which is the main academic building, it was built in the 1950s. 
It needs to come down. I am really surprised that I did not see 
it in the FYDP. Do you know what you are doing to replace that 
1950s vintage building to provide more classrooms to support 
the technology and the web-enhanced learning classes you are 
doing with distance learning? And also, could you get for me 
what you are doing to ensure that the maintenance and upkeep of 
existing buildings at the Naval Postgraduate School will be 
fully funded?
    And lastly, Mr. Holaday, I had mentioned the FUDS, the 
formerly used defense sites. One of those was the Navy FUDS at 
the Monterey Peninsula Airport. What has happened is that they 
have cut the FUDS program; this administration has cut it 
tremendously. And what has happened is in the middle of the 
cleanup project, the local residents were told--and this is 
underneath the houses where people live, where you have ground 
water contamination--that now they cannot finish the project 
because you had to move all the funds to Hamilton Air Force 
Base. Can we get this one finished before you take on Hamilton?
    I know Hamilton has a big problem. It essentially was an 
abandoned base, Mr. Chairman, where they thought they had 
cleaned. And then after they rebuilt it, they found out that it 
has the same problems that American University here in 
Washington has.
    But please do not take all the money from your existing 
clean-up projects just to do Hamilton AFB. I know it has got a 
high priority with Senator Boxer and Congresswoman Woolsey. But 
can we make sure that cleanup is finished at the Monterey 
Airport?
    Mr. Holaday. Sir, I will take the question on Spanagel Hall 
and the maintenance for the record and get back to you on that.
    The FUDS question for the property at the airport, I will 
have to refer over to the Army. They oversee the FUDS program 
for the entire Department of Defense.
    Mr. Hobson. P.J., I hate to do that to you on your last 
hearing.
    Mr. Paul Johnson. You are good at that. [Laughter.]
    Mr. Farr. So the Army does all the FUDS for all the 
services?
    Mr. Paul Johnson. The Corps of Engineers is responsible for 
that, yes, sir.
    Mr. Farr. Okay, could you check into that for me? We will 
give you a lot of work to do before you leave, P.J.
    Mr. Hobson. You have until August 3.
    Mr. Farr. Until the end of August, right?
    Mr. Paul Johnson. The 3rd of August.
    I have a hearing on the 31st of July.
    Mr. Holaday. Spanagle Hall was in fiscal year 2005 FYDP. It 
is in the FYDP in fiscal year 2005.
    Mr. Farr. So it is in fiscal year 2005?
    Mr. Holaday. Sir, it is in there now. So I mean, it is 
competed. We have it in fiscal year 2005.
    [The information follows:]

    After the hearing RADM Johnson informed the committee to 
correct the record that the FY2002 President's budget FYDP 
(2002-2007) did not include this project but sustainment of the 
current budget levels would allow funding within the FYDP.

    Mr. Olver. How big is that?
    Mr. Holaday. Admiral Johnson, since you gave me that 
information, maybe you can take the rest.
    Rear Admiral Michael Johnson. I only remember it being in 
there. It is a replacement. I do not remember the cost and we 
will have to get back to you for the record on that.
    Mr. Olver. How big a building is this?
    Rear Admiral Michael Johnson. It is big. It is a main 
engineering building at the school. It is a large building. A 
lot of money.
    Mr. Olver. How many hundred thousand square feet? 73,000 
square feet?
    Mr. Holaday. We will get back to you on the size of the 
building and the cost of the replacement project.
    Mr. Farr. Okay.
    Mr. Chairman, thank you. As I have pointed out, I thinkthis 
committee ought to--I have to tell the audience because they do not 
know what--when it came around this year for everybody to be able to 
switch committees in the Appropriations Committee--there are 13 
subcommittees--nobody wanted to leave this committee, even though there 
were more exciting committees, even vacancies on the committee room 
that we are sitting in, because of the leadership of Mr. Olver and Mr. 
Hobson. It is a real tribute among their peers that they want to stay 
on this committee because they really believe that the issues we are 
talking about today are relevant to a future military and a future 
America where we really can start building housing for the military 
that can compete.
    I mean, I really think that we have the ability since we 
own the land, and if we own the land, we have the people we can 
put on the land, and we have all the market forces on our side 
to start building bases that will be the envy of this country 
and the world that our military bases ought to be our most 
attractive sights and ought to be as attractive as the national 
park that we are sitting around in this room.
    So thank you for your leadership, both of you.
    Mr. Olver. I just want to thank you all for your testimony 
today. I think this has been an excellent hearing and we will 
have other visits; this is just a start.
    Mr. Hobson. Well, thank you all, and I want to thank the 
members for showing up and asking the questions. It is very 
important for you to educate us, and it is also important for 
you to understand what we are thinking about sometimes. 
Sometimes there is a disconnect, and these are helpful to do 
that.
    I will refrain from talking about AFIT today, even though 
he talked about the language school--or the post-graduate 
school out there, but I do want to wish you well, P.J., and 
thank all of you for coming today. This is a long hearing, but 
you have avoided three or four of them by this one.
    So thank you all. It has been very helpful to all of us, 
and I hope it has been to you to.
    Thank you.
    Mr. Zakheim. Thank you very much, Mr. Chairman.
    [Clerk's note.--Questions for the record submitted by 
Chairman Hobson.]

            Permanent Party Unaccompanied Personnel Housing

    Question. What percentage of the enlisted force does the Department 
estimate is single or unaccompanied?
    Answer. As of 1 August 2001, 45.5% of the enlisted force was single 
or unaccompanied. Additionally, 38.2% of the enlisted force was single 
(without dependents). The total enlisted population was 640,298; 
244,631 were without dependents and 46,811 were unaccompanied.
    Question. What percentage of the officers does the Department 
estimate is single or unaccompanied?
    Answer. As of 1 August 2001, 36.5% of the officer force was single 
or unaccompanied. Additionally, 34.9% of the officer force was single 
(without dependents). the total officer population was 167,831; 58,598 
were without dependents and 2,756 were unaccompanied.
    Question. How many men and women currently live in permanent party 
unaccompanied personnel housing? Of this amount, how many are enlisted 
personnel and how many are officers?
    Answer. As of 1 August 2001, there were a total of 111,018 
personnel living in unaccompanied housing (without dependents, not 
receiving Basic Allowance for Housing). Of that number, 105,905 were 
enlisted personnel and 5,113 were warrant officers and officers.
    Question. What percentage of single or unaccompanied personnel does 
the Department estimate lives in private off-base housing?
    Answer. As of 1 August 2001, there was a total of 710,219 Basic 
Allowance for Housing recipients; 194,905 were without dependents. 
27.4% of the personnel who received Basic Allowance for Housing were 
listed as without dependents, residing off base.
    Question. What is the average age of barracks facilities?
    Answer. The average age of barracks for each Service is: Army: 36 
years; Navy: 38 years; Air Force: 30 years; Marine Corps: 24 years.
    Question. Approximately how many barracks were built over 30 years 
ago?
    Answer. The number of barracks built over 30 years ago is: Army has 
567 barracks; the Navy has 688 barracks; the Marine Corps has 197 
barracks; and the Air Force has 450 dormitories (barracks).
    Question. Provide a breakout of how many barracks are considered 
substandard, inadequate and facilities with central latrines/showers.
    Answer. The following table indicates the number of permanent party 
bed spaces in barracks and dormitories considered substandard or 
inadequate and the number with central latrines/showers:

------------------------------------------------------------------------
                                          Substandard or      Central
                 Service                     inadequate      latrines
------------------------------------------------------------------------
Army....................................          32,700          22,500
Navy....................................      \1\ 41,900           8,303
Air Force...............................           5,300               0
Marine Corps............................      \1\ 11,337           1,894
------------------------------------------------------------------------
\1\ Includes central latrines.

    Question. By Service, what is the total current troop-housing 
deficit?
    Answer. The Army's troop housing deficit is approximately 43,900 
soldiers. The deficit is derived using the total requirement of 138,300 
soldiers, less total funded adequate housing at the end of Fiscal Year 
(FY) 2001 (94,400 soldiers). The result is a deficit of adequate 
housing for 43,900 soldiers.
    Question. How many spaces are included in the budget request for 
troop housing?
    Answer. The Department's FY 2002 budget request includes funding 
for about 17,300 maximum use barracks spaces.
    Question. By Service, what would it cost to buy-out the current 
troop-housing deficit?
    Answer. Total remaining requirement to provide adequate housing, 
FY02-FY08, is $5.4 Billion. Of that amount, $4.7 Billion is in Military 
Construction Army (MCA) funding. The remainder is required in 
Operations and Maintenance, Army (OMA) and host nation funds for major 
renovations.
    Question. By Service, what is the estimated cost per space to 
eliminate the current troop-housing deficit?
    Answer. The estimate cost per space for the remaining program 
(FY02-FY08) is $98,000/space. MCA average is $126,000/space and OMA 
renovations will average $41,000/space. These amounts include an 
estimate for anti-terrorism/force protection measures FY02-FY08. The 
MCA includes the total cost to build Barracks Complexes (sleeping 
rooms, soldier community buildings with dayrooms, mail rooms, storage, 
and kitchen, dining facilities, company, battalion and brigade 
headquarters, increased parking, landscaping, and recreational/open 
space)
    Question. Provide for the record a list of barracks projects 
requested in the budget, sorted by Service, installation, and by level 
of compliance.
    Answer. The barracks projects contained in the FY 2002 President's 
Budget request are:

------------------------------------------------------------------------

------------------------------------------------------------------------
Army.............  Fort Richardson..  AK..............  Barracks
                                                         Complex--D
                                                         Street, PH1.
Army.............  Fort Carson......  CO..............  Barracks
                                                         Complex--Nelson
                                                         Blvd Ph1.
Army.............  Schofield          HI..............  Barracks
                    Barracks.                            Complex--Wilson
                                                         Street, PH1C.
Army.............  Wheeler Army Air   HI..............  Barracks
                    Field.                               Complex--Aviati
                                                         on PH 6a.
Army.............  Fort Campbell....  KY..............  Barracks
                                                         Complex--Market
                                                         Garden Rd Ph2.
Army.............  Fort Leonard Wood  MO..............  Basic Combat
                                                         Training
                                                         Complex PH2.
Army.............  Fort Bragg.......  NC..............  Barracks
                                                         Complex--Butner
                                                         Road Ph2.
Army.............  Fort Bragg.......  NC..............  Barracks
                                                         Complex--Longst
                                                         reet Road Ph2.
Army.............  Fort Bragg.......  NC..............  Barracks
                                                         Complex--Tagayt
                                                         ay Rd Ph 2c.
Army.............  Fort Monmouth....  NJ..............  Barracks
                                                         (students).
Army.............  Fort Hood........  TX..............  Barracks
                                                         Complex--21003
                                                         Block.
Army.............  Fort Lewis.......  WA..............  Barracks
                                                         Complex--17th &
                                                         B Streets, PH1.
Army.............  Fort Jackson.....  SC..............  Basic Combat
                                                         Training
                                                         Complex Ph1.
Army.............  Bamberg..........  GE..............  Barracks
                                                         Complex--Warner
                                                         s 3.
Army.............  Darmstadt........  GE..............  Barracks
                                                         Complex--Kelley
                                                         4163.
Army.............  Darmstadt........  GE..............  Barracks
                                                         Complex--Cambra
                                                         i Frtsch 4028.
Army.............  Hanau............  GE..............  Barracks
                                                         Complex--Pionee
                                                         r 8.
Army.............  Heidelberg.......  GE..............  Barracks
                                                         Complex--Patton
                                                         114.
Army.............  Heidelberg.......  GE..............  Barracks
                                                         Complex--Tompki
                                                         ns 4253.
Army.............  Camp Hovey.......  KO..............  Barracks
                                                         Complex--Camp
                                                         Hovey.
Army.............  Camp Humphreys...  KO..............  Barracks
                                                         Complex--Camp
                                                         Humphreys.
Army.............  Camp Stanley.....  KO..............  Barracks
                                                         Complex--Camp
                                                         Stanley.
Army Reserve.....  Fort Dix.........  NJ..............  Barracks
                                                         Modernization.
Navy.............  NS San Diego.....  CA..............  Bachelor
                                                         Enlisted
                                                         Quarters.
Navy.............  NAF El Centro....  CA..............  Transient
                                                         Bachelor
                                                         Enlisted
                                                         Quarters.
Navy.............  NAS Lemoore......  CA..............  Bachelor
                                                         Enlisted
                                                         Quarters.
Navy.............  NAF Andrews AFB..  DC..............  Bachelor
                                                         Enlisted
                                                         Quarters.
Navy.............  NS Mayport.......  FL..............  Bachelor
                                                         Enlisted
                                                         Quarters.
Navy.............  NS Pearl Harbor..  HI..............  Bachelor
                                                         Enlisted
                                                         Quarters.
Navy.............  NS Pearl Harbor..  HI..............  Bachelor
                                                         Enlisted
                                                         Quarters.
Navy.............  NTC Great Lakes..  IL..............  Recruit
                                                         Barracks.
Navy.............  NTC Great Lakes..  IL..............  Recruit
                                                         Barracks.
Navy.............  NAS Brunswick....  ME..............  Transient
                                                         Enlisted
                                                         Quarters.
Navy.............  Gulfport.........  MS..............  Bachelor
                                                         Enlisted
                                                         Quarters.
Navy.............  NS Norfolk.......  VA..............  Bachelor
                                                         Enlisted
                                                         Quarters.
Navy.............  NSA Jt HQ Cmd,     Greece..........  Bachelor
                    Larissa.                             Enlisted
                                                         Quarters.
Navy.............  COMNAVFORMAR.....  Guam............  Bachelor
                                                         Enlisted
                                                         Quarters.
USMC.............  MCB Camp           CA..............  Bachelor
                    Pendleton.                           Enlisted
                                                         Quarters.
USMC.............  MCB Camp           CA..............  Bachelor
                    Pendleton.                           Enlisted
                                                         Quarters.
USMC.............  MCCG 29 Palms....  CA..............  Bachelor
                                                         Enlisted
                                                         Quarters.
USMC.............  MCB Hawaii (K-     HI..............  Bachelor
                    Bay).                                Enlisted
                                                         Quarters.
USMC.............  MCSA Kansas City.  MO..............  Bachelor
                                                         Enlisted
                                                         Quarters.
USMC.............  MCB Camp Lejeune.  NC..............  Bachelor
                                                         Enlisted
                                                         Quarters.
USMC.............  MCB Camp Lejeune.  NC..............  Bachelor
                                                         Enlisted
                                                         Quarters.
USMC.............  MCCDC Quantico...  VA..............  Bachelor
                                                         Enlisted
                                                         Quarters.
Air Force........  Elmendorf AFB....  AK..............  Dormitory.
Air Force........  Maxwell AFB......  AL..............  Squadron Officer
                                                         School Dorm.
Air Force........  Maxwell AFB......  AL..............  Replace OTS
                                                         Dormitory.
Air Force........  Davis-Monthan AFB  AZ..............  Dormitory.
Air Force........  Buckley AFB......  CO..............  Dormitory.
Air Force........  USAF Academy.....  CO..............  Install AC--
                                                         Enlisted Dorm.
Air Force........  Tinker AFB.......  OK..............  Dormitory.
Air Force........  Eskisehir........  TK..............  Dormitory/
                                                         Mission Support
                                                         Facility.
Air Force........  Lackland AFB.....  TX..............  Dormitory.
Air Force........  Sheppard AFB.....  TX..............  Student
                                                         Dormitory/
                                                         Dining
                                                         Facility.
Air Force........  Sheppard AFB.....  TX..............  Replace Student
                                                         Dormitory/
                                                         Dining
                                                         Facility.
Air Force........  Langley AFB......  VA..............  Dormitory.
Air Force........  Ramstein AB......  GE..............  Dormitory.
Air Force........  Aviano AB........  IT..............  Dormitory.
Air Force........  Osan AB..........  KO..............  Dormitory.
Air Force........  Osan AB..........  KO..............  Dormitory.
Air Force........  Osan AB..........  KO..............  Officer
                                                         Dormitory.
------------------------------------------------------------------------

                       Child Development Centers

    Question. Provide for the record a list of child development center 
projects requested in the budget, sorted by service and installation.
    Answer. The following child development centers are requested in 
the Fiscal Year 2002 budget:

----------------------------------------------------------------------------------------------------------------
                                                                                                           Cost
              Agency                       Location             Installation               Type            ($M)
----------------------------------------------------------------------------------------------------------------
Army..............................  Kansas...............  FT Riley.............  Center...............      6.8
Army..............................  Maryland.............  FT Meade.............  Center...............      5.8
Army..............................  Germany..............  Wiesbasden AB........  Center...............      6.8
Navy..............................  South Carolina.......  MCAS Beaufort........  Center...............      6.0
----------------------------------------------------------------------------------------------------------------

    Question. Provide for the record a list of child development center 
projects requested in the budgeted, sorted by Service, installation, 
and by level of compliance.
    Answer.

                         FY 02 CHILD DEVELOPMENT CENTER PROJECTS--APPROPRIATION REQUEST
                                             [Dollars in thousands]
----------------------------------------------------------------------------------------------------------------
                                                                                                           Appn
               Agency                      Location            Installation            Project title        req
----------------------------------------------------------------------------------------------------------------
Army................................  KS................  Fort Riley............  Child Development        6,800
                                                                                   Center.
Army................................  MD................  Fort Meade............  Child Development        5,800
                                                                                   Center.
Army................................  GE................  Wiesbaden AB..........  Child Development        6,800
                                                                                   Center.
Navy................................  SC................  MCAS Beaufort.........  Child Development        6,060
                                                                                   Center.
----------------------------------------------------------------------------------------------------------------

    Question. How many child development centers does the Department 
currently operate with what capacity?
    Answer. The Department of Defense Child Development System has an 
operational capacity of 169,972. There are a total of 545 child 
development centers with an operational capacity of 64,281. The system 
also consists of 9,000 family child care homes with a capacity of 
53,473; 249 school-age care programs with a capacity of 43,248; and a 
capacity of 8,970 in resource and referral and supplemental service.
    Question. How many more spaces are needed to meet the needs of 
military families?
    Answer. The Department of Defense Child Development System 
currently has an operational capacity of 169,972. Based on our current 
formula for projected demand, the need is for 45,140 additional spaces. 
We are reviewing this formula due to continuous changes in society and 
Departmental demographics. This includes a complete review of current 
space capability and additional child care demand in order to maintain 
a proper balance of care to meet the unique child care needs of the 
Total Force.
    The Department is aggressively exploring all alternatives to 
economically increase the availability of care to support our military 
families. This includes expansion of the on and off-installation Family 
Child Care (in-home care) program, increased partnerships, the 
establishment of Group Homes, as well as facility based programs.
    Question. Provide for the record a list of life, safety/health 
compliance projects requested in the budget, sorted by Service, 
installation, and by level of compliance.
    Answer. There are no safety/health compliance MilCon projects 
programmed in FY02. The projects included in the FY02 President's 
Budget Submission will replace old, substandard, and over utilized 
facilities. Funding and constructing these new facilities will correct 
minor safety/health violations that may exist in the facilities 
currently being used; however, there is no way to quantify these costs.
    Question. Provide for the record a list of environmental compliance 
projects requested in the budget, sorted by service, installation, and 
by level of compliance.
    Answer. Attached is a list of projects. All MilCon projects 
included in the FY 2002 President's Budget requests are Class I 
projects.

                                  NATO

    Question. What was the FY 2002 NATO funding level agreed to by the 
NATO nations?
    Answer. NATO's Medium Term Resource Plan (MTRP) for 2002 was agreed 
to by the North Atlantic Council at its June 2001 meeting. It 
established 185 million NATO Accounting Units (NAU) as the funding 
level for 2002 for the NATO Security Investment Program (NSIP). This 
equates to $551.3 million using the current exchange rate of $2.98=1 
NAU.
    Question. What was the FY 2002 NATO funding level agreed to by the 
NATO nations?
    Answer. The NATO Senior Resource Board identified requirements of 
231 million NATO Accounting Units (NAU) for FY 2002. The DoD budget 
requirement to support the program in FY 2002 is $199 million, 
representing the U.S. cost share based on the existing cost sharing 
agreement and budgeted exchange rates.
    Question. What is the U.S. cost share of that requirement?
    Answer. The U.S. cost share of the FY 2002 NATO funding level is 
24.7 percent, which equates to a DoD budget requirement of $199 
million. The Department's FY 2002 program will be financed as follows: 
$162.6 million of new budget authority, $25.4 million of new budget 
authority, $25.4 million of FY 2001 savings, and $11.0 million from 
recoupments of previously financed U.S. projects.
     Cost shares for the NSIP are dependent on whether France 
participates in a project. If France participates the U.S. share is 
22.3330%. If France does not participate; our share increases to 
25.5311%.
    Question. How many on-base housing units are in the Department?
    Answer. In the FY 2002 President's budget, the Department 
identified an approximately on-base family housing inventory of 268,000 
units.
    Question. What is the average age of on-based housing?
    Answer. The Average age of family housing is as following: Army; 36 
years; Navy: 35 years; Air Force: 37 years; Marine Corps: 35 years.
    Question. Approximately, how many family housing units were built 
over 30 years ago?
    Answer. The Department maintains about 177,550 family housing units 
over 30 years old.
    Question. What is the current total family housing deficit for the 
Department of Defense, both in units and in cost of replacement, 
repair, or improvements?
    Answer. The following table represents the Department's estimates 
of family housing deficits new construction, replacement and/or 
improvements:

                                             [Dollars in thousands]
----------------------------------------------------------------------------------------------------------------
                                                                        New
                                                                   construction     Replacement     Improvement
----------------------------------------------------------------------------------------------------------------
Army:
    Units.......................................................           1,368       \2\ 3,724      \2\ 26,769
    Costs.......................................................    \1\ $410,400        $604,404      $2,003,240
Navy:
    Units.......................................................          15,600           5,569          18,801
    Costs.......................................................      $2,294,300      $1,162,000      $1,737,200
Air Force:
    Units.......................................................           6,000          26,300          32,900
    Costs.......................................................        $780,845      $3,421,860      $2,959,110
Marine Corps:
    Units.......................................................           9,449           8,501           7,805
    Costs.......................................................      $1,457,200      $1,696,900        $454,500
----------------------------------------------------------------------------------------------------------------
\1\ All of the deficit new construction is in Korea, an exceptionally high cost area.
\2\ Does not include 34,624 inadequate units which are proposed for replacement or improvement through future
  privatization actions.

    Question. By Service, in the next 20 to 30 years, how many 
Department of Defense properties will reach 50 years of age (the 
minimum age for listing a property on the National Register)?
    Answer. In the next 20 years, the Army will have 40,049 buildings 
reach 50 years of age. In the next 30 years, the number is 50,911.
    Over the next 20 years, 35,086 United States Navy properties will 
reach 50 years of age. During the following 10-year period, an 
additional 11,377 properties will pass the 50-year mark. Adding the two 
figures together yields a total of 46,463 United States Navy properties 
that will reach 50 years of age over the next 30 years.
    For the United States Marine Corps, over the next 20 years, 14,003 
properties will reach 50 years of age. during the following 10-year 
period, an additional 4,166 properties will pass the 50-year mark. 
Adding the two figures together yields a total of 18,169 United States 
Marine Corps properties that will reach 50 years of age over the next 
30 years.
    The Air Force currently has approximately 92,500 real property 
structures in the U.S. (52,900 housing and 39,600 non-housing). In the 
next 20 years, approximately 51,200 Air Force structures (35,400 
housing and 15,800 non-housing) will reach 50 years of age. In the next 
30 years, approximately 61,800 Air Force structures (41,400 housing and 
20,400 non-housing) will reach 50 years of age. These figures represent 
structures on both open and closure installations situated in the U.S. 
They do not account for potential demolitions or structures on overseas 
installations.
    Question. By Service, in the next 20 to 30 years, how many 
Department of Defense properties will reach 50 years of age (the 
minimum age for listing a property on National Register)?
    Answer. The Army will have the following buildings reach the age of 
50 years within the next 20 to 30 years: 20 years--40,000; 30 years--
51,000.
    Question. By Service, which three active-duty installations have 
the biggest backlog of deferred maintenance?
    Answer. There are no standards for computing and comparing a 
compounded ``backlog of deferred maintenance'' among the components and 
installations, either in the Department of Defense or in the Federal 
Government as a whole. As we reported in our April 2001 report to 
Congress, titled ``Identification of the Requirements to Reduce the 
Backlog of Maintenance and Repair of Defense Facilities,'' the 
Department of Defense has developed and is transitioning to improved 
performance metrics. For annual sustainment of facilities, the 
Department can now compute a standard requirement by installation, and 
this is displayed in the referenced report. We have also modified our 
accounting databases to begin tracking annual sustainment execution in 
FY 2002, and are expanding this capability Department-wide in FY 2003. 
Beyond sustainment, the Department has created a separate facilities 
restoration and modernization program. The restoration portion of this 
program is directed at the ``backlog'' of inadequate facilities--those 
rated C-3 or C-4 in our readiness reports to Congress. This 
``backlog,'' estimated in the referenced report to be at least $62 
billion, is caused by a variety of factors--one of which is deferred 
sustainment. Installations with large restoration funding requirements 
within each Service are:
Army
White Sands Missile Range (New Mexico)
Fort Bragg (North Carolina)
Fort Benning (Georgia)
Air Force
Andrews Air Force Base (Maryland)
Edwards Air Force Base (California)
Kirtland Air Force Base (New Mexico)
Navy
Naval Station Pearl Harbor (Hawaii)
Naval Station Norfolk (Virginia)
Naval Shipyard Pearl Harbor (Hawaii)
Marine Corps
Quantico Marine Corps Base (Virginia)
Camp Lejeune (North Carolina)
Camp Pendleton (California)
    Question. By Service, which three active-duty installations have 
the biggest backlog deferred maintenance?
    Answer. The three Army installations having the biggest backlog of 
deferred maintenance are as follows.
    White Sands Missile Range: $656M.
    Fort Bragg: $443M.
    Fort Benning: $390M.

    [Clerk's note.--End of questions for the record submitted 
by Chairman Hobson.]
                                ------                                

    [Clerk's note.--Questions for the record submitted by Mr. 
Farr.]

    Question. I understand that Army is taking back housing at Fort 
Hunter Liggett previously on the BRAC list. I also understand that this 
housing will be privatized and that the privatization of this housing 
will be combined with the privatization efforts at Fort Ord and Moffett 
AFB. Is this true? Does that mean that the housing privatization 
contract for all three bases will be awarded to one contractor?
    Answer. Forces Command (FORSCOM) has identified a continuing need 
to provide an enclave to support the Reserve Component mission at Fort 
Hunter Liggett, CA.
    The Deputy Assistant Secretary of the Army (Installations and 
Housing) has reviewed this information and found sufficient 
justification to retain a portion of the Army family housing and 
selected supporting activities previously excessed as BRAC facilities.
    A determination has been made that 40 of the existing 81 family 
housing units are the minimum essential to support the FHL Reserve 
Component mission.
    The Army is currently planning to utilize a two-step Request for 
Qualifications (RFQ) to award development of two Community Development 
Management Plans in California. The first award will be for the family 
housing at the Presidio of Monterey, with a possible option for the 
housing at the Naval Post Graduate School. The second award may group 
the family housing at a number of installations that are under the 
jurisdiction of FORSCOM--Fort Irwin, Moffett Federal Airfield, Camp 
Parks, and Fort Hunter Liggett. The Army is currently assessing the 
alternatives and pros/cons of soliciting these sites as part of a 
group.
    Question. Currently, the Army owns and is responsible for the 
upkeep and maintenance of the Fort Ord Storm Drainage System. However, 
Army has failed to provide or ask for funding to maintain the system, 
which has led to erosion of the system, drainage overflows and other 
system failures. Continued deferred maintenance will exacerbate these 
problems. I have requested funding to support an alternative storm 
water disposal system but have yet to receive supporting 
documentation--specifically Form 1391--from the Army. When can I expect 
to receive that information?
    Answer. The Fort Ord storm drainage system is excess to the Army's 
needs and will transfer to the recipients of the surplus property. 
These recipients include the Fort Ord Reuse Authority (FORA) as part of 
their no-cost Economic Development Conveyance (EDC) and the State Park 
Service under provisions of a Public Benefit Conveyance. The Army does 
not program improvement funds for excess properties, and this property 
is being conveyed at no cost, ``as is''. It is for that reason that the 
Army has not prepared investment documentation (i.e.: DD Form 1391) for 
this property. Work of this nature is more appropriately accomplished 
by the receiving entity. Federal assistance for such work may be 
available through grants by the Department of Commerce's Economic 
Development Agency.
    Question. The BAH for the Monterey Peninsula is currently between 
$1000 and $1200 per month for a 2-bedroom apartment, supposedly based 
on a housing survey of local rents. Yet the real estate industry will 
tell you that the current 2-bedroom rental on the peninsula--if you can 
find one--goes for twice that amount and oftentimes more. How can your 
survey be so wrong? What steps will the Army take to correct this 
problem with its BAH survey and formula?
    Answer. BAH rate is based on the local median rental housing cost, 
renter's insurance, and utilities for a Military Housing Areas (MHA). 
The Department of Defense contracted Runzheimer International to 
annually collect the housing cost data. This is accomplished through 
BAH data collection (survey). When the local median housing cost is 
established, the housing costs in all the locations, in an MHA 
designated adequate for soldiers to live, are taken into consideration. 
The Monterey MHA is not exclusively comprised of the Monterey 
Peninsula, Monterey, Carmel, and Pebble Beach. These locations are some 
of the most expensive real estate in the country. The Monterey MHA 
extends south to Bradley, north to Boulder Creek, west to Hollister and 
contains middle class communities such as Salina, Castroville, Marina, 
Sand City, Seaside, Prunedale and Del Rey Oaks.
    The most effective way for the Army to impact BAH rates and ensure 
that rates accurately reflect rental housing cost is local command 
involvement. Commands are afforded and opportunity to submit rental 
housing cost data to Runzheimer International for use in computing the 
local median housing cost for their locations. This process is intended 
to give commands the opportunity to ensure data from undesirable areas 
is excluded and to ensure the BAH rates' accuracy. Last year the Army 
did not submit housing cost data for the Monterey MHA to Runzheimer 
International for inclusion in the 2001 BAH rates. This year the Army 
(Fort Hunter Liggett) submitted rental housing cost data to Runzheimer 
International for the Monterey MHA. The data collected this year will 
be used to set the 2002 BAH rates.
    Question. There are approximately 2,700 Army, Navy, Air Force, and 
Marine Corps students currently attending the Defense Language 
Institute (DLI). Because of national security demands, the National 
Security Agency, the regional CINC's and the military services foresee 
a requirement for 3,600 linguists over the next 3 fiscal years. If the 
military and intelligence agencies are forecasting a requirement for 
more linguists, which will mean increased enrollment at DLI, why aren't 
there any military construction projects on this year's FYDP for DLI?
    Answer. The fiscal year (FY) 2002 Future Years Defense Program 
(FYDP) contains two projects located at Presidio/DLI. They are both 
currently in FY 2007. The following data is from the current FYDP:
          1. FY 2007, PN 25091, Audio Visual Media Center: $3.6M.
          2. FY 2007, PN 46623, General Instruction Building: $3.8M.
    Projects are placed in the FYDP based on the priorities they 
receive from the Installation, the Major Command, and the Army.
    Question. The FY02 Army budget for training facilities is $241 
million. DLI is a TRADOC facility. Please tell the subcommittee the 
last year a military construction project appeared on the FYDP for DLI, 
an educational training facility?
    Answer. Projects at the Presidio/DLI have appeared in the following 
Future Years Defense Program (FYDP):
    FY 2002-2007FYDP (current): There are two projects listed in FY 
07--
          1. Audio Visual Media Center, PN 25091: $3.6M.
          2. General Instruction Building, PN 46623: $3.8M.
    FY 2000 President's Budget: The FY 00 Budget included one project 
as part of the Unspecified Minor Military Construction, Army (UMMCA) 
program. This project was Congressionally Directed as part of the UMMCA 
program.
          1. Video Tele-Training Facility, PN 40443: $1.4M.
    Question. What is DOD's long-term strategy for modernizing DLI's 
antiquated classroom facilities?
    Answer. The general instruction facilities in support of the 
Defense Language Institute (DLI) are currently in C-3 condition 
(impairs mission accomplishment) and are included in the first ten-year 
increment of the Army's Facility Strategy. The long-term strategy is to 
achieve full funding for the Facility Strategy, and that will improve 
facilities at DLI to a C-1 status. The first increment of our Facility 
Strategy requires an investment of about $10 billion which is only 
partially funded at this time.
    Question. The FY02 Army budget for barracks construction and 
modernization is $524 million. It is my understanding this account 
funds barracks for 4,500 soldiers at 12 installations in CONUS. What 
are the criteria the Army used to select those 12 installations for 
barracks construction and modernization?
    Answer. The Army's current barracks modernization program is 
focused on permanent party soldiers assigned to troop units. By fiscal 
year (FY) 2008, we plan to complete the funding for all required 
barracks complexes. First priority is to fund projects at installations 
that must have one or more projects each year in order to complete the 
program by FY 2008. These include installations in the U.S. such as 
Fort Bragg, Schofield Barracks/Fort Shafter, Fort Lewis, and Fort 
Campbell. Several other installations require projects nearly every 
year. We must also provide a significant amount of funding in Europe 
and Korea to complete the program by FY2008. Projects for other 
installations then fill in the remaining available funds each year, 
with the focus on facilities in the worst condition.
    Question. The president has a directive for achieving a 10% 
reduction in energy usage. California is home to 10% of the nation's 
DOD population, and is the largest single consumer of electricity in 
California, accounting for about one percent of the state's peak load. 
What are the Army and Navy doing to implement the president's directive 
for energy conservation at DLI and NPS?
    Answer. The Defense Language Institute Foreign Language Center 
(DLIFLC) is located at the Presidio of Monterey (POM). POM has 
initiated several actions to reduce its energy use overall, especially 
during peak hours. The installation has expanded the normal Energy 
Awareness Month of October into a yearlong public information/awareness 
program. The POM recently completed a based-wide replacement of 22,000 
older lamps with higher efficiency lamps. This action was accomplished 
using an Energy Savings Performance Contract (ESPC) in barracks, 
administrative and academic facilities. Preliminary project results 
indicate that electric demand has been reduced by about 5 to 10%. POM 
is working with the local utility and DLIFLC to explore additional 
measures for reducing energy use.

    [Clerk's note.--End of questions for the record submitted 
by Mr. Farr.]
                                           Thursday, March 8, 2001.

                            QUALITY OF LIFE

                               WITNESSES

SMA JACK L. TILLEY, SERGEANT MAJOR OF THE ARMY
MCPON JAMES L. HERDT, MASTER CHIEF PETTY OFFICER OF THE NAVY
SGTMAJ ALFORD L. McMICHAEL, SERGEANT MAJOR OF THE MARINE CORPS
CMSAF FREDERICK J. FINCH, CHIEF MASTER SERGEANT OF THE AIR FORCE

                       Statement of the Chairman

    Mr. Hobson [presiding]. Good morning. The committee will 
come to order. I want to, first of all, say that you will 
probably see some people going in and out here today, 
gentlemen. It is not a lack of interest in you or our committee 
today. Every subcommittee of the Appropriations Committee is 
meeting this morning as we begin our appropriations season once 
more.
    I want to thank the members that are here and especially 
our newest members, one of whom is here, Joe Skeen of New 
Mexico, who is a new member of our committee, a senior member 
of the Appropriations Committee.
    Mr. Skeen. We really decided that you have got a very good 
committee going here, you pack it in this tight. Now, if you 
come up with the money, we are in good shape. [Laughter.]
    Mr. Hobson. That is what we all worry about.
    And we have Mr. Vitter, who is a new member. He is not here 
at the moment.
    And I think all of the people on the other side are the 
same, John.
    Mr. Olver. I have no new members to introduce to you.
    Mr. Hobson. And no members to introduce. [Laughter.]
    So we will get started here, because this is, I think, for 
all of those in attendance, a very interesting hearing today.
    The new administration has signalled its support for 
improving the quality of life of our troops and their families 
by the recent call for $5.7 billion in additional quality of 
life military spending.
    This spending includes $1.4 billion for pay raises, $3.9 
billion for military health care and, most important for this 
subcommittee, $400 million for improved military housing, 
something which we have been working on for a number of years.
    Frankly, this is welcome news, and I am pleased that the 
President shares the belief that improving the life and working 
conditions of our military personnel and their families should 
be a top priority.
    I noticed Mr. Vitter, our newest member here, is going to 
join you guys. Well, he can sit there for now, I guess.
    You do not want to sit next to the sergeant there. Those 
stripes will rub off on you. [Laughter.]
    This task of ours has grown harder since the budget for 
this subcommittee over the years has continued to shrink while 
our needs have continued to grow. We look forward to working 
with the administration to reverse this trend.
    We are faced with many challenges this year, and I would 
like to summarize the major issues on which we are going to be 
working this year, because I think these are important to each 
of you, and it also gives an idea to the committee where I 
think we might go.
    First of all, on housing, the department owns and maintains 
approximately 300,000 housing units. Two-thirds of this 
inventory is over 30 years old and requires a substantial 
annual investment to meet the maintenance requirements.
    In the barracks, over 50 percent of the inventory is over 
30 years old. The current deficit estimates for single 
servicemembers is 114,000 barrack spaces. The total cost to 
achieve the desired end state is $7.6 billion.
    In childcare, despite the fact there are already over 800 
childcare development centers, the Department of Defense 
estimates that they need an additional 250,000 childcare spaces 
just to meet the current demand.
    Overseas infrastructure. Facility needs were neglected 
during a drawdown in Europe in the 1990s. There are also 
serious problems at our facilities in the Republic of Korea. 
Our overseas bases are bearing the brunt of supporting our many 
international missions, and they must be able to fulfill their 
roles.
    Now, this is another one that I have been preaching about 
for some time, and I cannot get anybody to listen to me 
anywhere on this. It is not your problem, but it is going 
totake money from all of you. Over the next five years, approximately 
40,000 structures maintained by DOD will reach 50 years of age. It must 
be evaluated for historic significance.
    We cannot afford to divert funds from our key 
infrastructure to cover the additional costs of maintaining 
nonessential buildings. We have already got too many of these 
out there. Now that is taking money, in my opinion, out of the 
missions from the people that you represent to maintain these 
historic houses. And we do not have any control, or very little 
control, over what happens.
    Housing privatization, another discussion that we will all 
have, and our committee will continue to have. The Military 
Housing Privatization Initiative provides the department with 
an additional tool in their effort to revitalize the existing 
family housing stock and eliminate the housing deficit by 2010, 
which has been the goal.
    However, the administration and Congress need to monitor 
the progress of the privatization program to ensure that the 
department is actually making progress; two, that they are 
eliminating or obtaining the new or remodeled housing with the 
lowest cost and liability to the Federal Government; and, 
lastly, that privatization housing units are being built to 
community standards. We want your people to live in quality 
housing that meet the standards of the community, so they do 
not look around and say, ``Even though these are new, they are 
not up to what the rest of the community is living in.'' We are 
changing that.
    There are many other infrastructure problems facing the 
Department of Defense. The department is only budgeting 70 
percent, 80 percent of the cost necessary to maintain 
facilities in their current conditions. To sustain what we 
have, we need to create savings through improved business 
practices and new public-private business relationships.
    While we certainly have our work cut out for this year, we 
are maintaining our tradition in the subcommittee by first 
discussing the quality of life issues facing our men and women 
in uniform. Today we are going to hear testimony from the 
senior enlisted personnel from our respective service branches 
regarding the quality of life for our military forces.
    We are very pleased that you have taken time out of your 
busy schedules to be here with us today. I might say, I enjoyed 
travelling with you guys when we were overseas.
    Quality of life issues cannot be left out of any discussion 
we have in this subcommittee because they are vital to morale 
and retention efforts of our all-volunteer force. A soldier, 
sailor, airman or marine will not maintain a high level of 
morale if working conditions are antiquated and in poor repair.
    Likewise, a military family who must live in housing that 
was poorly built, was poorly maintained, and does not meet 
their needs undoubtedly factor that in when the time comes for 
the servicemember to consider reenlistment.
    You are the senior military personnel most in touch with 
the needs of our young service personnel and their families. We 
look forward to hearing your observations.
    However, let me first recognize our distinguished ranking 
minority member, Mr. John Olver of Massachusetts, for any 
statement he might wish to make. And I want to say that John 
and I have worked very well and our committee has worked very 
well together over the last couple of years to try to achieve 
these goals. And I really appreciate the fact that he stuck 
with me again to be the ranking member on this committee.
    John.

                Statement of the Honorable John W. Olver

    Mr. Olver. Thank you very much, Mr. Chairman.
    I also would like to welcome the men who are here 
representing the backbone of the military forces serving both 
at home and abroad. This is always a valuable hearing because 
we get a different perspective from you, as you represent the 
enlisted men and women under you, and a very valuable 
perspective on what impact our committee may have had upon the 
quality of life for our military personnel.
    I am sure that your constituents, your troops, have many of 
the same concerns that other Americans have with decent housing 
and working conditions, good health care, good educational 
opportunities, and good economic opportunity--those being in 
the forefront. Our ability to provide those has a good deal to 
do with the readiness of our forces. In particular, the men and 
women should not have to worry about their families while they 
are deployed by this Nation.
    Now, I am very pleased to hear the chairman lay down some 
markers of where we have been and the concerns that we still 
have: the logistics and the demographics of our infrastructure, 
I guess one would say, although demographics is usually used 
for people. I was surprised to see the cameras here today for 
this hearing in particular. I suspect it is in part because the 
chairman has laid down those markers for how we ought to 
function, and I agree with those. I hope we will have the 
resources and the will to deal deliberately with you.
    Last year at this time, when you were here, we were much 
concerned, for instance, about the issue of the changes in the 
basic allowance. I would be very interested to hear what you 
folks see from your constituencies that we can learn about how 
the housing issue is going now with that change in basic 
allowance.
    So I am just looking forward to hearing what you have to 
say. And I would comment, we do have more than one subcommittee 
meeting this morning.
    I don't know whether you have got to go to a point, to get 
to your major one or not?
    Mr. Hobson. I'm not going to go. I've got two other ones.
    Mr. Olver. I am going to have to leave here for 15 or 20 
minutes.
    Mr. Hobson. Well, I think when we get down to the question 
part, the question and answers, if you want to slip out, that 
should not take too long.
    All of your written statements have been entered in the 
record, or will be entered in the record. But I want you to 
summarize your testimony in front of us. Then we will go to 
questions from the members that are here in the manner in which 
they arrive.
    We are going to start with the Sergeant Major of the Army, 
Jack Tilley. He pointed out to me yesterday when he stopped by 
my office that--you guys need to know this--he is an insider 
with me, and I did not remember it, because we were in Bosnia 
with General Nash at the Russian compound some years ago, and 
they tried to knock me off of a swinging bridge. Now, he did 
not do it. I think the Russian guy did it.
    Sergeant Major Tilley. Sir, I tried to save you. 
[Laughter.]
    Mr. Hobson. That's how he wants to remember it anyway, 
right?
    So why don't you go ahead, Sergeant, and summarize your 
statement for us?

               Statement of Sergeant Major Jack L. Tilley

    Sergeant Major Tilley. Yes, sir. Good morning, Mr. 
Chairman, and distinguished subcommittee members.
    I am honored and privileged both to be here and also be the 
12th Sergeant Major of the Army. This is the first time for me 
to testify, and I am really looking forward to working with all 
of you.
    I would really like to introduce two of my counterparts 
right here. This is Sergeant Major Lackey, the senior 
noncommissioned officer for the Army Reserve, and Sergeant 
Major Lever, the senior noncommissioned officer for the 
National Guard.
    When I was sworn in on the 23rd of June, the Chief gave me 
some real simple orders. He said, ``Go out and visit soldiers 
and family members. Find out what their issues and concerns are 
and be able to come back and pass that information.
    Since I have been sworn in, I have visited about 46 
different installations. They include Germany and Korea, Italy, 
and the Balkans. I have tried to travel as many places as I 
can, and that includes about 70,000 miles and about 35,000 to 
40,000 troops.
    First and foremost, I would like to pass on to you that--
you know this already--we have a great Army, and we are doing a 
great job. We should be very proud of what our soldiers are 
doing. Our soldiers are motivated, they are fit and they are 
ready, but it is a busy Army.
    Right now, today, we have about 31,000 soldiers deployed, 
away from their home stations, at about 65 different locations. 
Those numbers are really typical for the Army right now. That 
includes about 4,200 Soldiers Reserve and Guard units that work 
right along with us. The Guard and Reserve are really, right 
now, the key. They are doing all they can, and we probably 
could not get the job done without them. Also, about 122,000 
soldiers are deployed to about 111 different locations.
    But I would really like to point out to you this morning 
the five things that soldiers talk to me about when I am out 
visiting in their areas. The first thing being well-being or 
housing, the infrastructure which you already alluded to. There 
needs to be a constant focus on our base operations, the money 
that we need to maintain that infrastructure. And I would not 
just say housing because housing is a key, housing for soldiers 
and family members but also the dining facilities, the gyms, 
the maintenance areas, that also need a focus and the 
appropriate money to take care of those areas.
    You know, the three-tier approach, I think, is doing a 
great job. The privatization, I think it is going to work. It 
is going to take awhile, but I think it is the right focus. 
Also, the new construction, and also the Basic Allowance For 
Housing (BAH) raise is going to help us in the long run.
    But associated with that is pay for soldiers. There is a 
lot of concern about the pay for soldiers out in the field. 
They always ask you, you know, ``What are we doing about pay? 
What is the focus on, as far as pay?'' There is a lot more----
    Mr. Hobson. When I was in the private sector, everybody 
asked me that, too. [Laughter.]
    Sergeant Major Tilley. Well, sir, that is something 
everybody says, ``Give me more money.'' I understand that. But 
after being in the military for so long, I am really surprised 
about the younger soldiers asking about retirement benefits, 
and it is not just the soldiers. It is really the family 
members that are asking about those benefits. They want to know 
whether or not they need to commit themselves to the military. 
And that is really a key part for us in all services, not just 
in the Army, and is really associated with retention, which you 
brought up just a few minutes ago.
    Retention and recruiting, you know, we have to enlist about 
182,000 soldiers a year and reenlist about 68,000 soldiers a 
year. And I will tell you, at this time, it looks like we are 
going to make it, and we are doing a good job with that.
    The last thing I would bring up to you is TRICARE.
    Mr. Hobson. I wrote it down earlier. [Laughter.]
    Sergeant Major Tilley. I think we have taken a positive 
step for TRICARE. I think they are moving in the right 
direction. But I will tell you, we cannot stop now. They need 
the adequate money to continue on, to do those things not only 
for the active duty, but also for our veterans and our family 
members. We are working hard at it, but they need to continue 
to keep that focus on TRICARE to do the things, of course, that 
we need done.
    I do not want to leave you with the impression that the sky 
is falling. You know, the Army is ready. They are motivated to 
do exactly what they have to do at any time. As I go around, I 
see a lot of positive things from soldiers. In fact, as I go 
around, I am glad I am a soldier, because I think it is a great 
profession.
    But I also would like to compliment you, compliment this 
subcommittee. You have worked hard to support us, and I 
appreciate that. And so, for the Army, I would like to thank 
you for what you do. It is important. It is important for us to 
come in here and have this dialogue with you and upfront 
conversation about what our concerns are.
    Is there still plenty of work to do? I would say there is. 
We need to make sure that we do not lose sight of that. And I 
really, really look forward to working with all of you.
    Thank you, sir.
    [The prepared statement of Sergeant Major Jack L. Tilley 
follows:]
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         Statement of Master Chief Petty Officer James L. Herdt

    Mr. Hobson. Thank you.
    Next, we are going to hear from Master Chief Petty Officer 
of the Navy James Herdt.
    Master Chief Petty Officer Herdt. Good morning, Chairman 
Hobson, and members of the committee.
    Mr. Hobson. I might say we have another member; Chet 
Edwards from Texas came in.
    Mr. Edwards. Good to see you, sir.
    Mr. Hobson. Morning. He has a very important project in 
Texas that he is very interested in, if the Army will get it 
done for us.
    I just sent a little message there for you, Chet. 
[Laughter.]
    Mr. Edwards. Thank you, Mr. Chairman. I appreciate that.
    Master Chief Petty Officer Herdt. Thank you for the 
opportunity to speak on behalf of sailors and families of our 
great Navy. This is my third opportunity to testify before the 
committee, and it my distinct pleasure to thank you, on behalf 
of America's Navy families serving around the world, for taking 
time to listen and to respond to their concerns.
    Sailors enthusiastically send their thanks for your 
continued congressional support for full funding of housing 
allowances and continuing to close the pay gap between military 
and their civilian counterparts, just to name a couple. Your 
efforts in last year's legislative session are helpful in our 
extremely important war for talent.
    As with my counterparts here today, my duties had me 
travelling again over 200 days last year, visiting with 
thousands of sailors and their families stationed, literally, 
around the world. Your Navy continues to deliver sustained 
forward presence on station, in the interests of America's 
defense and in support of worldwide democracy.
    This continuous, mobile forward presence is the unique 
attribute that your Navy brings to the military table for 
ensuring America's defense. Approximately 40,000 sailors are on 
deployment on any given day, lasting up to six months.
    In the most inspirational part of my job, visiting with 
your heroic sailors around the world, I find they do not 
complain about deploying or the time-honored tradition of 
serving aboard warships. Deployments are what Americans ask us 
to do, and our vehicles for combat are ships. Sailors know this 
and take an intense pride in fulfilling their duty to their 
fellow Americans.
    We in the Navy have built up very positive momentum toward 
winning our war for quality personnel, and it is essential that 
both military and elected leaders take the necessary steps to 
sustain this momentum.
    Some say our sailors today are better than ever before. 
While I am not convinced they are better than our amazing 
predecessors that built our proud history, I do propose to you 
that they are as good as ever before but much better informed. 
Because of this, we must do our very best to fulfill our 
commitment to provide competitive compensation and the best 
living and working conditions we can for our servicemembers.
    Navy families enthusiastically received the gains Congress 
provided to better financially compensate servicemembers in 
last year's budget. Everyone here knows we will never be able 
to pay our servicemembers enough for their sacrifices, but 
sailors question why, in a time of historical budget surpluses, 
why they are not financially compensated better for those 
sacrifices that provide the protection for this country to grow 
and prosper.
    We must maximize every opportunity to not only improve 
regular military compensation, but also improve compensation 
venues, such as better housing, working conditions and more 
comprehensive consideration for military families.
    Your approval for fully funding Basic Allowance For Housing 
(BAH) to 100 percent for military families was a great step 
toward enhancing our servicemembers' quality of life. Also, 
ongoing public-private venture initiatives and other military 
construction projects are bringing us closer to housing our 
country's defense in a more deserving manner, thanks to your 
ongoing effort.
    While I strongly emphasize the importance of continuing 
your support for improving our housing for our forces, I would 
also like to encourage added support for improved working 
environments for our sailors. All too often in my travels I 
meet extraordinarily motivated sailors becoming unnecessarily 
discouraged by having to overcome limitations imposed by worn-
down, out-of-date working environments.
    Describing some of our World War II era aircraft hangers as 
out of date is probably being generous at best. These less-
than-desirable working conditions obviously have an adverse 
effect on sailors' morale and are making our battle for keeping 
quality people all the more difficult.
    We in Navy leadership are doing our best in our battle for 
quality people. We are attacking this on a three-front 
approach.
    The first is always the necessary recruiting. The Navy met 
its recruiting goal for the past 27 consecutive months. While 
recruiting is always a challenge, our recruiters are 
consistently rising to the occasion.
    The second front we are attacking is retention. We are 
expending considerable time in reenergizing our retention 
efforts. This will help ease the pressure on recruiting while 
preserving our investment in sailors we have already grown.
    Finally, we are critically analyzing our attrition rates. 
This is a delicate topic because we certainly do not want to 
compromise our high standards, but we are finding we can reduce 
our attrition rates simply by better meeting sailors' 
expectations for challenges, compensation, quality of life and 
quality of work.
    Fortunately, America has sons and daughters who realize 
that the importance of freedom and democracy goes beyond 
financial value. Relative to the vital job they do in ensuring 
the freedoms we all enjoy, they do not expect much. Our 
commitment to improving compensation in working and living 
conditions is essential to sustaining the fighting force 
America has come to expect from us and to ensuring that we are 
responsible stewards of the taxpayer's dollar.
    I am convinced that the quality of the facilities in which 
we train, work and live play a vital role in retaining Navy 
families. As I stated in my written statement, I have three 
main concerns in regard to quality of life in military 
construction.
    The first is to continue pursuing equitable compensation 
for the sacrifices of our sailors, of which fully funding basic 
allowance for housing is an essential part thereof.
    The second is increasing our commitment to continue meeting 
the growing need for military housing in the Navy, including 
continuing support for the Navy's public-private ventures.
    Finally is a renewed commitment to build and sustain Navy 
infrastructure that sailors will be proud to come to work in.
    Full support of these three initiatives would certainly be 
a welcome expression of commitment from this congressional 
committee. Your United States sailors and their families 
volunteer to endure many hardships in the name of preserving 
what America stands for, and our full commitment to support 
them is the very least they deserve.
    I look forward to addressing your specific questions on 
these and any other issues you may wish to discuss, and I thank 
the committee for its audience and its continued support.
    [The statement of Master Chief Petty Officer James L. Herdt 
follows:]
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    Mr. Hobson. Now we will hear from the Sergeant Major of the 
Marine Corps, Alford L. McMichael.
    Nice to see you again.

            Statement of Sergeant Major Alford L. McMichael

    Sergeant Major McMichael. Nice to see you, sir.
    Good morning, Mr. Chairman, and to the distinguished 
members of the Military Construction Subcommittee.
    I am privileged to have the honor to come and be able to 
speak to you this morning on the projects and programs that are 
very important to the Marine Corps quality of life and to the 
military construction program that we are both working hard to 
continue to sustain and to better for the quality of life for 
not only the servicemembers but for the family members as well.
    But I would like to first say thank you for all that you 
have continued to do in these areas to help us reach where we 
are today. As I sit here this morning, I must tell you that 
there are 172,600 marines on our active rolls, with 114,000 of 
them that occupy operational commands, which leaves us 30,500 
of them that are forward based, forward stationed, forward 
deployed and forward training around the world to help our 
country defend democracy.
    With that said, it allows us to focus on the quality of 
life and the infrastructure where we leave our family members. 
And when I speak of family members, it is important that you 
understand that we have 163,000 family members in our service 
today; 68,500 of them are our spouses, and 94,500 happen to be 
our children. That means that the quality of life is very 
important to the leadership of the Corps and to the family 
members that we represent each day.
    Now, according to our most recent quality of life survey, 
you will find that we are continuing to find satisfaction in 10 
of the 11 areas of life, when it comes to quality of life. But 
we also will submit to you that there is a decrease in 
dissatisfaction, about a 26.4 percent decrease of 
dissatisfaction in those areas as well, which, in essence, is a 
20 percent decrease from 1993. But when you look at leisure and 
recreation areas around the Corps today, our marines are 
telling us that they are satisfied and continuing to be 
satisfied at a rate of 4 percent.
    But this morning, Mr. Chairman and members of the 
committee, I have to submit to you that I am also getting about 
a 4 to 6 percent dissatisfaction with our young marines with 
the military construction and the barracks that they have to 
live in. And that is in two areas, in the area of space and the 
area of privacy.
    But with your continued support--and we are putting funds 
toward this--since 1996, you have been able to support us with 
an average of $65 million a year, so that we can build new 
barracks, and we are doing that. As a matter of fact, we are 
building three new permanent party barracks and one training 
barracks, one at Marine Barracks, 8th and I; Quantico, 
Virginia; Camp Lejeune; and the training barracks which we are 
now happy to be putting at Twentynine Palms, California.
    What this will do for us at the Marine Corps will give us 
692 more rooms to house our single junior marines, which, in 
essence, based on the 2x0 configuration that we are building 
our rooms today, will give us 1,384 more spaces.
    As you know, we are largely a young force; 50 percent of 
that young force happens to be single, which allows us to be 
responsible for over 93,000 bachelor spaces worldwide. 
Unfortunately, we still have 7,800 of those spaces that are not 
adequate. But, before you focus on that, we are very happy that 
we are finding success, because in 1996 we had 16,000 of those 
spaces that were inadequate. So we are making progress, and the 
progress is coming from the 2x0 configuration that we are using 
today.
    That 2x0 configuration allows us to man two Marines per 
room and share a single bath. As we continue this process, we 
will be able to meet the lifeline of drawing that down from the 
14.9 years life cycle to meet more of the Department of the 
Navy cycle of seven years by the year 2000. Although we will 
build all of these great barracks, and we need more--I will not 
sit here and tell you that we do not need more and we do not 
need help--but we have to also focus onwhat goes in these 
barracks.
    And what we are focusing on today is to give them the 
quality of life inside as well as the standards outside. And we 
are doing that with what we call a ``whole room concept.'' What 
that means is we are putting furniture and equipment in the 
rooms that will suffice quality of life for these young men and 
women who have stepped up to serve our country. And we are very 
proud of that. And if we continue this whole room concept, we 
will be able to eliminate this inadequacy by the year 2005.
    I will tell you, although I am very concerned about my 
junior enlisted marines, I am also concerned about the 163,000 
family members. And that means that we have to provide adequate 
and quality homes and affordable homes around the world. Today, 
we are responsible for 23,000 units where we house our family 
members, approximately, around the world.
    But although that is 23,000, it is still not enough to do 
what we need to be done because we have to lease so many. We 
have 125 homes that are leased in San Diego, California, and 
600 units that are leased in Twentynine Palms, and 276 that are 
being leased or rented at Marine Corps Bases Hawaii.
    But the BAH continues to make progress and continues to 
forward our focus toward the zero out-of-pocket with the BAH by 
the year 2005. We will have a great effort to meet our goals.
    But we will also do that with the help of what we call our 
public-private venture process, the PPV. We are very excited 
about the public-private venture process because it will help 
us eliminate the inadequate housing and stay on track to meet 
our time line of 2010.
    But as I sit here today, I can tell you, as early as 10 
November of year 2000, we kicked off our public-private venture 
program in California at Camp Pendleton. Five hundred and 
twelve homes had been revitalized, and 200 more new homes will 
be built.
    Also, we have projects at our Marine Corps Bases Albany 
that we will turn over to the developers so that we can enhance 
our housing at Camp Lejeune. And we will have projects at 
Parris Island, where we train our Marines, to transform 
civilians to Marines, and Beaufort, South Carolina, along with 
Twentynine Palms. These are very important projects because 
they will help us to get where we need to be, to take care of 
the quality of life and the infrastructures, where we leave our 
members when we are deployed around the world.
    As we look at the support of community, we also realize 
that the welfare of our families, of recreation and the 
motivation of being taken care of as normal citizens of this 
great country, we have also invested in that as well, because 
we have three major projects going for the year 2001. And one 
is at Quantico, Virginia, and Miramar, where we will be 
building fitness centers for our Marines and their family 
members, as well as a daycare center at Camp Lejeune.
    I can tell you about all of these. And in my tenure as 
Sergeant Major of the Marine Corps, traveling around the Marine 
Corps worldwide, I cannot tell you that our Marines are happy 
with everything they have, but what I can tell you is that they 
understand that help is on the way with your support and the 
leadership that is continuing to give them a vision of what is 
out there.
    But as we call our Marines to go in harm's way to defend 
this great Nation, they should also be able to expect to come 
home in the arms of their family members with a good quality of 
life and believe that their efforts of serving this country are 
being received with gratitude.
    Thank you for your time.
    [The prepared statement of Sergeant Major Alford L. 
McMichael follows:]
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    Mr. Hobson. Thank you, Sergeant Major.
    And now we will hear from the chief master sergeant of the 
Air Force, Frederick J. Finch. Welcome.

         Statement of Chief Master Sergeant Frederick J. Finch

    Chief Master Sergeant Finch. Good morning, Mr. Chairman, 
and members of the committee.
    It is an honor for me to appear before this committee here 
today. This is my second time, as you know, testifying, and I 
welcome the opportunity to speak to you about issues that 
affect the quality of life for the airmen in the United States 
Air Force.
    As you know, I am here on behalf of the more than 400,000 
enlisted members of the United States Air Force who are on 
active duty, in the Air Force Reserve and in our Air National 
Guard. As you know and have seen in traveling with us, our 
airmen are serving all corners of the world, whether they are 
at home station or deployed.
    About 18 months ago, we restructured the way we deploy 
members in the Air Force, and people have embraced this 
expeditionary concept. We have recently been through the 
complete cycle of deployments, the first go-around, and have 
made some incremental improvements in the process that we have. 
And this has helped us to get a better handle on predicting the 
deployment for our people and put us on the road to reduce 
Operation Tempo (OPTEMPO) as a major concern for the men and 
women.
    Our emphasis this past year has been on recruiting and 
retention and has paid off in some areas. Recruiting goals for 
this year actually are on target, and we have instituted 
several programs to continue this positive trend.
    Retention rates for us have stabilized for our first-term 
airmen, but the warning lights are certainly still on for our 
second-term and our career airmen as retention rates continue 
to lag behind the desired goals in the Air Force.
    During my first year as the chief master sergeant of the 
Air Force, I spent more than 200 days in the field. I actually 
find the best part of this job is visiting people and getting 
out in listening mode and finding out what their issues and 
concerns are. My duties have had me circling the globe, and I 
visited the men and women in Europe, Asia and certainly across 
the continental United States.
    While out and about, I have encountered three common themes 
during my visit.
    The first is that our airmen want to believe they do 
important work. And in talking with people, I found that in the 
majority of cases, they do.
    Second, our airmen want to be appreciated for what they do 
and the sacrifices that they make. And I feel we have done a 
better job in recognizing the contributions to the mission. I 
appreciate the members of Congress and other agencies for many 
of the recent improvements that we have made in basic allowance 
for housing (BAH) funding, the recent pay raise, eliminating 
TRICARE co-pays, and expanding some of the opportunities for 
educational benefits.
    Lastly, they want to be taken care of within a reasonable 
fashion for themselves and their families. And my boss, General 
Ryan, has a favorite saying: ``We recruit people, but we retain 
families.'' I am a firm believer in that concept. When it comes 
to quality of life, it affects not only the servicemember, but 
also their family. It is in this area where I believe we still 
have some work to do and where you, members of the committee 
and Congress, could assist us in making some positive steps.
    Direct compensation is probably the most visible way to 
improve quality of life for our people. Although I welcome the 
projected 4.6 raise across percent pay the board that is 
coming, I believe we still need some areas to target our more 
senior people mid-level and senior NCOs. The warning light for 
us is on retention in this specific group, and that is an area 
we ought to focus on, to send a positive message that 
reinforces our appreciation for their work and recognizes the 
important role that they have in today's Air Force.
    For our people, there is no doubt that safe and affordable 
housing for both our single and married airmen is vital to 
their readiness and is one of our top quality of life issues. 
As outlined in my testimony, we continue to strive to meet our 
current Air Force family housing master plan, which prioritizes 
and identifies the resources required to revitalize inadequate 
units. The master plan gives us a road map. But in the current 
fundings, we are still going to fall about $2.4 billion short 
in order to renovate all of the inadequate units we have by the 
2010 deadline.
    Another area of concern is the deteriorating workplaces, 
which impairs readiness and reduces the efficiency of our 
uniformed and civilian workers. The major commands in the Air 
Force have identified nearly $200 million of critical 
requirements as roof, heating, air conditioning, plumbing and 
floor repairs for the everyday workplaces of our airmen. 
Therefore, I believe the Military Construction (MILCON) funding 
levels need to be increased so we can replace the facilities 
that have far surpassed their life expectancy.
    Today, more than ever, the direct connection between 
quality of life and readiness is clear and indisputable. Our 
men and women deserve safe, modern and functional places to 
work, to live and to play. It is essential we continue the 
efforts to increase funding for support of the quality of life 
for our troops.
    Again, let me thank the committee for its support and 
giving me the opportunity to speak with you, and I look forward 
to answering your questions today. Thank you.
    [The prepared statement of Chief Master Sergeant Frederick 
J. Finch follows:]
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    Mr. Hobson. Thank you.
    Let me do three things before we go to questions. First of 
all, I would like to introduce our new clerk, Valerie Baldwin. 
Valerie is over here in the corner. We are happy she has joined 
us this year. Brian Potts is still with us here. And Mary 
Arnold is here. We have a lean but talented staff.
    I would also like to make the comment that I traveled with 
you gentlemen around, visited each of your services, and we 
have traveled some other places. And I think the country can be 
very proud of the people you represent. Wherever we go, sure, 
there are problems. But wherever we go, these young people are 
doing their missions in a quality way, and it is an honor for 
us to try to help you in the problems we have.
    But they are doing a great job, and you just have to get 
out there and visit with them to really understand how well 
they are doing. And I think sometimes when problems happen, 
people do not really see how every day everybody is getting up 
and going out and doing their job very well.
    The other thing we are going to do in this committee, as we 
have tried to do in the past, there are not a lot of people--I 
see Mr. Boyd is here today, but he is prior military--but there 
is not a lot of experience in the Congress today with prior 
military service. I was anenlisted guy in the Guard and 
activated a long time ago, and sent to France.
    So what we have tried to do is get out and show our 
committee and show other members of Congress what types of 
living conditions there are overseas. I have been around this 
country a little bit, but not quite as much as I think we 
should. I am announcing, I think most of the members know, we 
are going to take a trip to Texas. There are a lot of bases in 
Texas. We are going to look at three or four different bases 
down there.
    I do not know if we are going to get to a Marine Corps 
base, but we are going to a naval installation, so maybe we 
will run into Marines there. But we are going to look at Army 
and Air Force. We are going to Chet's district to look at Fort 
Hood. I do not think we are going to get down to Louisiana or 
Florida on this trip.
    And we are going West, not to Massachusetts. Sorry, John.
    But I think it is going to give us an experience, to see 
what is out there and what we do. Later on, we are probably 
going to go overseas, because Korea is a problem for all of you 
in the housing, in the living conditions, in the installations 
that are there.
    We are probably going to stop in Hawaii because we put a 
lot of money into some facilities there; I have a hard time 
with those dollars. I have got to look at that stuff. Well, I 
like Hawaii, but I really am looking at some money we are 
putting into some facilities there.
    We are going to Okinawa. We are going to stop in Japan 
because Japan, apparently, is one of the better places for our 
housing. I want to see what it looks like when it is supposed 
to be good.
    And then we are going to go to Korea, and we are going to 
see what is in Korea, and see if we cannot get some better 
handle and better ideas on what we might do innovatively in 
Korea to get that moving. We put a lot of money in there last 
year, as most of you know, but there is still, as I understand, 
a lot to be done there. So we are going to do that, expose 
members to what it is like to live in a barracks.
    You know, I lived in a barracks with a gang latrine. I know 
they don't do that anymore. So some of the things to me, I 
guess, are not as bad as some of the people say they are today, 
when you lived in some of that old stuff.
    We are going down to Lackland, too, because I want to see 
if my old--I had never thought I would want to go back to 
Lackland after going to basic there. [Laughter.]
    But we are going to go back where the Air Force has a 
privatization facility there that we want to look at. Later on, 
I think we are going to try to go to Camp Pendleton and cut the 
ribbon out there on a family housing program out there.
    So this committee is going to be energized, I think. I am 
hoping that the administration helps us with some of the 
problems that we have so that we can move forward.
    And with that, John, do you have any questions that you 
would like to ask this morning?
    Mr. Olver. I would like to pass to my other members, if 
possible.
    Mr. Hobson. Okay.
    Mr. Olver. Or to Mr. Edwards. If my other members have 
other things they have to do, I will stay.
    Mr. Hobson. I think, if you do not have any, I have got to 
go over to Mr. Vitter for just the five minutes, and then we 
will come back, because we are going to go back and forth by 
how people arrived. And you and I were first. So if you have 
got something you want to ask now, you want to ask now?
    Mr. Olver. When I start asking, it will go a lot longer 
than five minutes. [Laughter.]
    Mr. Hobson. Okay, and you get longer than five minutes.
    All right. Just take five minutes and ask anything. 
Welcome. And then we will go to Chet. He is second. And then we 
will go to more.
    Mr. Vitter. Thank you, Mr. Chairman.
    I am new to the committee and new to the subcommittee. I am 
very, very excited to be here. I wanted to come to this 
subcommittee in particular, and I appreciate, the chairman, 
your help in that.
    Even before I was on the committee and subcommittee, in my 
neck of the woods, in southeast Louisiana, I had been working 
with a group on quality of life issues, really sort of 
preparing for the next Base Realignment and Closures (BRAC). 
And I am very eager to expand that focus nationally.

                         HOUSING PRIVATIZATION

    Down in the New Orleans area, we have a public-private 
partnership going to build housing that we think is very 
promising and very successful. I am curious about, in detail, 
what you think some of the problems to be worked out in that 
model are, and what other new innovations you may see coming 
down the line to try to leverage our money as effectively as 
possible for housing are.
    Master Chief Petty Officer Herdt. Sir, if I might, I think 
the housing you are talking about is one of our projects.
    Mr. Vitter. Correct.
    Master Chief Petty Officer Herdt. When I came to this job 
three years ago, we were sort of in the debate over public-
private housing, and in fact, we in the Navy had a couple of 
pilot projects out there that did not come to fruition in the 
way that we would have hoped that they would have. They were 
wonderful pilot projects. We learned a lot, a lot of what not 
to do in Public Private Venture (PPV).
    In the summer 1998, we had a large conference to discuss 
how to structure PPV for at least--and I do not want to get 
into the finances of it because I am not the expert there--but 
from a sailor's perspective, how they would view public-private 
venture projects, and sort of got all the liars in one room, if 
you will, and locked the door.
    They came out about two to three weeks later. And they 
settled on, basically, three issues that relieved me of the 
concerns I had about pursuing public-private venture as a 
result of those pilot projects.
    One was: We ought to construct them in a way that the 
sailors have zero out-of-pocket expense, just as they do in 
current military-owned housing. Anything that would take us off 
of that will be seen as something less. So, zero out-of-pocket 
expenses.
    The second piece of it was construction standards. You 
cannot argue with construction standards in most of our 
military housing that has lasted as long as it has. It has 
become problematic because we have had it for so many years. 
But, in fact, when you take a look at a great deal of our 
housing, it has been renovated a number of times. You do not 
usually do that in residential housing, to any large degree, 
certainly not the scope that we have in the military. 
Sobuilding to a credible standard is very important so that you do not 
get into one of these businesses where the partner comes in, and they 
realize their return on investment in five to 10 years, and they are 
not too concerned about the quality after that.
    The third piece of it, quite frankly, is more of a military 
issue alone, from my perspective, and that is: The sailor needs 
to deal with the military housing office and not deal with 
these contractor-landlords on a one-on-one basis. Otherwise, we 
will just shift the burden of what is wrong and what develops 
to be wrong in any project that we have right into the command, 
which is not the place for it. They need to be dealing with a 
single military point of contact that can coalesce any 
complaints or gripes that they have and go to work with the 
contractor or landlord to fix those things.
    So those three elements alone really freed me up to throw 
my wholehearted endorsement behind public-private venture.
    The last thing you asked is how we might leverage this in 
the future. If this works out to the way that we think it ought 
to down the road, I am not sure why in the future you could not 
expand some public-private venture in--now, this is just 
Herdt's perspective on this, I would tell you; it is not 
necessarily a full-Navy perspective. But by Herdt's 
perspective, if you were successful in public-private venture 
in the family housing business, I do not know why you could not 
go into an apartment type of complex on a single-sailor 
perspective. I would want to fully pilot something like that 
well in advance of ever committing to doing something like that 
though.
    Mr. Hobson. And we are going to have quite extensive 
hearings. This has been a pet deal of mine, as they all know. 
And we are going to build the community standards. These are 
going to stand up under the financial scrutiny, hopefully, of 
everybody.
    And the Navy, particularly, has gotten the message. When I 
first got here, the Navy was going to do 10,000 units in one 
shot, and they had not done one right up to that point, as you 
mentioned. And they kind of shifted gears, and I think they 
have done a good job.
    We are having a little struggle with one of the services 
right now. And that is why, if you would, I would like to go to 
Mr. Edwards, because he may want to talk about that a little 
bit because we have spent--and I am going to say this here so 
you all understand. In one of the services, we have spent $25 
million, and we do not have the first house out of the ground 
under that concept. We do under the old concept at Fort Carson.
    And I am very concerned about the fact that we do not have 
anything out of the ground yet in that particular service, and 
so I am going to let Chet talk about that.
    Mr. Edwards. Mr. Chairman, I know the time is short.
    I may even have to save that to the second round. I do 
think that the public-private partnership idea is going to be 
crucial, because I think it looks as if we are going to 
continue to face real limits and difficult choices in domestic 
discretionary spending if we stick to a 4 percent a year cap. 
So it seems not to matter which administration is in the White 
House, we are going to face some tough budget choices. And I do 
want to get into that.
    The first thing I want to say, because we are going to have 
to go to vote in just a minute, and the most important thing I 
want to say is thank you. Thank you for your excellent 
testimony today, and even far more important than that, thank 
you for your lifetime of commitment to our service men and 
women and to our country. I feel privileged to sit at the same 
table with the leaders, the noncommissioned officer leaders, of 
our military.
    When I talk to foreign leaders, military leaders, who come 
to Fort Hood in my district, the thing that just blows them 
away is the culture and the leadership of our noncommissioned 
officer corps. And I just want to thank you for what you do day 
in and day out. And it amazes me, considering the number of 
people for whom you have responsibility, that none of you 
complained about your own salaries. But it amazes me that you 
are not paid significantly more, considering that if you have 
the kind of responsibility in the private sector you have in 
the military, you would be paid 10 times more than you are 
getting right now.
    Just very quickly, one of the things I appreciate from 
Chairman Hobson and Mr. Olver is that there are very few 
lobbyists around Capitol Hill for overseas housing. That is not 
in anybody's congressional district. There is no political 
benefit for someone back in their district. And if you are 
trying to lobby for submarine or Air Force airplane programs or 
Army tanks, you have got quite a few subcontractors and 
contractors stationed all over the country lobbying on Capitol 
Hill.
    When you are talking about military housing, there are very 
few lobbyists. When you are talking about lobbying for 
improvement of overseas housing, you have had one or two 
lobbyists here, the chairman and the ranking member and those 
of you who know how important that is.
    Under the chairman's leadership, we have made some real 
improvements and investments in Korea and overseas, but could 
you tell us, just in general, where are the greatest problems 
overseas in terms of housing, if you were to try to rank them 
for you respective services?

                       Overseas Housing Priority

    Sergeant Major Tilley. I will take that, sir.
    Congressman, I think Korea and Germany are both important. 
I think they are equally important. It is hard for me to decide 
which one is the most important. I think that we need to, just 
what you have said, I think we need to continue to put emphasis 
on the quality of life over there in Germany and in Korea.
    And I will tell you, I have been pretty fortunate. I have 
served in Korea and Germany. I would like to tell you a short 
story. I was in Germany one time, and a soldier said, ``Hey, 
would you come and look at my building?'' And I said, ``Why?'' 
He said, ``You know, every night I get rained on.'' Now, this 
has been a while ago. But he said, ``Every night I get rained 
on.'' I said, ``I can't believe that.'' So I said, ``Show me.'' 
So I went to his third story and looked up, and there was 
actually a hole in his building. Of course we got it fixed.
    But that is the kind of thing sometimes, I think, we lose 
sight about, our base operations money that we need for quality 
of life for our soldiers. And when you think about that, here 
are people who are out by themselves. Their families are left 
alone when they are deployed, and that is a big deal.
    I also deployed to Bosnia for a year. And I was very 
fortunate. I was a division sergeant major, so, I am sure my 
wife was taken care of. She knew what to do. But for our 
younger soldiers in the military, it is tough on them. It is 
tough on the quality of life. Itis just a little tougher. I 
mean, it is a lot tougher.
    So I tell you, we need to continue to focus on Korea and 
Germany. And probably one other thing I would ask you to look 
at, too. I also had the privilege of working the U.S. Central 
Command. I worked there for about two and a half years, and I 
think we do not need to forget about some of these bases, our 
embassies in places like Egypt and the Sinai, and all of those 
places, quality of life for soldiers. We need to make sure we 
stay focused on that, so I hope that answers your question.
    Mr. Edwards. Thank you, it does. Thank you.
    Mr. Hobson. So we do not miss the vote, I think we will 
recess and then come right back. And we will start back up 
again, if you gentlemen do not mind.
    We will be back.
    We will be in recess.
    [Recess.]
    Mr. Hobson. We will get started here. And if we have 
another vote, what we are going to do is send one of us over to 
vote and keep going, and then one will come back, and we can 
keep going that way. There may be some activity on the floor. 
It is part of the job.
    Chet, why don't you start up, if you have another one that 
you wanted? You were not quite finished with your time.
    Mr. Edwards. If I could just finish with the one question 
and allow the others, Sergeant Major Tilley, to answer that, 
the rest of you, just in terms of overseas, where are the most 
serious problems in terms of the quality of overseas housing 
for your personnel.
    Master Chief Petty Officer Herdt. I think we are doing 
pretty well with overseas housing, not that we do not need to 
keep working on it. But if I were to vote anywhere, I would say 
some of the worst that I have seen, from a space habitability 
point of view, is probably Korea. Our folks just do not have 
much room over there at all. They cannot take very much of 
their belongings with them. That would probably be the most 
immediate need, from my perspective.
    Mr. Hobson. It is an unaccompanied tour, isn't it?
    Master Chief Petty Officer Herdt. No, sir.
    Mr. Hobson. No?
    Sergeant Major Tilley. You can have command-sponsored and 
unaccompanied tours.
    Master Chief Petty Officer Herdt. Yes, there is a 
combination.
    Sergeant Major McMichael. Our most quality of life overseas 
is in Okinawa, Japan, where we have most of our marines 
deployed. And, in essence, that is our best housing that we 
have in the whole Marine Corps right now, so that is where we 
have our geographic location.
    Mr. Edwards. Where is the worst?
    Sergeant Major McMichael. Actually, ours would be more in 
Korea as well, but we do not have a big population there.
    Chief Master Sergeant Finch. I would say, surprisingly, if 
I go to Germany, I could give you single dormitories that are 
over there that would probably be what I consider some of the 
best in the Air Force. I can also take you to another place in 
Germany and tell you that it is the absolute worst. It is kind 
of like with Sergeant Major of the Army Tilley. So you can 
actually see both ends.
    But if I had to pick a place, I would say, yes, both Korea 
and in Europe, in Germany, are two areas to focus on, because 
they just do not get the support that we get in the CONUS.
    Mr. Edwards. Well, thank you for your answers.
    Again, I commend the chairman for his personal leadership 
in encouraging this commitment and Congress to look at these 
overseas installations that do need support, and that do not 
have a big political base for lobbying back home.
    Chief Master Sergeant Finch. I certainly encourage you to 
go over and see, and to see our troops overseas.
    Master Chief Petty Officer Herdt. Sir, if I could just take 
my nickel back for just a minute, there is one other area that 
popped into my head that we are working on right now, and that 
is St. Mawgan, England.
    Mr. Hobson. Where is that in England?
    Master Chief Petty Officer Herdt. It is out right at Land's 
End, right out on the tip in England, and we have an agreement 
there with the British, and we are trying to work that, to 
improve that housing.
    Mr. Edwards. So as Sergeant Major Tilley said some of these 
small locations that are not as visible to Congress might 
deserve some attention.
    Thank you, Mr. Chairman.
    Mr. Hobson. We fixed the general's house at Osan. 
[Laughter.]
    That is just an inside joke. [Laughter.]
    Chief Master Sergeant Finch. Got it, sir.
    Mr. Edwards. He was smiling, too.
    Mr. Hobson. Do you have anything you want to add?

                               Retention

    Mr. Farr. Well, thank you very much, Mr. Chairman.
    I apologize for not hearing all the testimony. I was in an 
Agriculture appropriations meeting. We seem to be meeting at 
the same time.
    But I want to ask a question that has been permeating my 
thinking since I have been on this committee, and I really 
appreciate the fact that we have all the sergeants and the 
petty officer here, along with officers, to listen to this 
question.
    We are in an all-voluntary military now. And what I have 
learned is, when we train people, we train them really well. We 
train them so well that, once they get that training, they are 
in great demand in the private sector. And where we have our 
bases around are pretty, in most cases, are pretty nice places 
to live.
    It seems to me that this committee, with its jurisdiction 
over military real estate all over the world, that if we could 
begin changing the way in which we construct, build housing for 
the military and military communities, that we could have not 
only improved morale and quality of life issues, but even 
greater retention.
    And the thought is this, and then I would like you to 
reflect on it: I would say, the federal government owns this 
real estate. We do not have to go out and buy it. Because it is 
Federal Government, it is exempt from zoning, it is exempt from 
building codes. Some of the reasons the problems are there is 
because of these exemptions.
    But if you turn that around and say, okay, we are going to 
bring in the best minds in the world to design and build the 
most livable communities, the family-oriented communities, with 
all the best known transportation facilities, health care 
facilities, recreational facilities, park facilities, school 
facilities, I mean the ideal community that would be the envy 
of anyone, because I think we can do that on the dime, what do 
you think that would dowhen you get to the point--you have 
talked to a lot of your colleagues when they are deciding, ``Well, I am 
going to leave the military because I got a terrific job offer.''
    That may be a great salary offer, but people did not go 
into the military for salary. We did not go into politics for 
salary. It is about public service.
    But if you are given that choice then of saying, ``Okay, I 
may get a better job, but I could never find a house that is 
this nice, I could never find the recreational facilities that 
are this nice,'' it become a real career decision.
    Do you think that we could be building communities that 
would be so attractive that people would be then really 
motivated to stay in the military rather than leaving? I would 
like just your thoughts on that.
    Sergeant Major Tilley. Sir, I think right now you are 
talking about privatization for us. I think that is the concept 
and the idea that we have in the United States Army about 
building communities. In fact, we have got some great plans, 
down in the Fort Hood area, down in Fort Meade and Fort Lewis, 
that they are developing communities, that they are taking 
everything that you just said and they are trying to make sure 
that it is set up correctly. It is more of a community or an 
atmosphere like you are talking about for our soldiers.
    Mr. Farr. Do you think that is going to help retention?
    Sergeant Major Tilley. I think that it is not the only 
thing, but I think that is one of the things that will help 
retention. I think if your families are happy and your housing 
is adequate and your children are being take care of with the 
schools, and just a lot of stuff like that, absolutely, I think 
it will help.
    But you have to encompass all of that stuff. And when you 
talk about retention in the military, you cannot talk about one 
thing that makes a soldier dedicated to staying in the 
military. You have to talk about everything. You have to talk 
about retirement. You have to talk about pay. You have to talk 
about where he or she works in the military.
    So I think absolutely. I think you are right on target, 
sir. I think that is one step, but I think we cannot forget 
about all of the other pieces of the pie.
    Mr. Farr. Well, I am convinced we have got to break a lot 
of rice bowls before we can really get to building those 
communities with federal money. I think we need to look at it 
differently.
    Sergeant Major Tilley. Yes, sir. Can I add just one more 
thing to that?
    Mr. Farr. Please do.
    Sergeant Major Tilley. I would also ask you, don't forget 
about schooling. You know, it is DOD, but I think schooling is 
such a critical----
    Mr. Farr. The DOD school.
    Sergeant Major Tilley. Yes, sir, the DOD school. That is 
such a critical part of the education system for our young 
children in the military.
    Mr. Farr. Do you think it would help recruitment, too? Or 
is that too esoteric?
    Sergeant Major Tilley. Well, you know, a lot of young 
soldiers that come into the military, guess what, their fathers 
were in the military. And so they have been in that type of 
community all of their life, and they have been associated with 
it at a very young age. So they are going to come into the 
military, absolutely.
    But I tell you, it is just not one thing. When you are 
talking about developing things for family members in the 
military, you have got to look at everything. You try to sort 
of juggle all of those things at one time.
    Master Chief Petty Officer Herdt. Sir, if I might, I agree, 
essentially, with the Sergeant Major of the Army in that it 
certainly would not hurt. And certainly you cannot build 
substandard communities and achieve anything. So if you have 
any hope of gaining some retention value out of putting money 
into this, it needs to be high quality and high-quality 
communities.
    I could not agree more with the education piece of this 
also. Increasingly, the moving business, moving around our 
services or our locations, is becoming more problematic for us. 
And a big element of that is getting kids in schools and 
keeping them in quality schools and not moving them.
    I would tell you, however, I take just a little different 
perspective on your words concerning money, okay, because I 
think it is something that is increasingly not well-understood. 
This is not about getting rich. This is not about becoming 
wealthy. It is about a life of service.
    But the time and the commitment that you can dedicate to a 
life of service varies greatly with the compensation level you 
receive. When you are compensated close to Maslow's lowest 
level of needs, it is hard to get your mind off of 
compensation.
    And while we may not enter to get rich or for the money, it 
is my humble opinion that, increasingly, people stay because of 
the money. And that is what we are seeing with these highly 
skilled, highly trained folks.
    And it is not all about money with sailors in that, you 
know, there is the psychological income of mission, 
camaraderie, esprit de corps, large responsibilities at early 
age and all of that. But, increasingly, that sailor is married, 
and when they walk in the door at night, the spouse, the 
family, they do not get a lot of the psychological income, so 
for them it is compensation, pure and simple.
    And it does not equate to a quality of life. It more 
closely equates to a standard of living. And our sailors today, 
particularly as they reach the mid-grades and the upper grades, 
they are increasingly looking at their earnings potential. And 
they would love to continue to live a life of service, but they 
balance that now against families, and they balance it against 
their ability to provide for those families.
    Mr. Farr. Well, my premise of this is that we will never be 
able to stay competitive with the private sector, particularly 
in the dot-com world in California.
    Master Chief Petty Officer Herdt. I understand, sir.
    Mr. Farr. But I think we can stay competitive with the 
private sector, the civilian sector, on the quality of life 
that we can provide. The totality, when we reach a certain 
stage in life where it is not so much the income, it is how you 
live, it is the quality of life. And you could be offered a 
great salary, but it is going to reduce that sort of style of 
life to which you have become accustomed. And you are going to 
reject it, and you know people have done that. You have 
probably done it.
    So I just think that I look at the housing up here, and 
Ilook at our military bases, and I just think we could do a heck of a 
lot better job. We ought to be the envy of the world, the envy of the 
United States, that the best and most beautiful housing, the most 
beautiful communities to live in ought to be in our military bases, 
because we can do that because we have the totality of the 
decisionmaking.
    Mr. Hobson. We are getting new pictures, Sam. [Laughter.]
    Master Chief Petty Officer Herdt. I would agree with you, 
sir, but, as I said, less than 50 percent of our folks live in 
our housing. They are on the economy. They live in the 
communities--and the ability to do that.

                             FAMILY HOUSING

    Mr. Hobson. You might explain also, why there is a 
difference in the services in how their people live and where 
they live. The Navy, for example, is much more less base-
orientated in their housing than, say, the Army, in how they do 
it. The Army tends to have most of their people, I think, in 
most of the places I have been, inside the line. Air Force----
    Chief Master Sergeant Finch. Less than half.
    Mr. Hobson. Yes, less than half.
    And actually, in the privatization that the Air Force is 
doing, the four-star, the big four-star, wants them severable 
so they can be off. And I think that is a general rule now, 
pretty much.
    So there is a difference in culture and how different 
people look at things within the services. The RCI, though, 
initially was going to do even more than I think they are 
winding up doing now.
    Sergeant Major Tilley. If I could add just one thing, out 
at Fort Carson, a three bedroom for a soldier is about 2,300 
square feet, I believe it is. And for a four bedroom, it is 
about 2,600 square feet.
    And I want to add one more thing. If we create great family 
housing for soldiers on an installation, and remember, I said 
you have got to tie everything together, well, guess what? When 
you finish that 20 years and you get out of the service and you 
are used to living accustomed to like that, so here you go 
again, you are sort of starting again. And that is all in 
preparation to get out of the military. I mean, that is a big 
thing. That is a big thing for a lot of young soldiers.
    Mr. Hobson. Did you want to say something?
    Sergeant Major McMichael. Yes, actually, I would.
    Mr. Hobson. Sergeant Major.
    Sergeant Major McMichael. Well, the answer to your initial 
question is yes. And I say that, sir, because modernization is 
the whole focus that we should look at today.
    And I, too, have a dream that I would love to see housing 
for the quality of life for our servicemembers, especially the 
United States Marines, to be second to none. But if we do that 
without bringing all the other pieces of modernization up with 
it--health care, education and those type of things, 
commissaries and exchanges--that will build a community that I 
would love to see grow at a balanced, equal pace.
    At the same risk of raising that level of modernization, we 
still have to focus on pay, because if we get them to live at a 
level that you and I seem to be on the same accord of our dream 
here, when they walk out and have to return to what we call 
retirement pay, then what will they go to after that many years 
of service to their country? So that is why I say modernization 
has to be more than just in the housing, but in all avenues of 
quality of life for our servicemembers.
    Chief Master Sergeant Finch. I will just add a couple of 
comments to that for us. Certainly, our members can deploy, and 
they are willing to sacrifice lots of different things, and 
they do. I do not think that we have to force them to make 
their families sacrifice. And housing certainly is a very big 
piece of that, and the standard of housing is important.
    In the Air Force, the average housing right now is 36 years 
old. I mean, we are talking in the mid-1960s as the standards. 
I lived in a house, personally, that was built in the 1930s. I 
mean, at some point in time, we need to upgrade these things, 
and that is a tough thing to do, and it is very expensive.
    But as the sergeant major of the Army said, you cannot do 
this in isolation. We certainly need to improve the standard of 
living for the families of our military members, who actually 
contribute an awful lot to our Nation, we have to raise that 
up, and housing is just but one piece of that.
    Mr. Hobson. I think Allen was next, then we will go to Kay. 
Allen was here earlier.

                            BUDGET BLUEPRINT

    Mr. Boyd. Thank you, Mr. Chairman. Mr. Chairman, Mr. Olver, 
first, I want to start by thanking both of you for the way that 
you conduct this committee. It makes this committee enjoyable 
to serve on, and it makes it very efficient in getting its work 
done. And as one of the younger members on this committee, I 
want to thank both of you.
    I want to associate myself with the remarks of Mr. Edwards 
from Texas earlier, his opening remarks, when he talked a 
little bit about how proud he was to be at the same table with 
you all. I wake up, my family and I wake up, most days we are 
very thankful and thank God for living in this country, the 
greatest one on Earth. And I think most of us know that it is 
people like you all who have dedicated your professional life, 
that part of your life that you are professionally productive, 
to that country and to make it what it is.
    And those of us that have served in the uniform, I think we 
also have a little different understanding of what sacrifices 
are made. So I do want to associate myself with the remarks of 
Mr. Edwards and thank you all for what you do.
    And I want to ask one brief question. As you all know, the 
President has not given us a budget yet, but he has given us a 
sketchy blueprint of what he would do. And in that blueprint, 
he really did not talk too much about the defense initiatives, 
because he said that he wanted Secretary Rumsfeld to conduct a 
strategy review, if you will, so he could better hammer out 
what those initiatives would be.
    And my question would be directed at Chief Master Sergeant 
Finch. I do that for two reasons. One is probably because of 
Tyndall Air Force Base.
    Chief Master Sergeant Finch. Okay.
    Mr. Boyd. But more importantly, having read your remarks, I 
noticed that you said in the introductory part that the 
President's budget for fiscal year 2002--and I assume you meant 
the blueprint, because he will present his budget on April 3, I 
understand, Mr. Chairman--includes funding to cover our most 
pressing priorities.
    Would you explain, in light of the fact that, really, he 
has not addressed defense much in his initiatives and 
additional money, and I know he has got a pot of money setaside 
that is about $1 trillion, that he says that he will use part of that 
for his defense initiatives, but would you address or elaborate on that 
statement that his budget includes funding to cover our most pressing 
priorities?
    Chief Master Sergeant Finch. I understand that, you know, 
there is a blueprint right now, certainly, that focuses on 
fiscal year 2002, and that we have been asked to kind of hold 
off until the strategy is done to figure out what exactly we 
are going to do. But there has still been a commitment to take 
care of people, and there has been a commitment to take care of 
compensation. And the issues for us are still basically the 
same. Our quality of life (QOL) priorities within the Air Force 
still include compensation, kind of tempo issues for us, 
housing, health care. I mean, those are still the same issues 
that we have.
    Mr. Boyd. If I might follow up, Mr. Chairman, very briefly?
    So you are really speaking to the issues that are under you 
purview, and that is the soldiers'----
    Chief Master Sergeant Finch. Absolutely.
    Mr. Boyd [continuing]. Well-being and training and those 
kinds of issues.
    By that, I assume that you feel we have been doing a fairly 
good job, and whatever additional dollars we have might relate 
to systems, defense systems, weapons, those kinds of things.
    Chief Master Sergeant Finch. No, I wouldn't. I would be 
outside of my scope to be able to state that, sir. We are 
taking care of the people. The issues that I am focused on, 
really, in the Air Force are those things that would take care 
of the people aspects and are quality of life priorities for 
them. And I think, collectively, I thank Congress and the 
administration for the past contributions. We have had to try 
and make improvements in that. We still have a ways to go.
    Mr. Boyd. Thank you very much.
    Chief Master Sergeant Finch. Yes, sir.
    Mr. Boyd. And again, let me thank all of you for your 
service.
    Thank you, Mr. Chairman.
    Mr. Hobson. Ms. Granger from Texas.

                        Family Housing Standards

    Ms. Granger. Thank you. I apologize for being late. I have 
another committee meeting at the same time. I know we are all 
going through the same thing.
    And first of all, I want to thank you for your service. I 
know I speak for everyone in this room. And we are greatly 
appreciative of the job that you do.
    And I say, I am sorry I was late and missed some of your 
statements, and so I do not have a question as much as I have 
just a remark. I do not have a military background. My first 
real experience was when I served as mayor of Fort Worth and we 
had an Air Force base, Carswell, and they announced closure of 
that a month after I took office as mayor.
    And in that whole process of closure and taking over that, 
deciding what could be done, the first thing we dealt with was 
the housing. And I was literally stunned at what we were 
offering our men and women in the military. We actually could 
not give away that housing, you know. It was offered and there 
was not even a nonprofit that would take it because it was so 
substandard. And then it sat there literally for years.
    But that was really an eye-opening experience for me. And I 
see that in traveling with this committee, and I am so glad to 
be on this committee. It is a great interest of mine. And we 
travel and see sometimes the same thing.
    I am very pleased when I see, for instance, new housing or 
new, not housing, but what we are doing with our soldiers, for 
instance, in Bosnia, or when we are there for a short time, how 
quickly we move in. But when it is a permanent situation, I am 
still disappointed in what we are doing with housing.
    But one thing that did surprise me on a trip we took, I 
guess, last year with this committee, is some of the new 
housing. When we put housing in to house families, I was 
disappointed in the design. I have a little experience with 
development, and I saw housing, a design, that is not being 
used in communities.
    For instance, if we are providing family housing, we would 
have tiny, tiny yards, barely large enough to put a swing set, 
rather than to group the housing, what you would do in a 
subdivision, and have a large open space for children and for 
families and things like that.
    So I do not know what we are doing with that, but I would 
certainly, certainly encourage us to do outside contracting, 
and really use the same sort of design we use for development, 
because we are competitive, we are trying to be competitive, 
and offer, of course, a career in the military. And it is very 
hard to compete when we have quality of life issues that we do 
not address that way.
    Mr. Farr. Would the gentlelady yield?
    I totally agree with that comment. I think what we are 
missing is that, as you remember as mayor, in this case we own 
the entire decision, because we own the property. The Federal 
Government is exempt from those local zoning and issues, which 
can drive up cost.
    Ms. Granger. Right.
    Mr. Farr. So what happens is, we have been building houses 
below local standard code. And what we ought to be thinking is 
about how to use all the technology that we have learned in 
housing, how to use that as almost experimental for military 
bases so that we could design the best instead of the least. 
And I think that is what is broken somewhere in the system. 
There is no reason we cannot fix it internally.
    Ms. Granger. I couldn't agree more.
    Mr. Hobson. That is being fixed. We are not building 
anything new that does not meet community standards. And I 
think the designs, when we get the new pictures, you will see 
the designs are better than the stuff we have been doing in the 
last two years. There has been a dramatic change, I think, in 
the approach.
    And when we go out to Texas, we are going to look at a new 
Air Force project at Lackland that I think they are very proud 
of and is built to community standards.
    Sam's got, in his district, abandoned housing.
    How many are there, Sam, now?
    Mr. Farr. Two thousand.
    Mr. Hobson. Units that are not occupied. They are just 
sitting there. It is one of the most outrageous things I have 
ever seen. We have all this housing, we have all these people 
that need housing, and we have got this housing there that we 
just cannot occupy today. The base is closed and nobody will 
take it. We have the same problem you saw.
    Ms. Granger. Same thing.
    Mr. Farr. It is nice housing.
    Mr. Hobson. Yes.
    Mr. Farr. It just was not built to code.
    Mr. Hobson. And I kind of went nuts when I got out there, 
didn't I?
    But we are getting some of it done a little better, but 
they were just letting it go to nothing. It is a wonder it had 
not caught on fire or something. It is outrageous to waste that 
kind of money on it.
    I think the other thing that we might mention here is there 
is probably going to be some sort of an attempt someplace along 
the line on some sort of base closure.
    One of the other places we are going to look at is Brooks. 
And I do not want to alarm everybody that Brooks is going to 
close and all that stuff, but we are actually working on a 
project at Brooks that transfers much of the grounds so they 
can develop new jobs and facilities. The city can do that; at 
the same time, the Air Force will then maintain certain 
programs they are doing there, rather than waiting.
    I do not know if it will be BRACed or not, but if it was, 
then they could not get to ground fast enough to do the things. 
And there is always an upheaval with the troops that are there, 
there is an upheaval with the community, and we are trying to 
balance that out as we go.
    Robert Aderholt's here now.
    Do you have a short question? Then I am going to go to 
John.
    Mr. Aderholt. I want to shortly, thank you.
    Mr. Hobson. All right. Well, John, you are up. John gets 
longer than five minutes because he is the ranking member.
    Mr. Olver. Or it takes me longer to think through these 
things.

                           Bachelor Quarters

    I would like to go back, Sergeant McMichael, to your 
comments, because I am trying to puzzle through some of this, 
and I have been looking in the various testimony. You had given 
real demographics of what the Marine Corps looks like. You were 
the only one who spoke about privacy issues, and I have been 
trying to understand. My sense has been that each of the 
services was roughly 50-50 on singles and families and couples. 
And to the degree to which that is incorrect, I see a shaking 
of the head here. It might be well if the four of you got 
together with your sources and let us know what each of the 
services really does look like.
    And to go back to yours, Sergeant, you at one point say, in 
a parentheses, that approximately 50 percent of yours are 
single, and yet the numbers that you had actually given of 
about 170,000 total and 68,000 spouses suggest that there is 
considerably more than half that would be actually singles. I 
am not sure why the singles and the spouses together would not 
total 170,000 or thereabouts.
    You also gave the number of children and such. But it would 
be interesting for me to know really.
    There are other questions here. You have pointed out pretty 
clearly, how many are forward deployed. What does forward 
deployment mean? Just outside the country or off states, 
outside the 50 states, or outside the 50 states and 
territories? Just what do you mean by maybe forward deployment?
    Sergeant Major McMichael. Forward deployed can cover all of 
those areas, sir, and we do have Marines forward deployed in 
places of Okinawa, on board ships headed to other places. All 
of these deployments are UDP, what we call unit deployments, 
take our Marines away from their home where they are living 
with their families and their spouses and their children.
    Mr. Olver. So those deployments might actually be 
deployments within the 50 states or the territories?
    Sergeant Major McMichael. Yes.
    Mr. Olver. And still be away from where their primary base 
is? Okay.
    Is that what all of you would agree, as to what the meaning 
of forward deployment would be? All four services?
    It would be interesting to have, as a fingerprint for what 
the different services are, to know what those proportions are 
in a little bit better form than that.
    On the question of privacy, which you had brought up, is 
there a difference in the standards that the Marines use from 
the standard that the other services use? None of the others 
have raised the question of privacy, per se, at least in their 
oral testimony.
    Sergeant Major McMichael. Well, as you will see in the 
written testimony, in 1998, we got a waiver to be able to build 
our bachelor quarters by a 2x0 configuration. That actually was 
an increase because before we had, actually, more Marines 
living in barrack rooms together, sometimes three to four.
    Mr. Olver. More than the other services.
    Sergeant Major McMichael. So now we know that rather than 
go to the one member per room, it was more beneficial for us, 
and allowed us to get the inadequacy eliminated faster, by the 
14.9-year lifeline to meet more of the Department of the Navy's 
seven-year life cycle.
    Mr. Olver. So does that mean that your new ones are 2x0s? 
What does 2x0 mean?
    Sergeant Major McMichael. Two-by-zero simply means that we 
will have two Marines in a room using a bath.
    Mr. Olver. And do they have a kitchenette or something like 
that in that or with that room?
    Sergeant Major McMichael. All of the rooms are not totally 
built exactly the same. Some do have those types of amenities 
in them.
    Mr. Hobson. But that is different from service to service.
    Mr. Olver. So the newer ones, though, you are building at 
2x0?
    Sergeant Major McMichael. Yes, which is a waiver.
    Mr. Olver. I heard 2x0, and I heard you say 2x2, and those 
must be two different arrangements, or are those meant to be 
the same? What does 2x2 mean? Is that the same as 2x0?
    Sergeant Major McMichael. We have 2x0.
    Chief Master Sergeant Finch. Two-by-two was a standard 
where two people lived in a room and two rooms shared a 
bathroom. And a couple of years ago----
    Mr. Olver. Two lived in a room.
    Chief Master Sergeant Finch. Two people per room. Two rooms 
share a bath.
    Mr. Olver. Isn't that, then, the same, really, as what you 
are calling 2x0?
    Master Chief Petty Officer Herdt. Two-by-zero is where each 
room has a bathroom and two people share it.Two-plus-two is 
actually four people per bathroom. Two rooms, one bathroom between the 
two rooms.
    Mr. Olver. Oh, I see, and 2x0----
    Sergeant Major McMichael. Two in a room, sir, sharing a 
single bath.
    Mr. Hobson. But the standard is 1-plus-1.
    Mr. Olver. So the standard, all the new things that the 
other three services are building are 1-plus-1.
    Master Chief Petty Officer Herdt. One person per room; two 
rooms share a bath.
    Mr. Olver. Okay. So, in essence, yours must have been in 
worse condition on the privacy issue. But even when you get 
done, since you are building the 2x0s, you are going to have a 
poorer condition on privacy than the other services, as they 
are modernizing with the 1x1 arrangement?
    Sergeant Major McMichael. No, I disagree. The privacy in 
that respect was not the issue. The privacy was more of an 
issue when we had more people in the room. It has more amenity 
to us to have two Marines per room, sharing a single head, than 
to have four people in the room.
    Mr. Olver. Well, that is better from what you did have. But 
the other services seem to be building at the level--you got a 
waiver to do that. Would you otherwise have had to do 1x1? Is 
that a standard?
    Sergeant Major McMichael. Yes, that would have been the 
standard.
    Mr. Olver. That would have been the standard?
    Sergeant Major McMichael. That was the standard, yes.
    Mr. Olver. The others are going 1x1, so each person has a 
single room with a bath; each person has his or her own room 
with a bath. You are still doing two persons in that room with 
a bath.
    Sergeant Major McMichael. That is correct.
    Mr. Olver. That has to be poorer on privacy than what the 
others are doing. Your newest housing has to still be poorer on 
privacy than what the others are doing about privacy, even 
though you got a waiver to do that because you were at even 
worse, 2x2s.
    Sergeant Major McMichael. And in some respect, that is 
partially true. But when you look at the 2x0, it allows us to 
continue our cohesion. It allows the camaraderie and the 
teamwork. It also has shown a great improvement for the 
loneliness and the suicide attempts because we have the 
camaraderie between the two individuals that live together now 
and have more of a buddy-buddy----
    Mr. Olver. Well, let me then ask, what portion of the other 
services, if you have any close idea of it, are still in less-
private arrangements than the 1x1 new standard? There must be a 
fair number of your people who are in 2x2s or 2x0s or some 
other arrangement that was the older, before the present 
standard? Do you still have folk in these other arrangements?
    Sergeant Major Tilley. Yes, sir. I am not sure what the 
percentage is.
    Mr. Olver. Do you have people in the other arrangement?
    Chief Master Sergeant Finch. Sir, we are building to the 1-
plus-1. We are making good progress toward that and renovating 
to it also.
    Mr. Olver. You are building, but what about the----
    Chief Master Sergeant Finch. I do not have the exact 
figures you are asking for, but I would be happy to provide 
those.
    Mr. Olver. If the services want to provide them and we 
could compile them together, it would be, I suspect, rather 
interesting for us as base, ground understanding of this 
housing issue.
    Do you have any idea of what proportion is beneath 
standard, the 1x1?
    Chief Master Sergeant Finch. We are building to a 1-plus-1 
standard, which is the new one as we continue on, but we still 
have a shortage of rooms. My understanding is that about 83 
percent of the dorm rooms that we have right now are not 1-
plus-1.
    Mr. Olver. Are not 1x1?
    Chief Master Sergeant Finch. Right. They are not----
    Mr. Olver. He mentioned privacy as an issue, as you could 
have, I suppose.
    Chief Master Sergeant Finch. Actually, privacy has been a 
big issue for airmen. I will speak to that piece of it. In 
addition to building to the 1-plus-1, though, we have also 
changed some assignment policies, where we have taken some of 
the larger rooms, which were designed for two people, and tried 
to move into single occupancy for that, internally, to try to 
move all of that in the same time. And so privacy has been the 
number one issue for our young, single airmen, and we have 
tried to tackle that.
    But, again, 1-plus-1 is a design standard that you build 
new dormitories to.
    Master Chief Petty Officer Herdt. Sir, I would just, 
addressing the privacy issue, I would tell you that being in a 
service that routinely lives closer together for longer periods 
of time than most, aboard our ships, in large berthing 
compartments and so forth, privacy is a treasured commodity.
    Mr. Hobson. And submarines.
    Master Chief Petty Officer Herdt. I have lived on 
submarines.
    But I would ask you not to take--it is a mission in our 
statement--as any kind of an indicator that it is not a major 
concern. It continues to be a major concern. We are making 
progress toward accomplishing it. Otherwise, we would not be 
going to the 1-plus-1 standard. It is one of the things that 
really drives us to the 1-plus-1. Everybody needs some space.
    Mr. Olver. Well, for the singles, it would be very helpful 
to me if I could find out how many of your housing units are at 
what standards, because we are obviously improving the 
standards somewhere along the way. For instance, Sergeant Finch 
has said that the--I think I heard you correctly--that 86 
percent are at lesser standards than the 1x1, the 1-plus-1, 
which is now standard.
    Chief Master Sergeant Finch. Which is the new standard.
    Mr. Olver. Which is what we believe we would like to 
achieve.
    Chief Master Sergeant Finch. We did not start building to 
that until about 1997. It was a policy approved during 
Secretary Perry's tenure as the secretary of defense.
    Master Chief Petty Officer Herdt. We would be honored to 
provide you that data.
    [The information follows:]

                    Army Housing Units and Standards

    When construction is complete for barracks funded as of fiscal year 
(FY) 2001 and prior years, about 32 percent of soldiers will be still 
be housed in quarters not meeting the Department of Defense 1+1 
standard. The Army has 138,300 permanent party soldiers eligible for 
barracks, of whom about 3,200 are adequately housed off-post in the 
United States. That leaves a net barracks requirement to house 135,100 
soldiers.
    Barracks housing 80,700 soldiers have been funded through FY 2001 
at the 1+1 or equivalent standard. ``Equivalent standard'' refers to 
1970s and older barracks that have been upgraded with Military 
Construction or Real Property Maintenance funds to an approximate 1+1 
standard. It also includes projects that preceded the DoD 1+1 standard, 
funded in the mid-1990s, which contain most of the features of 1+1. 
Moreover, it also includes modified 2+2 barracks in Korea. These 
equivalent standard types typically have semi-private rooms with a two-
person bathroom, and contain most features of the 1+1 barracks 
standard.
    Some of our soldiers are housed in 2+2 barracks constructed from 
the mid-1980s to the mid-1990s. These consist of two two-person rooms 
connected by a shared bathroom. The Army will not upgrade these 
barracks in the current program, but will consider them adequate when 
assigned at one soldier per room. When additional barracks are 
constructed so these facilities can be assigned at one soldier per 
room, these will house 10,400 soldiers. Because room assignments are 
administered locally, the Army staff does not maintain records on the 
number of soldiers currently living at the two-person per room or one-
person per room standard.
    That leaves 44,000 permanent party soldiers living in barracks not 
yet funded for renewal by the end of FY 2001. The Army has planned and 
programmed complete funding by FY 2008 of new or upgraded barracks for 
these soldiers.

                         Army Demographic Data

    The Defense Manpower Data Center indicates that, as of September 
2000, there are 479,026 soldiers in the Army. There are 4,089 cadets at 
the United States Military Academy, 713,744 Army family members, 
251,239 Army spouses, 459,947 minor dependents, and 3,558 adult 
dependents.

    Mr. Olver. We would really like to know how many singles, 
how many family members. Sergeant McMichael has given the total 
number of family members at about 170,000 or 160,000 or so of 
family members, almost 60,000 spouses and around 100,000 
children. I would like to know whether there is a difference 
among the services that shows up on the kind of demographics, 
family demographics.
    I will pass because it takes me a long time to get these, 
and I will come back.
    Mr. Hobson. I think Mr. Edwards is up next, then Mr. 
Vitter, Mr. Farr and Ms. Granger.

                               Retention

    Mr. Edwards. You have all mentioned, we have to look at the 
whole picture when we talk about quality of life, and that 
makes sense. But one of my questions is, as service men and 
women leave the armed services, do we give them a questionnaire 
to fill out and say, ``Rank number one through five or one 
through 10 why you are leaving.'' Is that done on a regular, 
disciplined basis?
    Master Chief Petty Officer Herdt. I would tell you, sir, 
speaking for the Navy, that we have done that as a routine 
matter, trying to get the priority ranking of what causes them 
to stay, what causes them to leave.
    Actually, we are finding out what causes them to leave. 
This is really the only group of people that we have surveyed, 
other than our annual quality of life survey.
    We have recently embarked upon a new program called ARGUS. 
This will take this kind of survey data at various points 
throughout a career, reenlistment, transfer, retirement, 
separation, a number of advancement and promotion points. It is 
a Web-based tool that we are going to be using now to give us 
far better data that we can drill down into, ask better 
questions than what we have done in the past. And I think, when 
my successors come before you, come before this committee, they 
are going to be able to answer questions of much greater 
detail.
    But I would tell you, what we know now, as people are 
walking out the door, there is a list that is relatively small 
of dissatisfiers that caused them to leave. Pay is one of 
those. Quality of life along with leadership is on there at 
times, the sacrifices and so forth. We can provide the most 
recent of those for you, if you would find that helpful.
    Mr. Edwards. If you could provide that to the chairman, I 
would appreciate that very much. And if others of you could 
check to see if your services have the same sort of thing, it 
would be interesting as part of our job is not only dividing 
the small piece of pie we have of the total Federal budget, but 
to try to be advocates for enlarging the size of the pie 
committed to improving quality housing. And if we could get 
some of that information, it might help us in talking to our 
colleagues about the need for additional funding in this area 
of housing and quality of life questions.
    [The information follows:]

    The Army does not conduct individual exit surveys. To track trends 
in attrition, the Army uses a semi-annual Sample Survey of Military 
Personnel (SSMP) to collect data on why soldiers leave before 
retirement.
    For officers, the Fall 2000 SSMP identified family separation, work 
enjoyment, amount of basic pay, and overall quality life as the four 
most important reasons to think about leaving the Army before 
retirement.
    For enlisted personnel, the survey identified the amount of basic 
pay, family separation, and the overall quality of life as the top 
three reasons to think about leaving the Army before retirement. These 
reasons have not changed for officers since 1997 and for enlisted 
personnel since 1996.
    The Air Force does survey its members who are leaving. The most 
recent Air Force ``exit'' survey was in Sep 000 from individuals with a 
date of separation between 1 Oct 00 and 30 Sep 01. The top 10 reasons 
identified for leaving (and percentage selecting each reason) are 
listed below for officers and enlisted personnel. The report, which 
includes a 10-year retention perspective and more detail (analyses by 
grade group), is available at http://www.afpc.randolph.af.mil/surveys.

------------------------------------------------------------------------
                 Officers                             Enlisted
------------------------------------------------------------------------
(1) Availability of comparable civilian     Availability of comparable
 jobs.                                       civilian (59%).
(2) Choice of job assignment (57%)........  Pay and allowances (57%).
(3) Say in base of assignment (51%).......  Recognition of one's efforts
                                             (42%).
(4) Amount of additional duties (38%).....  Leadership at unit level
                                             (38%).
(5) Overall job satisfaction (35%)........  Overall job satisfaction
                                             (38%).
(6) Home station TEMPO (32%)..............  Choice of job assignment
                                             (32%).
(7) Number of PCS moves (32%).............  Say in base of assignment
                                             (28%).
(8) TEMPO away (32%)......................  Promotion opportunity (27%).
(9) Leadership at wing or equivalent (31%)  Geographical area/current
                                             base (25%).
(10) Recognition of your effort (29%).....  Amount of additional duties
                                             (24%).
------------------------------------------------------------------------

    Sergeant Major Tilley. Can I just add something?
    We also do the annual surveys, but one of the things, when 
you reenlist a soldier into the Army, you reenlist a family, 
and so we put a great emphasis based on the family needs.
    And what we have asked a lot of our commanders to do is 
talk to those families and bring them in under reenlistment. If 
you are going to remain in the military, normally it is 
partially because of your spouse. I mean, it is a family kind 
of operation.
    So we do a lot of discussion with the families about what 
their needs are and what their concerns are. And that is where 
we get that information, as far as how we need to improve the 
quality of life for housing and things like that. So we are 
continually trying to get updated and find out exactly what 
their concerns are.
    Mr. Edwards. Okay, thank you very much.
    Mr. Chairman.
    Mr. Hobson. Mr. Vitter.
    Mr. Vitter. Thank you, Mr. Chairman.

                      Operational Tempo and Family

    I am very eager to work with the subcommittee and full 
committee on funding levels for these needs, like housing. I 
also wanted to ask you about other factors that may be 
significant factors with the quality of life that are not 
directly related to that funding issue, to get a sense of the 
whole picture.
    One is, I wanted each of your impressions about how 
significant a quality of life issue operational tempo and 
deployment schedules are, compared to things like housing 
andhealth care, other things we talk about.
    Second point is, there has been a major trend, as I 
understand it, over the last 20 or 30 years, for many more 
junior enlisted to be married than in a previous era. Has there 
been discussion of any possible policy change to discourage or, 
in some instances, prohibit that, because obviously that is 
much more expensive when you are talking about families versus 
singles for very junior enlisted slots? Is it practical to 
undergo a policy discussion about that, or has any of that gone 
on?
    Sergeant Major Tilley. First of all, the PERSTEMPO, sure 
that affects it. I mean, again, I can only talk about myself. I 
initially talked about, every day, we are in about 65 
locations, about 31,000 soldiers that are forward deployed, and 
that is out of their base that they live in.
    In fact, I need to tell you another story. I hate to tell 
you stories, but I talked to a soldier that was in Saudi Arabia 
with me. He had worked down at Fort Bliss, and he was leaning 
up against a chair. And I said, ``How are you doing?'' And he 
said, ``Well, I'm just a little bit upset.'' And I said, 
``Why?'' He said, ``I've been deployed to Saudi nine times.'' 
And we have only been out there 10 years.
    And every time he was deployed, that was six months, you 
know, six months of deployment. That sort of speaks for itself.
    But our commanders understand that, and they are trying to 
do everything they can to make it better, along with yourself. 
And I understand that, too.
    But deployment and the fact that you are deploying a lot, 
sometimes, I mean--in fact, one of the questions I normally get 
from soldiers, you know, ``Where is our next deployment going 
to be?'' And I would say, ``I don't know.'' I don't think 
anybody knows where something is going to pop up, so we are 
working hard.
    Mr. Hobson. Can I get that guy's----
    Sergeant Major Tilley. No, I am not going to tell. 
[Laughter.]
    And I think I understood your other question to be whether 
or not you should or should not be married when you come into 
the military. Is that what your question was?
    Mr. Vitter. And whether the military is or should undergo 
any policy discussions about that trend, which has obviously 
put on tremendous expense in terms of the quality of life 
issues.
    Sergeant Major Tilley. My personal opinion is no. I think 
that the way it is now okay. Fifty-five percent of our soldiers 
are married and 7 percent are single parents. I think the 
current policy is okay.
    But that is part of life. That is part of our economy. 
People are going to get married. And when they are married and 
they are in the military, it is a commitment to the United 
States Army----
    Mr. Hobson. But there is a change, and I think this is what 
he is talking about. The lower grades and the pay scales of the 
lower grades were not designed for people coming into the 
service being married and having children. And that is, when we 
read about people being on food stamps and some other things, 
part of that is that those lower grades were never--and we have 
to restructure some things and look at them because you do take 
people today that in past years the service either did not take 
or they did not sign up. And so there is a cultural difference, 
I think is what he is referring to. And somebody needs to look 
at that and figure out how you are going to handle that in an 
all-volunteer service.
    Sergeant Major Tilley. You know, the one thing that I have 
noticed here lately is that we have people coming into the 
military that are a little bit older, that are 28, 29, and that 
is not old. I think that is pretty young.
    Mr. Hobson. I think that is very young. [Laughter.]
    John and I think that is very young.
    Sergeant Major Tilley. But there are a lot of people that 
come into the military, maybe a little bit later than they 
probably planned to, and they are coming into the military with 
a couple of children. And they start out as a private and a PFC 
and sort of work their way up through the ranks, and there is 
frustration from that. And the military tries to do everything 
they can to try to compensate for that.
    Master Chief Petty Officer Herdt. Sir, if I might, I would 
tell you, from a tempo perspective, deployments in the Navy, we 
are just really happy that they are six months. They are no 
longer two years, like they were when we began our Navy. That 
is what deployments used to be. My point is, we have been doing 
deployments for a long time, so when sailors come into the 
Navy, that is part of the culture.
    The time at home is about the same, but what you are doing 
at home seems to be the issue now. About a third of our Navy is 
deployed at any given time. So if you put this in the rotation 
perspective, you have got about a third of it is over there, 
you have got about a third of it that is getting ready to go, 
and you have got about a third of it that just got back.
    And so the work load is a little bit different. The 
deployment tempo is about the same as it has been for us. So I 
would tell you, I do not hear a lot about that. I do not hear 
about the fact that I am going on deployment again. It is just 
built into our culture that that is what we do.
    Mr. Vitter. Is it fair to say that that is a much bigger 
Army, Marines, maybe, issue than Navy? I am not sure where the 
Air Force comes in.
    Master Chief Petty Officer Herdt. I would not deem to speak 
to how they view that. I will just tell you for Navy, 
deployments are us. That is the value of having a Navy, taking 
the flag to the four corners of the Earth.
    I would like to address this marriage thing, though. If you 
take this on as a policy issue, wear your steel skivvies, 
because this is emotional in many respects.
    We have more junior folks, E-3 and below, married today 
than we have had in the past. And I will pull the numbers for 
you. If memory serves me right--I looked at these just before I 
came over--I thought it was 11 percent. That may or may not be 
right.
    At the E-5 and above level, that jumps up to over 70 
percent. So increasingly, where more and more are married, the 
decision to stay in the Navy is not being made at the command. 
It is being made around the dinner table at night. And 51 
percent of the vote is at home, which adds some poignance to my 
comments earlier about pay.
    I worry a lot about junior-enlisted families because I do 
not, just from my view of this, I am not sure that we will ever 
be able to afford to put the kind of money in to take their 
concerns away. The base of that pyramid is so big, itsaps your 
ability to do anything else. And when you put money there and you do 
not build it on out, we lose the incentive for them to become us, which 
is where we are today, by the way.
    So the whole marriage thing is an issue. We are living with 
it. I do not see it as a big issue now. You start, you know, 
tinkering with it, it could become a larger issue.
    One of the ways we are going to begin addressing this, and 
I think my shipmate here in the Marines--the Marines have done 
this better than the rest of us in that. We are going to begin 
working a lot harder at financial education, making people more 
aware of just what the cost is to being married, not as a way 
of discouraging it, but ways to get people to make better-
informed decisions about it.
    Mr. Vitter. And beyond that, do you think it is practical 
or reasonable to consider any other policy changes?
    Master Chief Petty Officer Herdt. I am not sure that it 
would be, sir, to be honest with you.
    Mr. Hobson. Does anybody else want to comment on that? We 
need to move on.
    Sergeant Major Tilley. Sir, could I make just one comment 
real quickly. I got this part from the survey here: ``Close to 
half of the soldiers leaving the Army did so because of reasons 
pertaining to basic pay, well-being, quality of life and the 
amount of time separated from the family.''
    Mr. Hobson. Mr. Farr, then Ms. Granger, Mr. Aderholt, Mr. 
Dicks, will be our order. Then back to John.
    Sam.
    Mr. Farr. Thank you very much, Mr. Chairman.
    I totally agree. I think there is too much deployment, and 
I think it is probably Congress's fault. And I think it is our 
fault because we have not adequately funded the State 
Department, and we are calling upon the military to do missions 
that ought to be diplomatic missions rather than military 
missions.
    And I did not get that from the State Department. In fact, 
I got it from one of the members of the Joint Chiefs of Staff, 
so I think that if Congress would put a little bit more money 
into the State Department as well as into all of the issues we 
are discussing today, we might have less deployment.
    But let me just move to another area. As members of 
Congress, we are exposed to not just the military family, but 
to all of the other Federal family. And the message that we get 
here in Washington is that the world is envious of our military 
capability. They want us. If there is going to be military 
actions anywhere in the world--and that is why, I think, we are 
being deployed too much--it is because everybody else from any 
other country says, ``We won't go unless the U.S. is there.''
    And why do they want us there? Because we are the best-
trained. We come with the best models of collaboration. And 
despite all of our equipment problems, we still, in many cases, 
are better-equipped.
    So we go from this kind of superlative to turning around 
and looking at our bases and where we house people, and we have 
seemed to have accepted the lowest common standard here. And 
the problem I have is, it comes out of the same Department of 
Defense. How can you be the best in the world on one thing and 
sort of the worst in the world in being able to provide this 
support?

                             PRIVATIZATION

    The chairman is wonderful because he is stimulating a lot 
of thinking in this committee, and he is asking a lot of 
questions. For example, on the BAH, here are a couple questions 
I have. The first is on housing.
    The National Park Service, on Federal land, goes into 
private sector and says, ``Build concessions here, and build 
them to these quality standards so that the park will look 
nice.'' HUD, in their new housing, not the old stuff that you 
see around this city so often, but HUD has really gotten into 
some really innovative housing. When it comes to highways, the 
Federal Government builds the best highways in the world.
    The question here, I guess, do you ever pull in people from 
other Federal agencies that are involved in this, and ask them 
how they build their housing, and how they provide services to 
other Federal employees that are not necessarily in the 
military? Or is it all kept just in the military family?
    Second, have you ever thought about taking the BAH and its 
concept, ``It's always not enough,'' because it is not enough 
if you have to go out and live in the community, and it will 
never be enough in the community that I live in. I cannot even 
afford to live in the house that I live in.
    So trying to think outside the box, what if we took that 
BAH and went and took it onto Federal land and went to a 
developer and said, ``Look, you build housing here, and we will 
fill it, 100 percent, and we are not going to pay you anymore 
than the BAH. But guess what? You get 100 percent occupancy 
immediately, you get all of your payments made electronically, 
and if you have any troubles, we will just call the admiral or 
the general, and you will just be guaranteed quality tenants.'' 
I mean, the private sector does not have that at all.
    So I guess what I would like to see is if there is--and I 
know this isn't your responsibility--but do you find within the 
Department of Defense a willingness to think outside of the box 
to try to solve some of these problems?
    Sergeant Major Tilley. First of all, sir, I think we are 
doing that with the privatization. We are allowing people to 
come in, and we are thinking out of the box. We are increasing 
the quality of life. We are doing those things that we need to 
do, and I think that is going to come about with privatization, 
because I have seen a little bit and I am getting ready to go 
look at a lot more. But what you are asking right now is 
exactly what we are going to do.
    And we are also going to do the part with the BAH, give it 
to the contractor. It is going to fund that set of quarters for 
them, so there should not be any additional costs for the 
soldiers.
    Mr. Farr. And we do not have to put up any Federal money to 
do that?
    Sergeant Major Tilley. Sir, I tell you what, I am not sure 
I can answer. I am sure there are some monies that go along 
with that as far as getting them to do the project or whatever.
    Mr. Hobson. We are going to have some hearings where people 
can know how we are doing this, but there are ways. They have 
to buy the project down because the BAH is not quite enough in 
some areas. In some areas they do not. It will vary. 
California, it will be big time.
    Mr. Farr. What I am trying to get at here, and maybe it is 
too esoteric, is, how can we be the best in the world on being 
in the field and less than our national standardsat home?
    Chief Master Sergeant Finch. I do not think it is that we 
want to do that. In our case, we have 110,000 houses; 65,000 of 
them need to be replaced. And there is just not enough money 
for us to be able to do that in the budget, to be able to fix 
all of those houses to some new standard. So we are trying to 
find a way----
    Mr. Farr. In the traditional way that we have fixed them.
    Chief Master Sergeant Finch. In the traditional way. So we 
look to privatize in addition to using military construction 
dollars, to try to find a way to make the housing--and 
hopefully build the houses that we do build, build them to 
current standards as opposed to some, where we always seem to 
lag behind in past years.
    Mr. Hobson. Well, another part of that, Sam, is that MILCON 
has been a bill payer for other programs in the last few years. 
This bill has gone down from--Norm, you probably know better 
than anybody--what, $12 billion, $14 billion over 10 or 12 
years ago. And it has been a bill payer, and we are hoping that 
that is going to change, that our money is not going to get 
stripped away.
    And that leads me to a comment I am going to make. I hope 
that no service comes forth with a zero request for MILCON 
Continental United States (CONUS) construction for housing, 
because I think, with the discussion you have heard today, this 
committee and this Congress would be outraged if we have all of 
this talk about how much we care about these people.
    Two years ago, when I took over this committee, one 
service--and I am not going to get, you can look it up--came 
forth with no new housing in the continental United States out 
of its budget to be built. And we cannot rely--it is a false 
thought to think that we can rely totally on privatization to 
solve our problem.
    And there are places where privatization won't work; the 
numbers won't work. And I think probably the collective wisdom 
of this committee would be that we should not totally rely upon 
one program as we go forward.
    So I know there are people sitting back there taking notes, 
and it is not necessarily your bailiwick, but it is because you 
have to fight for these people just as we have to fight for 
these people. And after all you have said, for somebody to come 
forth in their budget and not include that, I think is 
outrageous, to be frank with you.
    So I am hoping that nobody will attempt to do that again. 
And what happens is, you know, we have the ultimate 
responsibility for this, but if the service does not care 
enough about its people to do that, what kind of message does 
that send to these people that you represent.
    So you don't have to comment. They are all writing it down. 
[Laughter.]
    Sergeant Major Tilley. Good.
    Mr. Hobson. Because I don't want to put you guys on the 
spot with people that you talk to.
    Ms. Granger.

                      BASIC ALLOWANCE FOR HOUSING

    Ms. Granger. One more question concerning housing, to make 
sure that I understand. I think what I hear is: There is not 
enough of it. What you have of it, the majority is substandard 
or badly in need of repair.
    Chief Master Sergeant Finch. Except for the new stuff. It's 
great.
    Ms. Granger. Except for the new stuff. Right. Good.
    What about housing allowance? Go back, again, to my 
experience of the base that is in my district, and one of the 
major problems was that there is not enough housing at the 
base, and the housing allowance was not adequate to find 
anything that was acceptable, really, off of the base. Is that 
still mainly the situation? Are you still having that kind of 
problem?
    Master Chief Petty Officer Herdt. Ma'am, my look at that 
would be----
    Ms. Granger. You have a concerned look. Let me explain a 
little bit better then. In other words, if I need housing, and 
there is not housing on that base, and I get my housing 
allowance, can I find an apartment or a home with what I am 
given? Is that an acceptable amount of money, or is it far 
below what they need?
    Master Chief Petty Officer Herdt. It is better. We are 
heading in the right direction. BAH is an improvement over what 
we used to have. But it is problematic in a couple of areas. I 
think fundamentally it is a great problem; problematic in a 
couple of areas.
    We go out and do the surveys. Assuming that the surveys go 
well, they go in the right area, they get the survey right, 
there is no way to control the market in that area from just 
raising the rents, and that sometimes happens.
    The other thing that does not happen sometimes is when they 
go in, they may be able to determine the market value, the 
median housing cost, they do not determine availability--is a 
bit of an issue.
    And then the other piece of BAH that I think increasingly 
we are going to have to deal with, and right now we are 
restricted by law from adjusting BAH more than once a year, is 
as utility prices fluctuate, they are going to fluctuate, as 
some of these things change, they are going to change quickly, 
if what we have seen in California, and, quite frankly, across 
the Nation with regard to natural gas prices, we are going to 
have to have some mechanism, in my humble opinion, some 
mechanism to trigger, and I would see it an automatic way, of 
triggering a BAH increase without going out and taking another 
survey. Whether that be based on price per kilowatt hour or BTU 
days or whatever it might be, we have got to figure out some 
way, I think. Sooner or later, we will have to be addressing 
that issue.
    Sergeant Major McMichael. It is important that we not only 
just have an apartment to lease or rent, but to be able to get 
an apartment that meets the standards of their counterparts. 
And not only that, that it would be an apartment where we can 
rest assured that the security and the safety of our family 
members during our deployment is also a high value.
    Another point, as Master Chief Herdt said, is availability. 
If we look at Miramar or Southern California, regardless of the 
increase of BAH, it is the availability to spend that BAH. So, 
therefore, we can still have the money or increase the pot and 
still have nowhere to spend it, which means that the individual 
will have to travel a great distance from their home to work. 
So it is a little bigger than just finding a place; sometimes 
there is no place to find.
    And the same with PPV. I think when you look at California, 
and especially Camp Pendleton, California, a lot of the public-
private venture projects are being done on the installation 
where we own the real estate, which helps uswith encroachment 
and things of that nature. But in other areas, we do not have the real 
estate on the installation, but we have to go out into the communities 
to do that. So we are moving forward in those projects.
    Mr. Farr. Is the quality of the housing being built that 
way on Pendleton as good as that in the private sector?
    Sergeant Major McMichael. I would say it is better.
    Mr. Hobson. We are going to go look at one.
    Sergeant Major McMichael. The quality of housing there 
would lend an opportunity to visit. I would say to you, sir, 
that when you see this housing, you will be quite amazed of the 
standards that we have reached in this period of time. We have 
Marines reenlisting, rather than get out of the service, 
reenlisting to move into them and handing them the key to move 
into these great standard homes.
    Mr. Hobson. There should be a project, I was told----
    Master Chief Petty Officer Herdt. You would see the same 
thing at Lemoore.
    Mr. Hobson. Lemoore? Yes. I have been to Lemoore.
    Master Chief Petty Officer Herdt. Beautiful.
    Mr. Hobson. Yes, but you were going to give that away at 
one time, sir, to a privatization project, brand new stuff, 
until we got there. [Laughter.]
    We are going to go to Pendleton, and there is going to be a 
ribbon cutting out there. And I would invite anybody that wants 
to go, I think sometime this summer, if I am not mistaken.
    Sergeant Major McMichael. I think if you go to Pendleton, 
you will be more than happy to replace these pictures on your 
walls today with modernization from Camp Pendleton.
    Mr. Farr. I did not mean to interrupt, but this is exactly 
what I think the committee is talking about. Although I think 
that the privatization, we kind of throw that around loosely, 
it means different things to different people.
    Mr. Hobson. Well, it is different in different places and 
in different services.
    Kay, anything else?
    Ms. Granger. I am through.
    Mr. Hobson. Robert, and then Norm.
    Sergeant Major Tilley. Could I just?
    Mr. Hobson. Sure.
    Sergeant Major Tilley. I think that the point about BAH, 
about having the flexibility of that, is really very critical, 
because that creates a lot of problems for young 
servicemembers, I don't care what branch of service. When they 
adjusted the electricity out in California and the cost of that 
certainly shot up, I don't know what the percentage was, but 
that is very important.
    The other thing I would ask you do not forget, do not 
forget about the soldiers that are out in recruiting stations, 
Reserve Officer Training Corps (ROTC) places like that that are 
out by themselves. The cost for them living sometimes is 
incredible. We continue to watch that. We are looking at that 
right now----
    Mr. Hobson. You were one of those once, weren't you?
    Sergeant Major Tilley. Yes, sir. So, you know----
    Mr. Hobson. Maybe we ought to say that the BAH is the basic 
allowance for housing. Everybody in this room probably knows, 
but we have a TV camera here, and they probably don't. Some 
people don't know.
    Did you want to comment on that?
    Chief Master Sergeant Finch. I would like to add one 
comment, Mr. Chairman. There are not enough houses on military 
installations to house all of the people that we might house. 
In fact, we look to the local communities to do that.
    And BAH, sir, the BAH, is the mechanism that we have to pay 
people to be able to move downtown. And that has always been an 
issue for our soldiers, sailors, airmen and marines, because 
the BAH never would compensate people enough to be able to get 
to a median cost. It was always expected to pay some out-of-
pocket expenses. Last year, when the secretary of defense moved 
to reduce the out-of-pocket expenses by putting more money in 
there, that was a welcome issue for many of the airmen, and 
certainly in the Air Force.
    But the question of standards and what it is they can 
afford to get and what they were expected to be reimbursed for 
has really become a focal point with many airmen in the last 
year or so with many airmen. You know, if the standard is, 
should be able to get an apartment, then the question really 
comes up: Is that where we are expected to live? And then: Is 
there a disparity between what we might get if we lived on base 
versus what we might get off base? And we are struggling 
through that. But that certainly is a big issue for us, and we 
appreciate any help.
    Mr. Hobson. Robert.
    Mr. Aderholt. Thank you.

                               CHILDCARE

    Some of you in your testimony had discussed the aspect of 
childcare, and I just wanted to ask an open-ended question, and 
invite any of you to address that aspect and what things the 
committee needs to know and things that would be helpful for 
them. Specifically, how we can better help the men and women 
who serve and who have children that are at a young age? 
Anyone.
    Sergeant Major McMichael. Well, I think we will always 
continue to need to improve our childcare facilities. And 
anytime that we can add to any installation, a base, a station 
within our services, that we can put a new childcare or child 
development center there, it only adds to the future of not 
leaving any child behind, because it gives them the opportunity 
to be better prepared to go into the schoolhouses, which will 
be the next step.
    We are seeing more Child Development Centers built within 
our service around the Marine Corps. As I said in the written 
statement, that we are actually building one this year at Camp 
Lejeune, North Carolina, and we already did several since 1996 
throughout the whole Marine Corps.
    Master Chief Petty Officer Herdt. Sir, if I could, I would 
tell you that, increasingly, we are two-income families, mostly 
out of necessity. I think there are many that would like to 
stay home, and perhaps raise their children, that do not feel 
like they can. But as we continue to move down that road, the 
need for childcare is going to continue to grow.
    We do not have enough spaces yet. We have worked at looking 
at innovative ways of providing those spaces, through 
contracting, subsidies, through home childcare, which I think 
is a real bright spot on the future, which is where I would 
like to see children, quite frankly, in homes.
    But this is an issue that we do not have enough; we are not 
likely to have enough; we are not likely to get enough money to 
have enough in the near term.
    Mr. Hobson. But we have dramatically increased in thelast 
few years.
    Master Chief Petty Officer Herdt. And we have. We have done 
well. But this is a 24-hour-a-day occupation, in many respects. 
Many of our folks have to work shift work. And beyond that, 
there is the emergent type of issues that come up. So this is 
going to be one of the harder things for us to solve.
    We are going to continue to, I think, and have made, as the 
chairman says, significant progress toward improving. I do not 
think our work is ever going to get done in this particular 
area. I do not think we will ever be real happy with where we 
are.
    Mr. Aderholt. In your testimony a little bit earlier that 
you provided today, you said the Navy will attain the goal of 
65 percent by fiscal year 2003. Exactly what does that entail?
    Master Chief Petty Officer Herdt. I believe that is the DOD 
goal that everybody is working toward. That is 65 percent of 
our estimated need; that leaves 35 percent. We are going to 
continue----
    Mr. Aderholt. Is that--go ahead.
    Master Chief Petty Officer Herdt. We are going to continue 
to work at that and try to find more creative and more 
innovative ways, always trying to keep the needs of the child 
and the family in mind. But even at our very finest child 
development centers, if that individual needs to come to work 
at midnight, we cannot keep them open 24 hours a day. It is a 
cost issue.
    Chief Master Sergeant Finch. The Air Force is a retention 
force. We want people to come into the United States Air Force 
and then stay with us for a very long time because we spend a 
lot of time training people. This means that we are also 
predominantly family oriented because the majority of people 
are married and have families which makes childcare a very 
significant issue, including the quality of care. My sense when 
I get some feedback is the quality of care is good, albeit it 
is very expensive. I mean, childcare is an expensive 
proposition to take care of. But we do not have enough child 
development centers to meet the needs, as the MCPON had said, 
to meet the needs of all the. It is one of those we will 
continue to improve on.
    Mr. Hobson. We build right to the nth degree of standards.
    Chief Master Sergeant Finch. They have been great.
    Mr. Hobson. Nobody in the private sector, I will be very 
frank, can compete with the facilities that we build.
    Chief Master Sergeant Finch. Great facilities.
    Mr. Hobson. My sister, she is always beating me up about 
how much money we spend on the facilities that we put in. And 
they are absolutely first-class facilities that we build. The 
Navy over in Italy has got it. Wright-Patterson has got a brand 
new one.
    Master Chief Petty Officer Herdt. I have not been in one 
that was not eye-watering, and it is because they are 
development centers. This is not childcare, this is child 
development, and they do a wonderful job at it.
    Mr. Aderholt. There are just not enough of them.
    Sergeant Major Tilley. Sir, could I just add? They have 
said everything already, so I should say ditto, but we need 
more child development centers, there's no question.
    The other thing about cost, the cost always comes up as an 
issue, especially younger soldiers.
    And then the last thing I would tell you is that I told you 
a little while ago we are deployed more, we are moving more, 
and the fact that it has to almost in some cases be a 24-hour 
service and it is not. And so it is 7 percent of the United 
States Army that are single parents, and that creates quite a 
few problems for the military.
    Mr. Aderholt. Thank you.
    Mr. Hobson. Norm.
    Mr. Dicks. Thank you, gentlemen. I appreciate all of your 
great service to the country. And also I feel that you are 
about the best witnesses we get every year on the situation 
that faces the military.
    Last year I did, being from, the Tacoma-Bremerton area, I 
had a chance to go to Fort Lewis, went over to Puget Sound 
Naval Shipyard, went to McChord, saw a few Marines in 
Bremerton, too, and really talked to the recruits and the 
people serving, the people serving in the service, about the 
situation.
    And one of the things that came up at that time was this 
two-tier housing allowance. We just got rid of the two-tier 
pension, then we were going to a two-tier housing allowance. We 
were able to stop that. It was going to be a situation where 
the new person coming in would get a lower housing allowance 
than an incumbent, and we were able to block that with a 
bipartisan effort here in the Congress.

                      SUPPLEMENTAL APPROPRIATIONS

    Now, I have served 22 years on the Defense Appropriations 
Subcommittee, and this year, I think there was a great 
expectation with a new administration that there was going to 
be an initiative to provide additional funding for defense. And 
there has been, I think, a great disappointment by those of us 
who have served on these committees that there was not a 
supplemental appropriations bill.
    In fact, I have introduced a supplemental appropriations 
bill for about $7 billion. This bill was basically coming off 
the list of crucial items that were sent up by the chiefs of 
staff, with your consultation, I am sure of the things that we 
need this year to keep the military functioning and being able 
to do the readiness, the training, the other things that are 
necessary.
    I would like to ask all of you, don't you think we need to 
have a supplemental appropriations bill within the next month 
or so, so that we can continue to do the training and other 
things that are necessary for this year?
    Sergeant Major Tilley. Sir, absolutely. There is no 
question in my mind about that. If we do not get that 
supplement--and you touched on every point that I could 
probably think of--it is training. If we are not prepared to 
deploy, if we are not prepared to do our jobs if we have to 
deploy, you know, the people that are going to suffer for it 
are the soldiers on the ground. So there is no question that we 
need a supplement; there is no question from the Army we need a 
supplement.
    Mr. Hobson. Are you telling me you didn't budget right last 
year?
    Sergeant Major Tilley. Sir, I didn't----
    Mr. Hobson. Are you telling me that you didn't budget right 
last year?
    Sergeant Major Tilley. Sir, I don't get involved with that. 
All I know----
    [Laughter.]
    Mr. Dicks. All he knows is he needs money now.
    Would any of the rest of you like to comment on that? 
Isthere anybody here that says you do not need a supplemental?
    Chief Master Sergeant Finch. Not to my knowledge.
    Mr. Dicks. And, you know, you have things like steaming, 
and flying hours, and all of the things that make the military 
readiness there.
    The other thing I worry about is the quality of life 
issues. In your statement, I think you cannot say it any better 
than this: ``I doubt I am alone in believing that there are 
readiness issues. I stressed to one of your House 
colleagues''--this is Sergeant Major Tilley's statement--``just 
last week the peace of mind soldiers have when they can deploy 
knowing their families are taken care of back home. Knowing 
their loved ones are living cleanly, safely and somewhat 
comfortably allows them to focus on accomplishing the mission 
at hand and taking care of their other family--the troops they 
are on deployment with.''
    And I am sure all of you would echo that, because it is a 
concern about the quality of life. And if people are living in 
a rundown house, and if they are worried about whether they are 
going to get health care, and trying to make the budget work, 
and not having day care 24 hours a day or at least for, two 
shifts, those kind of things are really critical, and we are 
trying to keep people in the military.
    A lot of debate on the floor of the House about whether we 
should be in Bosnia, whether we should be in Kosovo. I think 
that we have done well there, and I think the people that have 
served there say that they believe that these missions have 
been important. But if we do not take care of the quality of 
life issues and get a supplemental, we are starting to see this 
thing start to unravel.
    And so I feel very strongly that we in the Congress, 
ultimately given the final respolnsibility by the Constitution 
to make sure that we have a military that is fully prepared, 
trained and equipped. And Congress ultimately has to step up in 
situations where, whether it is transition or whatever, and 
insist that we have the resources to do what is necessary.
    And we are not talking a lot of money here, we are talking 
about $7 to $10 billion for a supplemental for this year. Then 
they can do their strategic review and come back.
    I hope that the administration does take a look at things 
like roles and missions. That has not been done since the end 
of the Cold War. It needs to be done, and we need to take a 
hard look at these things. I hope it is not just a general 
essay of some sort, which I am afraid it is going to be. And to 
me, we have an opportunity here to, one, take care of the needs 
of this year, and two, to think about the future and the kind 
of military that we need for the future.
    And again, I think, Sergeant Major, you hit it right on the 
head here, it is what these people who are deploying. For 
example, we were with General Schwartz this morning, he was 
bragging to some of your colleagues that he had had three tours 
in Korea, and they said, ``That's fine, General, but I have 
been there four times.'' Another guy said, ``I was there five 
times.'' And I have been up to the DMZ and seen those old 
facilities. We have tried to help. This committee has tried to 
respond, the Defense Subcommittee, which Mr. Hobson and I are 
on, have tried to respond to those things. But we need to do 
more. I mean, the bottom line is that we are still not there.
    I mean, what is the number for the Air Force to take care 
of all their housing? Isn't the cycle now 250 years or 
something like that?
    Chief Master Sergeant Finch. They are for facilities. Some 
of the facilities that we have right now are on a replacement 
cycle of 250 years because all we have right now in terms of 
money in that pot will allow us to just put Band-Aids on the 
infrastructure we have.
    Mr. Dicks. To me, that is totally unacceptable. And I would 
love to hear any other comments.
    Master Chief Petty Officer Herdt. Sir, I would say this 
about the supplemental, and it is certainly not in my charter 
to manage the budget for the Navy. I have made my views known, 
though, that if in fact we have to scale back because of no 
supplemental, the last place that we should scale back, the 
place that I would be most concerned about scaling back, and 
perhaps this will seem self-serving and a little bit 
paternalistic--not paternalistic, but self-serving, at any 
rate--would be from all the gains that we have made in the 
personnel arena.
    We have done great things. You have made those things 
possible, along with the whole chain. We have taken very 
positive steps in moving us from the final stages of being a 
conscription force into this all-volunteer force we are today. 
And with recruiting and retention and attrition being as 
tenuous as they are today, the last thing we need to do is 
start messing with those things that we have put in place to 
address much of that. The effects from that will be long 
lasting.
    So whether, you know, we find a way to do this without a 
supplemental, whether we can do it without a supplemental, I 
can't speak to. But if we have to go back in and start dealing 
with some of the personnel things that we have fixed, if we 
start sowing the seeds of doubt again, that will be long 
lasting. So it would be my hope that whatever we do, that we do 
not go after these personnel things.
    Mr. Dicks. You mean, protect pay and the retirement and the 
housing allowance?
    Master Chief Petty Officer Herdt. Well, the pay, 
retirement. But it is more than that. Continue to buy down the 
housing allowance is a piece of that. But you start taking a 
look at tuition assistance, for instance. If we start backing 
off of tuition assistance, if we are not able to move people 
when they are scheduled to be moved, and we start throwing this 
doubt back into their plans and their view of what this life of 
service is about and what the returns are on this life of 
service, then those are hard to erase down the road.
    And so I would just hope that, as we work our way through 
this, and we will work our way through it, and I think every 
sailor out there believes that you and everyone involved, we 
will work our way through this, whatever we do, we need to be 
protective of those things that we put in place for personnel.
    Mr. Dicks. Good.
    Thank you very much, Mr. Chairman. I know we've got a vote.
    Mr. Hobson. We have got a vote on. But John has some things 
that he would like to ask. I was not going to adjourn, but I 
think what we are going to do is go vote, ask you to wait a 
little longer, we are going to go vote and come right back. 
Then we are going to have a little organizational meeting. We 
are going to have John'sdiscussion, then we will have our 
committee organizational meeting after that.
    Mr. Dicks. We have about five more minutes.
    Mr. Hobson. There may be a series of votes, I'm afraid.
    Well, go ahead now, take about five minutes, because there 
may be a series of votes.
    Mr. Olver. Okay. We may know that a little bit better.
    Master Chief, I hope that what you have said is the way 
that this will be done, if it is going to be done. I would 
worry very much that quite the opposite would be the way it 
gets handled. That strikes me as the more likely approach to 
it.

                               RETENTION

    I really wanted to ask some questions about two issues. One 
is retention, part of which has to do with deployments, and 
then explore some deployment issues here a little bit.
    This committee has a good deal of responsibility toward 
issues that have to do with retention. We have heard a lot of 
anecdotal material about the retention issue, and also it has 
been peppered with some good, solid statistics from the 
services about what your experiences have been. And all of us, 
I think, would like to be providing a set of amenities in total 
for the men and women in the services so that if they chose, 
that people who are well-trained and serving us exceedingly 
well would feel that they would want to stay in the service. I 
think we would all want to have a good deal of attention to the 
retention issue.
    I think it is very difficult to really tell where our best 
effort is to be expended here on just the broad anecdotal kind 
of discussion that often becomes a part of it. Each of you have 
spoken to some degree about retention, and I can distill it 
into the major issues. Other things have been said, but the 
major issues being pay and the quality of life, which includes 
both housing and some of the kind of supplementary 
infrastructure that goes along with quality of life and then 
probably the nature of the deployments.
    But there are other issues. It is a whole package, 
retention. It is the compensation, which is a responsibility of 
all of us as members, but not specifically the responsibility 
or jurisdiction of this subcommittee. It includes the housing 
issues, which a major step was made on the BAH, but it really 
includes within those housing issues--there are differences 
between what is happening for the singles and what is happening 
for the families on the housing. And there is the relationship 
of on-base MILCON, traditional MILCON, and then the 
privatization new initiatives, which are really quite small in 
their totality compared with the whole of our housing needs. At 
this point, and as has been said, one of the services--we all 
know that it is the Army--is onto the new housing 
privatization, has nothing yet actually occupiable.
    Sergeant Major Tilley. Sir, we are working on it. 
[Laughter.]
    Mr. Olver. I know. I know.
    So that is very specifically our responsibility. But our 
responsibility, that's a second group, the actual combination 
of on-the-market versus the public-private partnership 
arrangements and the traditional MILCON; that is our 
responsibility.
    But so is the area of what I use the term ``supplementary 
infrastructure,'' which includes the childcare, the health 
care, the recreation and fitness facilities that are there, and 
the schools, the educational aspects.
    And then so is another thing, which a couple of you 
mentioned was really serious, the deterioration of the 
workplace, of the facilities, the hangars, the training 
facilities that are there.
    Now, some of those are related very closely to where the 
spouses, the families, get together around the kitchen table. 
Clearly, the housing, the day care and education and things of 
that sort. I think the nature of the deployments falls into the 
category of having a major impact with families, maybe not so 
much with singles. I don't know about that.
    I am wondering how far does the workplace stuff have to 
deteriorate before it becomes a key portion of what it is that 
people are thinking about for their determination about 
retention. We have not done very much about that, compared with 
we have put a lot of effort onto the housing.
    We have done the compensation, we have started to do some 
things on housing, but the housing stuff occurs on a very 
incremental basis. You cannot get at it. I think we are 
probably falling behind. With all of what we are doing, we are 
probably falling farther behind on the traditional MILCON and 
on the privatization programs, in terms of what our needs have 
and the percentage of the housing that is actually becoming 
less and less appropriate.
    And at what point, do we need to put money into those 
workplace aspects, because that becomes key? I don't know how 
we would get to know that unless there was a more considerable 
study of the retention issues in general.
    Mr. Hobson. Why don't we let you think about that, 
answering his question here, and we are going to come back, 
because we have got about five minutes.
    I do want to say one thing. There will be a supplemental, 
in my opinion. It won't be as fast as Norm wants it, but I 
think there will probably be a supplemental down the road. My 
concern about a supplemental is where we fit in it and how much 
of a Christmas tree it becomes in the other body.
    Also, I might just mention, as we go, we tried in this 
committee very well, and in this House, to fix some of those 
installation things overseas. And I was severely criticized 
both here in the House and in the other body for doing POL 
facilities, which were called parking lots and some other 
things, in the discussion that we had on that. So I can tell 
you, it is a rather difficult thing to do, because we did try 
to do that here to the tune of about $1 billion, and we had a 
hard time, and we did not get it all, but we started, but it 
was not easy to do. And I just ask everybody to go back and 
look at the record, because we did try to do it. And we will go 
over it when we come back.
    Mr. Olver. Mr. Chairman, I understand we are going to have 
a series of six votes, so we might be gone for close to an hour 
here. Perhaps we ought to adjourn and do whatever else later.
    Mr. Hobson. It is going to be that long?
    Ms. Granger. We just found that out.
    Mr. Hobson. Oh, six votes.
    I'm sorry, guys. You don't want to sit this long. 
[Laughter.]
    Mr. Olver. I would like to discuss further that issue of 
deployments, because I am curious of how the deployments have 
affected the way you do it. But we will have to do that in a 
different way.
    This was a way, all the people who were out here listening, 
to see what you guys are going to say. They otherwise might be 
warned that I will follow up on some of these questions when we 
have people from the specific services in.
    Mr. Hobson. Let me announce our next hearing will be March 
14 at 9:30 a.m. Subject is European military construction, 
which is kind of apropos. Our witness is General Joseph 
Ralston, commander in chief, United States European Command.
                                         Thursday, March, 29, 2001.

                 QUALITY OF FAMILY LIFE IN THE MILITARY

                               WITNESSES

ROSLYN S. RILEY, UNITED STATES ARMY SPOUSE
DARCIE TURGEON, UNITED STATES NAVY SPOUSE
RONETTA MILLS, UNITED STATES MARINE CORPS SPOUSE
KATHLEEN PLYLER, UNITED STATES AIR FORCE SPOUSE
GENERAL JOHN H. TILELLI, JR., PRESIDENT AND CEO, UNITED SERVICE 
    ORGANIZATIONS
JOYCE RAEZER, EXECUTIVE DIRECTOR, NATIONAL MILITARY FAMILY ASSOCIATION

                       Statement of the Chairman

    Mr. Hobson [presiding]. The committee will come to order.
    I want to thank you all for coming this morning. There will 
be members coming in and out. John was just telling me he has 
two committees going on, one right next door and then another 
one at the same time. So there is a lot going on today. Some of 
the members will be coming in and out throughout the morning.
    Mr. Vitter is here, at the far end.
    Mr. Vitter. I want to apologize ahead of time. I have two 
other committees as well.
    Mr. Hobson. Yes, there is a lot going on, but we wanted to 
get these hearings in early. We are trying to send some 
messages to various people about quality of life.
    Today is the second of two hearings on quality of life 
issues in the military, and I believe it is going to be very 
special.
    Occasionally, there are newspaper stories that make a 
person sit up and take notice. For this subcommittee, ``Married 
to the Military,'' an article that ran two weeks ago in The 
Washington Post was such a story. The description of the 
sacrifices the Rotte family has had to make as a military 
family was so compelling that this subcommittee sent a copy of 
it to every member of Congress.
    And I wish Chet were here. I was going to send it out to 
just the Defense committees, and Chet said, ``We need to send 
it to everybody.''
    Today, I am very pleased to introduce four special 
individuals: Roslyn Riley, Darcie Turgeon, Kathleen Plyler and 
Ronetta Mills. They will share with us their personal 
experiences about what it is like to be ``married to the 
military.''
    We will also hear from a second, equally impressive panel 
that includes retired General John Tilelli, who is president 
and CEO of the USO, and Joyce Raezer, the associate director of 
the National Military Family Association and an Army spouse of 
18 years.
    I want to tell you a little bit about our first panel.
    Roz Riley says there has not been a day in her life that 
she has not held an Army ID card, either as a child of a 
servicemember, an active member in her own right--in 1991, she 
retired as a lieutenant colonel--or as a spouse of a 
servicemember presently serving in the United States Army.
    For numerous volunteer activities, the Army awarded her 
with its Outstanding Civilian Service Medal, Commander's Award 
for Public Service, and a Certificate of Appreciation for 
Patriotic Civilian Service. She has been stationed in Europe, 
the United States and Korea, and with her husband, Colonel Don 
Riley, has four children.
    As an active volunteer with Enlisted Family Support Group 
and the Command Family Ombudsman for the USS Enterprise, Darcie 
Turgeon has presented hundreds of pre-and post-deployment 
programs to thousands of sailors, Marines and their families. 
With her husband, First Class Petty Officer Tom Turgeon, they 
live in Virginia Beach, Virginia.
    Like most military spouses, Kathleen Plyler has traveled 
from one end of the globe to the other. Since marrying Jim 
Plyler in 1982, she has lived in Texas, Alaska, Arkansas, Korea 
and Germany. Now with two boys, Mrs. Plyler is a volunteer 
coordinator at the local elementary school. She is also 
president of the Pope Air Force Base Officers' Wives Club. Her 
husband is the commander of the 43rd Operations Support 
Squadron at the facility.
    Ronetta Mills is kept very busy working and volunteering 
for the American Red Cross, the Personnel and Family Readiness 
Division, the Navy-Marine Corps Relief Society, the Girl Scouts 
of America, probably selling a lot of cookies.
    That was just over, I think. I bought a bunch of them; you 
can tell. [Laughter.]
    And the Helicopter Marine Squadron. She and her husband, 
Gunnery Sergeant William Mills, have a 13-year-old daughter at 
Quantico Middle School.
    Also, I want to recognize some other military spouses 
supporting our witnesses. First, Lisa Rotte, who was the 
subject of The Post story is here.
    Lisa, would you stand up please, so everybody can see you?
    Several spouses accompanying General Schwartz have come all 
the way from Korea.
    Cathy Whitcom? Would you please stand up, Cathy, so 
everybody can see who you are?
    Susan Sinclair, Candy Glerup and Diane Maloney. We are 
going to come over and see all of you, if you are still all 
there, in May.
    Mary Regner is married to Marine Colonel Mike Regner at the 
Marine legislative liaison office here. And Donna Robbins, who 
is married to General Earnie Robbins, is here; General Robbins 
is the chief engineer of the Air Force.
    Where are they? Right here. Stand up, so everybody can see 
you.
    I have been to Donna's house out here, checking it out and 
checking out some other houses on her street. So we do go out 
and look at this stuff.
    Lisa Rotte, quoted in The Post story, said it best, ``We do 
have a good military, a bunch of good women and men. They are 
proud of what they do. Without them, we could not have the 
freedom and prosperity we have.'' She is right.
    I would take her statement further, however, and assert 
that military spouses make it possible for service men andwomen 
to do their jobs at the level we often take for granted. They deserve 
the best we can give them.
    We are very proud of and grateful for all the sacrifices 
and contributions that you and your children and your spouses 
make every day to our country. And we want to welcome you to 
this hearing.
    I need to do one other thing, or I will be in trouble, too. 
I need to introduce my wife, Carolyn, who is over here in the 
corner who will be with us today also. She has put up with me 
moving around a lot, not in the military, but in our younger 
life, we moved around a lot.
    What I would like to do now is ask my ranking member, John 
Olver--John has been a very good ranking member. He has 
traveled with me, trying to show members of our committee all 
over the world how people live and what we should be doing 
differently to try to improve their quality of life. And he has 
been very supportive of this committee.
    So, John, are there any things that you would like to say 
at this time?
    Mr. Olver. Just a couple of things, Mr. Chairman. Thank you 
very much.
    I also want to welcome each of you as witnesses here today. 
I think we all know, as members of this committee, subcommittee 
and the Congress as a whole, that it is not just servicemembers 
who make a commitment to serve our country but the entire 
families. So this is very important.
    I really want to pay a tribute to the chairman for bringing 
this panel together. This is the first time that we have had 
this particular panel, as I recollect it. And it is a 
perspective that we truly need to have in our minds.
    As a matter of fact, I suppose as our force evolves and our 
deployments evolve and grow or change, there may be some time 
when we will even have a male spouse as part of this panel. We 
have not yet had a female who is the first sergeant or whatever 
the exact title is in the different services, but that time 
will perhaps come.
    So I think I can speak for all of us in this, at least on 
my side--I do not need to speak for those on the other side--
but really, in a sense, for all members when I say our 
commitment has been to quality of life issues.
    It is our major mandate in this subcommittee. And under the 
leadership of the chairman, we have made major strides in the 
area of housing and in other areas of the quality of life. And 
it is our clear mission to try to make the quality of life 
better for not only the people who serve in the service, but 
obviously the families as well. All of that is very important.
    I suppose the priority that gets the most attention is the 
housing. You are free to speak about whatever. I hope you will 
be absolutely candid here today and tell us the whole story. I 
am sure you will. [Laughter.]
    The housing issue is one which gets the most attention. But 
there are other issues.
    If you have children and you are on a base where the 
schools are important to you, we have made some strides in 
those areas, within the limited resources. We need to know what 
the relative priority is. We need to know how good they are. We 
need to know whether it is the child development centers that 
are of great importance, the childcare centers, or the 
recreation facilities.
    All of those things are part of the total quality of life, 
and I really am looking forward to hearing what you may say in 
respect to all of them and what the relative priorities may be 
in your family's thinking.
    Thank you, Mr. Chairman.
    Mr. Hobson. Are there any other spouses in here that I 
failed to introduce? Anybody want to stand up and introduce 
themselves?
    If not, we will go ahead, and we will take your statements 
now. Your complete statement will be put in the record, and we 
would like you to summarize. Then we will ask each of the 
members to ask questions, and you can see they are filtering 
in. There are a few more filtering in here as we go along. We 
are going to be pretty strict on the five-minute rule today, 
because we have two panels and we have a number of members.
    So I guess we will start on my left with Mrs. Riley.

                      Statement of Roslyn S. Riley

    Mrs. Riley. Thank you, Chairman Hobson.
    I would like to thank you for your invitation for us to 
come and speak on behalf of the families in the military. It is 
a great honor to be here, and I would just like to thank you 
all for the sacrifices that you are making and the interest 
that you are showing. You are making deliberate action that you 
are concerned.
    It is an honor to represent the military families, the Army 
families particularly, from all over the world--Korea, Germany 
and the United States. And I represent them on common ground 
because I am here because I love a soldier, a soldier who 
serves our nation and serves it selflessly. And we are very 
proud of that.
    It is helpful if you try to develop a framework in terms of 
quality of life issues that revolve around military families. 
The very center of the framework is a soldier and his family. 
Rings that extend out from that soldier and his family develop 
the quality of life framework.
    The first ring and most important is housing. You have 
already mentioned that, Mr. Olver. The next ring as you move 
out would be schools, daycare centers, spouse employment. Those 
are big issues in our lives. The next ring is health care. As 
you move progressively out, you touch on Post Exchange and 
commissary. And then the last ring that I like to use to 
encompass the entire family and the soldier includes the 
community services and the support that we get in our 
communities.
    A few examples. I have lived in Korea, the United States 
and Germany. And it is very, very clear to me that the housing 
in Korea and Germany is the most problematic for our military 
families.
    There is a wife in Darmstadt, Germany, who will not ask her 
family from the U.S. to come visit. She wants them to come 
visit, but she is embarrassed by her home, so she has not sent 
them an invitation to see where she lives and enjoy that 
culture of Germany.
    Just last week, I went to see a facility that was identical 
to one that I had lived in in 1955 as a child. I lived in an 
identical stairwell in 1987 as an Army wife. And then seeing it 
last week, it just brought me to tears. It reminded me of the 
wife who said, ``You know, my housing looks like a ghetto.'' 
And indeed, seeing it that day, it was ghetto-looking. Her next 
comment was, ``Is this what they think of me?'' And it just 
brought me to tears that day.
    As you move from the inner to the outer circles, you see 
that everything revolves around our life, our community, our 
sense of community. With that sense of community, with 
thesupport of the community that lives our life, that understands our 
lifestyle, we can endure the hardships of separation, the deployments. 
We can deal with the pay variances, although it would be nice to not 
have to deal with that. We can deal with the schooling situations we 
are placed in, the frequent relocations, plugging into a community, 
unplugging and going into another community, if we know we have 
community support, if we have that sense of community.
    If you say, ``What is the priority?'' you cannot just 
address one of the rings; such as housing. If there is a 
deficit in one ring, we can deal with that. But when you have 
deficits in each of the rings of our quality of life, it begins 
to erode the fabric of our families. And for some families, 
they just decide it is too hard to stay. It is too hard to deal 
with it anymore, so they choose to leave. So it does become a 
family decision to leave the military.
    We have 226 years of Army history, and it is full of 
sacrifice by our soldiers, but it is also full of sacrifice by 
our families. Our bottom line is, we want to know, are our 
sacrifices as military families worth it? We do not want fame 
and fortune. We do not want glory. We just want to feel good 
about where we live. We want our husbands to work in a safe 
place and healthy environment. We want our soldiers to be 
effective in their work. We want a good education for our 
children. We want to experience community wherever we may be. 
We just want to know, is it worth the sacrifice?
    I would like to thank you for your concern and for the 
emphasis that you are putting on the quality of life, the 
quality of our life. Again, I am here because I love a soldier, 
and I bring the voices of the women that I represent who also 
love soldiers.
    One wife approached me at a quality of life discussion 
group that I had, and said, ``You know, it is wonderful to know 
that finally they are willing to hear our voices.'' And I would 
like to thank each of you for listening.
    [The prepared statement of Roslyn S. Riley follows:]
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                      Statement of Darcie Turgeon

    Mrs. Turgeon. Good morning, Mr. Chairman and to the 
distinguished members of the Military Construction 
Subcommittee.
    My name is Darcie, and I am a Navy spouse. My husband, 
Chief Electronics Technician Thomas Turgeon, is serving on 
board the recently christened USS Ronald Reagan, our newest 
aircraft carrier.
    I would like to recognize the previous efforts and 
accomplishments of this committee. In just a few days, we will 
be able to shop at a brand new commissary at Naval Air Station 
Oceana, and hopefully they have not put arrows on the floor. We 
do not need to know which direction to go in the commissary. 
[Laughter.]
    Improvements for our military personnel and their families 
are always very much appreciated.
    The Navy has been a great experience for me, with many 
wonderful opportunities. I am here to lend insight and 
information regarding our employment and lifestyle. It is truly 
my pleasure to speak with all of you today.
    For those of you that are not familiar with Hampton Roads, 
Virginia, we are unique in two very important ways. Not only do 
we have the largest Naval installation in the world, but when 
you consider personnel from the Army, the Marine Corps, the Air 
Force and the Coast Guard, along with the Navy, we are home to 
the greatest concentration of military personnel in the world.
    In my opinion, the most critical issue for Hampton Roads 
military personnel at this time is housing. This is obviously 
not an uncommon issue. Our families can be on the housing 
waiting list for up to a year or more. The only option for 
these families is to seek shelter in the community.
    Hampton Roads is a fabulous community. However, the system 
in place to assist with housing costs is far from efficient.
    It is my understanding that BAH, which is Basic Allowance 
for Housing, is intended to cover the majority of the rent or 
mortgage and some of the utilities. From my perspective, this 
is rarely the case for folks in Hampton Roads, and I have the 
utmost concern for our counterparts out west.
    I think it is also just as important to consider the 
servicemembers' perspective on housing. Home is the place they 
return to after long, arduous days and/or the place they leave 
those they love while deployed half a world away for six months 
and more.
    With insufficient compensation for suitable housing, our 
military personnel are forced to seek residence in the less 
desirable areas of our community. In essence, we are asking our 
service men and women and their families that are also serving 
their country to not only work at-risk, but to live at-risk.
    With regard to Navy exchange and commissary facilities, my 
concern and experience is that we need to increase the number 
of military personnel and families that utilize this benefit. 
If a sailor or family member can purchase items out in town for 
the same price or less than what they are sold for in the Navy 
exchange or commissary, what real benefit is there to have 
these facilities?
    Creative marketing strategies, such as price matching with 
ads or returning receipts to be refunded the difference in 
price, do not inspire me to shop at the Navy exchange or 
commissary. And to be quite honest with you, I really just do 
not have time to be chasing, you know, 39 cents apiece with a 
receipt, if you can appreciate that.
    The surcharge at the commissary in some areas is at the 
same rate of sales tax or higher. Again I ask, where is the 
benefit for this facility? I want to know that when I shop in 
the Navy exchange and commissary, that I have gotten the lowest 
price available. It is my opinion that if service men and women 
were comfortable with the concept of knowing they will not get 
a better price out in town, it would be more often the first 
choice to shop, not an occasionally used benefit.
    As a military spouse that is employed outside of thehome, I 
have a few concerns regarding my employment options. It has been my 
experience that in areas with a high concentration of military 
personnel, the average wages offered are considerably lower than the 
national average. I can only concur that employers in fleet 
concentration areas are counting on the constant influx of potential 
employees.
    It may be inappropriate for an employer to ask questions 
regarding our spouse's employment or how long we will be at the 
duty station. However, the resume or employment application 
that we provide is written proof that we may have moved, for 
example, every three years for the past 10 years.
    Another scenario I have encountered is when an employer 
advertises hiring preferences to military spouses and then has 
limited or no options for health insurance or retirement 
savings plans. I would like to be considered a valuable 
employee for my expertise and efforts and not suffer undue 
consequences of my husband's decision to serve his country.
    My statement has covered just a very small portion of our 
everyday life as a Navy family. I take great pride in being a 
Navy spouse, and it has been my pleasure to share my thoughts 
with you today. We have an incredible military that serves, 
without question, national interests both home and abroad. I 
would like to encourage all of you to get to know some of the 
sailors and families from your respective states.
    Our sailors have made the choice for this career. As 
individuals, as elected public officials and as a nation, we 
need to reaffirm and honor their decision.
    Thank you.
    Mr. Hobson. Thank you, Mrs. Turgeon.

                       Statement of Ronetta Mills

    Mrs. Mills, will you explain what you are wearing on your 
lapel? You might tell what it is.
    Mrs. Mills. I will. I wear a key on my collar because I 
have been through training and I serve my husband's unit as a 
key volunteer. We work at the wish of the commanding officer to 
pass communication, information and referral to the families 
within our unit to maintain our sense of community and ensure 
that our folks have good information.
    Mr. Hobson. Thank you.
    Mrs. Mills. Good morning.
    Thank you so much for the opportunity to come here today to 
share my experiences as a member of the Marine Corps family. 
These years have truly enriched our lives, and I would not be 
willing to trade a single one of them.
    The recent improvements in pay, housing allowances and 
health care have definitely improved our quality of life and 
our family readiness. I would like to convey my appreciation 
for the work done by you and your colleagues to improve our 
situation in these areas.
    Secure, confident and educated families are crucial to the 
combat readiness of our troops. Marines cannot be at their best 
on a battlefield if they are unsure of the security and 
happiness of their families back home.
    In addition to the paycheck, the benefits I count on as a 
Marine spouse include our medical care, with which I am 
pleased--believe it or not--our commissaries, housing, child 
development and youth centers, DOD schools and our recreation 
facilities. Other benefits that may not be as concrete but are 
still important include the sense of community we feel as 
members of the Marine Corps family and a huge safety net of 
programs that are available to us.
    Our family has lived in civilian housing, as well as 
government quarters. Our experiences with quarters, when 
available, has been varied. When my husband was stationed at 
New River Air Station in the Camp Lejeune area, we lived in 
town until my layoff forced us to seek housing in quarters. His 
housing allowance at that time was not sufficient to cover our 
rent, much less our utilities, without my job included.
    We went on the 24-month waiting list in July of 1990, 
hoping for a break. That fall, a number of families chose to 
return to home towns in the face of the largest-ever deployment 
of marines from the area. Because so many people left 
unexpectedly, there were houses available for those who chose 
to stay.
    Our name came to the top of the list in December, and we 
were assigned a house. The housing inspector refused to give us 
even the street address until we had signed for the keys.
    Moving from a civilian home--three bedrooms, two 
bathrooms--we were forced to put about half of our belongings 
into storage in order to fit into the small two-bedroom, one-
bath apartment that we were assigned. We also found it 
necessary to part with one of our two dogs because they were 
both large and just too much for the size of the house and our 
neighbors.
    The next duty station we had was independent duty in 
Delaware. We lived in a civilian community in the Wilmington 
area until, once again, my job went away for corporate 
reorganization. At the end of our lease, the rent was 
increasing to the point where we could not afford it. We were 
given a choice of two different housings: The Philadelphia Navy 
Yard, which was in a very sad state of repair and in a 
delightfully awful area in Philadelphia, also over an hour 
north of where my husband was working in Wilmington. The other 
option was Dover Air Force Base, which was a great choice.
    The Air Force housing office consultant was very helpful. 
He treated us as valued customers, provided us with the keys to 
one townhouse and contact information for another, so that we 
could go talk to the tenants that were there. We could select 
which neighborhood we chose to live in. The house was 
comparable to the townhouse that we had been renting, the size 
and the configuration.
    From Dover, we moved to Patuxent River, Maryland, and 
weopted to live out in town because there was an 18- to 24-month wait 
for our quarters.
    At Quantico, once again, we were confronted with housing 
office staff that were less than helpful. Even though there 
were empty three-bedroom homes in staff NCO housing, we were 
forced to wait for a little over two months for a two-bedroom 
because of the size of our family.
    We were given a choice of houses at Quantico as well, one 
on each side of the same street. The house was small, built in 
the late 1940s, about 891 square feet. There was a nice 
fireplace in there, but it was condemned and unusable. Our 
kitchen floor was warped, water seeping up at times in between 
floor tiles from an unidentified source. In order for my 
washing machine to drain without running over, the lines had to 
be snaked and then ballooned, because the plumbing is so old it 
would not support my washing machine.
    The rest of the story of this house is that the front wall 
was separating from the foundation, where the gas line runs 
into the water heater, the water heater that is shared between 
two sides of the duplex. We did ask for help with this. My 
husband took pictures of it, took them into the housing office.
    In March of 2000, we were assured that they would come out 
and shore up the wall. In January 2001, my husband was in the 
office on another issue and talked with the housing office 
director at that time about the status of the repairs on the 
wall, and the housing director had no knowledge of it. He came 
and checked it. In 10 days, we were in a new set of quarters, 
and that one has since been slated for demolition.
    Mr. Hobson. But they are living in it?
    Mrs. Mills. No, sir. I believe the Marines are actually 
using it for urban assault training [Laughter.]
    And we now have two bathrooms in our new house, so we are 
real excited.
    You had asked also about some other issues. When my 
daughter was an infant, I worked as a volunteer, and while I 
volunteered, she stayed at the child development center at New 
River. The building was not new, but the people and the 
excellent state of repair of the facility made it a great place 
for her to grow. When I went back to the work force when she 
was in preschool, it was my first choice for full-time care.
    In an ideal situation, every family would have a parent 
stay home to be just that, a parent. But in today's world, many 
military spouses work so that there is enough money for some 
extras. Many work so that there is enough money for essentials.
    I would also like to take this opportunity to offer praise 
for our DOD schools in Virginia. One of the reasons we have 
chosen to live in government quarters here, despite the 
conditions, is that my 7th grade daughter is getting a quality 
education. I know it will serve her well in her desire to 
pursue a career as a large animal veterinarian. Her classes are 
small and her teachers, conscientious. The facility is not the 
best, and the access to technology could be better.
    One of the best things for DOD schools recently has been 
the standardization of the curriculum. When we receive our next 
set of orders, all of her credits will transfer to the new 
location if there happens to be one of those few remaining DOD 
schools there.
    Moving is difficult, especially for children in middle and 
high school. They are beginning to form friendships that will 
last them a lifetime. When different school curriculums, lost 
credits, different requirements for graduation and lack of 
school security are thrown into the mix of moving, it can be 
truly traumatic for our kids.
    Southern California is a case in point. Recent school 
violence in that area makes me dread the possibility that my 
husband's next set of orders may be to Miramar. Expanding the 
number and availability of DOD schools may be one way to 
improve the security and confidence of our family members.
    Your subcommittee asked that we, as spouses, address issues 
we see as affecting our day-to-day quality of life. I hope that 
I have provided you with some of the requested information. I 
would be delighted to answer any questions you may have.
    Thank you again for inviting me to share my experiences as 
a Marine wife.
    Mr. Hobson. Mrs. Plyler?

                      Statement of Kathleen Plyler

    Mrs. Plyler. Mr. Chairman and members of the committee, 
good morning.
    It is my honor and privilege to appear before you today to 
discuss Air Force families' quality of life.
    I come from a family that owned and operated a small 
business for 52 years. My grandmother was an artist who sold 
her work to pay for plane tickets so she and others could come 
and speak to Congress on wilderness issues. My father is the 
president of the Trinity County Public Utility District in the 
northern part of California. And I share this with you so that 
you know I have not had a lifetime of being spoon-fed opinions 
concerning the military. What I share with you today are my 
opinions, gained from 18 years of marriage to an Air Force 
officer.
    When asked to come and speak about quality of life issues, 
my first thought was, where to start. There are so many issues 
that are so important, and since we do not have all day, let me 
prioritize what I see as the most pressing issues facing 
military spouses every day around the world.
    Housing seems to be a popular topic. There is a long 
waiting list to move onto base housing. An important reason for 
this is that it is an incredible benefit. Why do military 
families want to live on-base? First, the cost-benefit factor. 
We personally pay $600 out of our pocket to live off-base, and 
this is not unusual.
    This is an especially important benefit to our underpaid E-
5 through E-9 noncommissioned officers and their families. We 
cannot afford to lose their service and commitment to the Air 
Force. They need good quality family housing and more pay or we 
risk losing them.
    Second, convenience. Servicemembers living on-base have 
easy access to work, the commissary, gym, daycare facilities, 
and youth sports activities that are all taking place around 
the corner, thus making them a true benefit.
    Third, safety. When husbands are deployed for three months 
at a time, it is nice to know that our security forces are 
seconds away, and anyone who enters our base must have an ID or 
a pass.
    Fourth, and perhaps the most important for wives, is the 
kinship they gain from living next door to a family that is 
experiencing common challenges. The bond of military friendship 
is the most important support a military spouse can have.
    Daycare. Let me speak a moment on daycare. The Air Force 
has the best daycare facilities going: great staff, secure, 
clean, and nutritious food is fed to the children. The only 
problem is that there is not enough available, especially 
hourly care.
    Let me relay a real situation that happened to a friend of 
mine not long ago. She had just recently moved. Her husband 
left for three weeks of training as soon as they unpacked their 
bags. She is pregnant, and she started having cramps and went 
to the emergency room.
    They gave her something to hold her over and made an 
appointment for her the next day to see an obstetrician-
gynecologist (ob-gyn). The next day there were no openings for 
hourly care, so she took her daughter with her to the 
appointment. She was told that she could not be seen because 
her daughter was with her, a good rule since a 3-year-old can 
be distracting, not to mention destructive to expensive medical 
equipment.
    When the medical staff turned her away, they said, ``Surely 
you know someone who can watch your child.'' This was not the 
case. She had just moved there, and her husband was not 
available to help. This is what we contend with every day, over 
and over, as spouses in the military. Daycare is a very 
important issue.
    Commissaries. I would like to especially focus on our 
overseas commissaries, as I have spent two years in Korea and 
three years in Germany. I can truly not imagine life in either 
place without them.
    First, when we shop in the local economy, we are, in many 
cases, unable to read the product labels, let alone the 
ingredients in the products. This is of great importance to 
families. Different societies have store hours that we are 
unaccustomed to and may close for several days during their 
holidays.
    It sounds romantic to shop off the local economy, and it is 
every now and then. I personally enjoyed it, especially the 
wine and cheese in Germany. But when you are responsible for 
raising a family, you must have 100 percent confidence that the 
food you need will be available.
    Here in the states, if you live on-base, it is a part of 
your base community, close by and convenient. If you live off-
base, it is appreciated because of some of the cost savings it 
represents and the convenience when your husband can swing by 
and pick a few things up on his way home from work.
    Military members have a say at their commissaries, and we 
can suggest items to be carried. We do have a voice. At Pope 
Air Force Base, we are very sad to be losing our commissary 
next month.
    Let me move into health care. This is a top priority for 
many military members and their families. When an individual 
first contemplates the military service, life-long care at zero 
cost is a big player.
    But if after signing the contract and the rules change, 
attitudes change right along with those changes. It is an area 
of great frustration for many of our military members and their 
families. I do not pretend to have all the answers to these 
frustrations, but most complaints I have heard are more about 
the bureaucracy of getting care than the care itself.
    Next, let me focus on the education of our children. My 
thought before I had children was that this was a nonissue, as 
our children would be going side-by-side with their civilian 
friends, and if they attended school on-base, DOD would ensure 
a quality education.
    However, here is some of what our children must face, 
especially as they enter the high school years. Our high 
schoolers must juggle sometimes conflicting state-to-state 
requirements for course transfers and graduation. Also, we have 
difficulty getting access to educational programs, such as 
classical schools or specialized instruction for learning 
challenges. In addition, it is extremely difficult to get in-
state tuition at our nation's land grant colleges for military 
dependents graduating from high school outside their parents' 
home state.
    These issues--housing, daycare, commissaries, health care 
and education--are just the tip of the iceberg that impact the 
quality of our lives every single day.
    In the spirit of time and because I want to get to your 
questions, I did not mention a lot of other factors that impact 
our families. Some put real pressures on the military families, 
like pay and long and numerous deployments for ourspouses.
    On the positive side, there are programs like family 
support centers, teen centers, our officers' and enlisted clubs 
and our base exchanges that enhance our lives and morale.
    We choose our spouses, but not the military, but it is 
definitely a packaged deal. I am proud of my husband, to say 
the least. If I can help you to understand the issues that most 
affect us, to see into the window of our lives and make a 
positive impact for the spouses of the Air Force, I can go home 
proudly to Pope Air Force Base.
    I have a voice, and I have a vote, a privilege gained 
through our outstanding military. But I do not have what you 
have been entrusted with, and that is the resources to make 
changes.
    It is a true honor to address this committee. Thank you, 
Chairman Hobson, for your past support for military quality of 
life requirements, especially overseas.
    I would like to thank the committee for your positive 
actions for pay, compensation and military construction 
programs that allow the Air Force families to have a good 
quality of life.
    Thank you.
    [The prepared statement of Kathleen Plyler follows:]
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                           Self-Help Centers

    Mr. Hobson. Well, let me thank all of you for being very 
forthright with us. This is very important, and I really 
appreciate your comments, and I know the other members do also.
    What we face today is that most people in the Congress 
today have not served in the military, so they have not lived 
like all of you live. Many of them have not visited the bases 
yet. One of the things we are doing is going around trying to 
acquaint members with the things that you face, but hearing it 
from you, I think, reinforces the problems that we have.
    So I appreciate your courage in coming today. I appreciate 
the courage of you stepping forward in the article in The 
Washington Post. Those are not easy things to do, because those 
are not daily occurrences. For people like us, you know, that 
is what we have to do all the time. So I really want to thank 
all of you for doing that.
    I was going to ask a question about housing, but you have 
all gone through that pretty well. [Laughter.]
    And I have another one that is a practical question that, 
you know, sometimes it is the little things that really are 
upsetting in your lives. You can deal with some of the big 
picture things. But one I heard about the other day, I wanted 
to talk to you about a little bit, not because I am a very 
handy person, as my wife will tell you, but I can tell you what 
a problem this could be.
    I want to talk about the self-help centers, because I 
understand that there have been some changes in that, and maybe 
we can nip something in the bud, if we can, that is going on. 
And it is something that we probably do not normally get into 
in our funding. But I sit on the other committee too, and I can 
ask more questions here than I can in the other committee, 
because I am the chairman here and I am not the chairman over 
there.
    But tell me a little bit about, one, what the self-help 
center is, because I imagine many members do not know and; 
second of all, how helpful it can be or not be; and what is the 
transition that is happening all of the sudden. And if it is 
not happening at your facilities or what you know about, tell 
us that too. So we will just go down the line again.
    Mrs. Riley. The self-help center falls under the 
engineering department within the Army setting, and it supports 
those families who are living in quarters on post. It provides 
them supplies that they need to upkeep their quarters, their 
yards. And it is at no cost to the individual. There is a cost, 
of course, but it is paid for by the Army as a personnel saving 
measure.
    What is the benefit of it? In our communities, using self-
help supplies, we can upkeep our yards, keep our community in a 
desirable-looking state.
    A benefit to the family members, we have military who 
travel, who are transient and move from place to place to 
place. Can you imagine packing up your lawnmower, your edger, 
your weedwhacker? It gets to be quite expensive.
    When you move into the new quarters, where do you put all 
of these things? Storage areas may be the size of a clothes 
closet, so you do not have the required storage area available.
    The self-help supply center is a very dependable and 
reliable source for family members to keep up their quarters in 
the way that they should be.
    There are many installations all over the Army that are 
deciding, because of cost to close those operations. That puts 
more of a burden on military families, Army families, living in 
those quarters, at personal expense to upkeep the quarters and 
the yard.
    Currently, in Europe, we have limited inventory lists. We 
do still have self-help, so our soldiers in those quarters are 
able to get supplies, but the inventory is dwindling. And I 
would assume that, as the cost of maintaining self-help stores 
is rising, that is why our inventory is dwindling.
    Mrs. Turgeon. I have to admit, my experience is with 
personal residences, so you are looking at the yard person from 
my home. I do edging, I do trimming of hedges, I do lawn 
mowing, I do clean-up, all of those types of things. But I am 
very happy to say that this will be the first summer in five 
years that my sailor will be home, so I am very happy to turn 
those duties over to him. [Laughter.]
    Mr. Hobson. He is smiling now. [Laughter.]
    Mrs. Turgeon. He kept telling me, when he was on 
deployment, that he would much rather be cutting grass in 90-
degree weather, so this is his chance. [Laughter.]
    Thank you. I will defer.
    Mr. Hobson. Mrs. Mills?
    Mrs. Mills. The self-help center has been a good resource 
for us, especially within our new quarters unit.
    We have fluorescent light fixtures throughout, and as you 
know, sometimes the fluorescent bulbs in government fixtures 
are sort of hard to find. They do provide those. And they 
provide grass seed.
    There is a limited amount of equipment. The lawnmowers and 
edgers and that type of thing, I believe there are probably 
maybe two for the entire base. Do not quote me on that, because 
I am not real sure. But I know, sometimes the equipment is very 
difficult to get.
    But the little things, like ice-cube trays and thingslike 
that, that would really break a budget, kind of nickel-and-dime you, 
sometimes you can get through self-help, and it is a very good thing.
    And they have recently expanded the hours at Quantico, 
which is very helpful to us. They are now open on Saturdays, 
rather than just from 7:30 to 2:30 during the week.
    Mrs. Plyler. We used those while we were in Korea, and they 
are a big benefit to the housing, because, again, it is 
difficult to find the right kind of light bulbs and such off 
the economy.
    So there is a big rush when we find out that the flowers 
are coming in. Everybody rushes right on down there, to make 
our housing more attractive. It is a big player. It is a very 
helpful benefit.
    Mrs. Riley. Chairman Hobson, I would just also like to add 
that self-help centers, within the Army, service not only the 
families in the quarters but also the soldiers in the barracks 
and some of their offices. So it does play in the very big 
picture, not just with families.
    Mr. Hobson. Well, I know it is not a big deal, but 
sometimes the little deals are the final breaker when you go 
through all of the other things. And so I thought that was kind 
of a practical thing.
    I will go to my ranking member.
    John, do you have a question you would like to ask?

                            QUALITY OF LIFE

    Mr. Olver. Thank you very much.
    I will be very brief here.
    I would like to ask you, Mrs. Riley, if you would draw out 
your circles of influence, on the issues of quality of life. I 
was jotting them down, and I am very much a pictorial person. I 
would like to see that in actual concentric circles with what 
you chose to put into each one, because I am not quite sure 
whether I would visualize it the way you have done so. That was 
an eloquent help to me.
    In each of the cases, there is a point that will stick, or 
maybe several points; I can go back to the testimony at a later 
time.
    I think you, Mrs. Riley, have very much corroborated what 
we think we know about the level of housing overseas. With what 
you indicated about having been in, virtually, the same house 
with not much in the way of change that had been done between 
1955 and 1987, and that house is still there. That is pretty 
poignant, I would say, which is not to say that housing is 
great stateside. Housing is spotty on stateside, too.
    Mrs. Mills, I was particularly struck by your itinerary in 
housing, your odyssey, essentially, in housing, from poor to 
good and then back to poor and then back to something that was 
at the other end of the scale, up and down as your deployments 
change. It certainly speaks to the spottiness of how that 
works.
    Mrs. Turgeon, your comments about the employment and the 
possibility that people, essentially, take advantage. You are 
at the mercy of a large number of people being present and 
available, and so the wages go down when you are looking for 
jobs in the kind of situation that you are in at a large base. 
That is a very significant thing.
    And the comments you made, Mrs. Plyler, about the 
transferability of credits. That one thing, I am not sure what 
we can do about it specifically. We ought to really try on the 
issue of in-state tuition for people who have graduated in 
other than the state of their parents' primary residency.
    Those are valuable things that I take away, among all of 
them, a little portion from each one. And I very much 
appreciate the testimony that you have given.
    I have no specific question, other than the request for the 
circles. [Laughter.]
    Mr. Hobson. And John likes maps, too, so if you have a map, 
you can give us that.
    I might add that, in my state, I think we have made some 
changes on the transferability into the state, relating to 
people from out of state.
    The other thing is, if you join the Guard in my state, we 
will pay 100 percent of your college to a state school, and we 
will donate, also, to a private school within the state, if you 
go to the school.
    And there are a number of states that do that, so I think 
it is something that people can look at. I wish we would have 
had it when our kids were young.
    Robert Aderholt, do you have a question?

                            COMMUTING COSTS

    Mr. Aderholt. Thank you for being here.
    I just want to follow up on a couple of things for those of 
you who have been stationed here in the United States.
    First, we realize that there are a lot of areas where there 
is a very high cost of living. And because of that, our 
understanding is, any military family has to live great 
distances from the workplace of the member who is actually in 
the service.
    I just want to get your thoughts on that and what 
accommodations are given for that, as far as the compensation, 
as far as the commuting costs, what the downside of that is and 
how we might address that.
    Just anybody who wants to address that.
    Mrs. Mills. I am not shy.
    Mr. Aderholt. Go ahead.
    Mrs. Mills. Military pay is military pay is military pay. 
Whether we live in San Diego and my husband has to drive an 
hour and a half to get to work or whether we live in Quantico 
and he drives five minutes to get to work, it does not make any 
difference in his paycheck.
    Mr. Aderholt. Thank you.
    Mrs. Turgeon. We also have the experience, in Hampton 
Roads, that my spouse is driving from Virginia Beach to Newport 
News, which can be over an hour each way. That is two hours of 
his time every day that is not figured into his service, no 
compensation.
    Mrs. Riley. That was going to be where I was headed with my 
response, was that it may not be calculated in a monetary cost, 
but it is a cost to the family. It is time that the 
servicemember is away from his home, not reimbursed in monetary 
form. The family sacrifices, and often just the physical state 
of being for the servicemember also suffers with that amount of 
traveling. And I am sure you all can relate to that.
    Mr. Aderholt. Yes, I was going to say, we in some way can 
relate to that because of the nature or our job as well, but we 
understand it is completely different in some respects.
    That is all I had.
    Mr. Hobson. Mr. Walsh.

                    Communication during Deployments

    Mr. Walsh. Thank you, Mr. Chairman.
    Thank you very much, ladies, for your testimony.
    It strikes me that one of the most important decisions that 
any soldier could make is to marry a smart spouse to make all 
of these things work while they are away. [Laughter.]
    It really struck me, in this discussion.
    And I noticed a lot of nods and knowing smiles from the 
others behind you as you were speaking, so I think you were 
well-chosen to represent them.
    I never served in the military. I was a Peace Corps 
volunteer. But I did spend two years in ROTC in college, and 
your comment about the arrows at the commissary struck me that 
the military always gave me more information than I needed and 
the Peace Corps never gave me enough. I am not sure which is 
better.
    But I do admire you and your spouses and thank you for the 
service that you provide to our country. Obviously, you make 
sacrifices, they make sacrifices, and that is what makes it 
work.
    Just one question, and by the way, I think that these two 
gentlemen, Mr. Hobson and Mr. Olver, do a remarkable job, and I 
think they brought your plight to the forefront more than at 
any time in my experience in the Congress. And I think they are 
doing their level best to resolve some of these issues. And we 
would, I think I can speak for some of the members here, that 
we would follow them anywhere on these issues.
    You know, the transitory aspect of your life, where you are 
here and there and everywhere and your spouses may be here and 
there and everywhere in different places than you, I just 
wondered if there is anything that the military provides you or 
that you would like, in a perfect world, to help you to 
communicate not only with your spouses while they are away from 
you, but also with the people that you have met in these places 
around the world and around the country?
    Are there any services or, in this age of global 
communication, are there any things that you would have or that 
could be provided that would help with that?
    Yes, Mrs. Plyler.

                   PERMANENT CHANGE OF STATION MOVES

    Mrs. Plyler. I think making our moves easier, one thing 
that could be done is they could fly our active duty spouse, 
pay for their plane ticket, perhaps, to go forward and find 
out, first of all, if housing is not available on-base, and 
give him an opportunity to look for nice housing. With the 
Internet now you can take pictures of the home, one can send it 
back to his wife and say, ``Well, how does this look?'' so you 
can kind of form a decision on housing.
    And then you could do a door-to-door move. I think a door-
to-door move would be a very nice thing to do, because it is 
very stressful to move a family, hold them in a one-bedroom 
apartment or temporary quarters. While you are looking for 
houses, you pack all of the kids into the car, and you go from 
this house to this house, and those kids are ready to take the 
first one they see. [Laughter.]
    So it would be very nice to be able to do door-to-door 
moves, and any help in that area would be very greatly 
appreciated.
    Mr. Walsh. Thank you.
    Mrs. Riley. I will just give you an indication of what we 
have in place, especially in Germany. It is critical when our 
spouses are deployed downrange to Kosovo and Bosnia.
    I was visiting an ACS, Army Community Services building, 
and happened to walk into the video-teleconference room. And a 
family, a wife and her two children, young children, were just 
breaking out of a session that they had had with their soldier 
downrange. They had just celebrated one of the children's 
birthday parties on this video-teleconference, and the smiles 
and the tears, it was just quite moving.
    So we have things in place to connect us with our soldiers 
when they are away from us. And Internet is wonderful as well.
    Mr. Walsh. Another gift of the military.
    Thank you.
    Thank you, Mr. Chairman.
    Mr. Hobson. Thank you, Mr. Walsh.
    Mr. Farr, another Peace Corps ex.

                      ON BASE HOUSING VS. OFF BASE

    Mr. Farr. I identify with trying to figure out what kind of 
food to buy in foreign countries. You do not even know how to 
cook it, much less eat it. [Laughter.]
    Just think if you have never seen a banana and did not know 
how to eat it. Would you cook it or know how to peel it?
    Thank you very much, Mr. Chairman. I really appreciate you 
bringing in the best support system that the United States 
military has, which are the families, so that we can really 
listen to them.
    And also, I would like to acknowledge that I think 
somebody, other than yourself, might have had something to do 
with that. Your wife, Mrs. Hobson, is the first lady of this 
committee, and she is always remindful.
    I think, you know, members of Congress are deployed. We are 
deployed from our districts to come live here. And you know, I 
have just had to scramble, find a place to live and realize how 
expensive it is to buy bedsheets, towels. I just figured it 
out, it is about $25 a square foot if you have to buy 
everything. And nobody helps you here. We do not have any of 
these kinds of services.
    So what I am really interested in is, how much of this sort 
of quality of life is putting more money in the right places? 
But there is also using money more smartly, just getting a 
better bang for the buck.
    A few hearings back, we heard that the majority of soldiers 
would rather live off-base than on-base. That always shocked 
me, and I wondered if there is a reason, if you could explain 
that.
    I would also like your thoughts that there is a certain 
quality of life that the military families get that, frankly, 
the civilians do not get. You all talked about the medical 
care, the access to housing when you have it and the proper 
housing and childcare. Those are some things that even your 
civilian counterparts do not have as easy access to.
    Are there things that also more beneficial, being in the 
military, than your civilian counterparts find? I would just 
like to hear your comments on that. And the on-base, off-base 
housing, and what are the better parts? What are the attractive 
parts of military living that we might be able to focus on to 
get a little better bang for the buck?
    And also, I was thinking, we closed a big military base in 
my district, and the debate was over closing the commissary. 
The big debate that got into that with Costcos, you know, we 
had commissaries before we had Costcos. And itseems now that 
Costcos have replaced commissaries in a lot of communities or have 
offered them in communities that never had them. I wondered if, where 
you have access to those kinds of things, whether they are beneficial 
to you.
    Mrs. Mills. I would like to speak first on the intangibles 
that go along with being a Marine wife. There is a sense of 
family within the Marine Corps, that once you have been a 
Marine, you are always a Marine. Whenever we are on leave, 
whenever we go home to visit, no matter where we are, someone 
will see my husband and say, ``You are in the Marines, aren't 
you? I was a Marine once.'' And all of a sudden, we have more 
family members. It is a family, and living aboard the base 
makes it even more so. It is a very good support structure.
    I think the reason why you have people who prefer to live 
off-base is because of the condition of the housing and what we 
have to put up with as far as square footage. There are no 
garages. We have a driveway that will hold one-and-a-half 
vehicles.
    You know, we have been married for a while. We have 
collected a few things. We have a camper and a truck and a 
vehicle, a car. Two of those have to be parked in the street 
because we do not have a place for them.
    So it is little things that make the difference about 
living aboard the base. However, like I said, I trade that off 
because my daughter is in a DOD school, and the education she 
is getting, for me, is worth those sacrifices that we make.
    Mrs. Riley. For many families, it has been my experience as 
well, it is a deliberate choice to live in housing that we see 
as not up to the standards of our civilian counterparts. And we 
choose that because of the connection, the community 
connection, the community support. We are around people who 
live our lifestyle, who understand. Their kids go through the 
same school and concerns. It may be California. It may be 
Louisiana. It may be wherever, but it is for the sense of 
community that we get immediately there, wherever that 
community is located. It is universal. It is an immediate sense 
of community.
    There are families that choose, they decide it is time for 
a better standard, structure of the house, so they choose to 
live off-post.
    For us, it has definitely been the support we get in the 
community and not the housing.
    Mr. Farr. Why do you think the housing off-post is better 
than the housing on-post?
    Mrs. Riley. They are maintained better. They may be older 
homes. They could have been built in the 1930s, the 1950s, the 
1960s, but they have just been maintained better. The private 
industry or the private owner has money that is put into 
routine, continual maintenance.
    Mr. Farr. How about design of the house, the layout? A 
military house is, you know, one-size-fits-all.
    Mrs. Riley. Well, most military families have large 
families. In our tours, we have squeezed two of our four 
children in a nine-by-nine bedroom. One assignment, you could 
have a very large home and you could be very comfortable and 
have what you feel is commensurate to the civilian community, 
and then the next home you live in, you have to get very 
creative.
    You take a closet, take the doors off and you put the 
office desk in that, so that you can have space in the room for 
your family to sit on the couch and watch television at the 
time. My kids have shared the ``office'' and computer in the 
room where they have the bedroom. You get very, very creative 
with your square footage. Every little inch counts.
    Mrs. Plyler. The cost of living off-base, as I stated, we 
pay $600 out of our pocket. There was no housing available on-
base when we came to Pope, so we made the choice to go off-
base. We were allowed about $900 for housing. We had the 
realtor say, ``Well, let's go look at $900 houses for rent.'' 
Now, that does not include our utilities, electricity or any of 
those other things.
    We drove into neighborhoods that had parked cars in their 
front yards. Washer machines were, kind of, strewn around. And 
I said, ``I do not think I can live here. Thanks, but we will 
go to $1,000 a month.''
    So anyway, we finally found a rental. And by the time we 
found a rental that was in a safe community that we felt good 
about living in, we were paying $600 out of our pocket, and 
that does include our water and our electricity.
    And so I thought, ``Well, perhaps this is a little high.'' 
So when we were at a squadron picnic on Saturday, I went around 
and asked the people who lived off-base, ``How much do you pay 
out of your pocket to live off-base?'' The least was $450 out 
of their pocket to live off-base because there was no base 
housing.
    Now, there are some people who choose to live off-base 
because when they get off of work, they want to leave the base 
and go home. So there are people that choose just because of 
that.
    But most people do not enjoy paying that much money out of 
pocket to live off-base, but that is the way it is.

                           SPOUSE DEPLOYMENTS

    Mr. Farr. Let me just ask one other question. We are all 
going to go to vote pretty soon.
    There is a question that the staff asked, and I thought it 
was very interesting. When your spouse is deployed, what is the 
thing, tangible or intangible, that you need the most at home?
    Mrs. Turgeon. The thing that would be most helpful to me as 
a spouse is to know that my husband's country is supporting him 
and supporting the efforts of his command, unquestionably. The 
flags should by flying in this country when our folks are 
forward deployed. That would be the most helpful to me.
    Mr. Farr. The moral support.
    Mrs. Turgeon. Absolutely, that I am not alone.
    Mrs. Mills. I would like to second that as well.
    Plus, I think security. She brought that up. We need a safe 
environment, and that is one of the reasons why we choose to 
live on-base, as well, is because of the safety and security of 
our home.
    If my husband is out in the Med for six months, and he is 
not assured of the fact that I can come home after dark and be 
safe on my own front porch, then that is going to affect his 
job performance while he is on that ship.

                                DAYCARE

    Mrs. Plyler. I see daycare as being a very important issue, 
because when dad is not home, sometimes people look forward to 
dad coming home and saying, ``I am going to go take a walk.'' 
And when dad does not walk through that door, mom does not have 
that break.
    So hourly daycare, is very important, if you need to go to 
the doctor, if you have an appointment of any type, if you need 
to go close on a house. I closed on our house by myself because 
my husband was gone. I needed to have daycare. Idid not need my 
kids running around as I was sitting there closing on my house. Daycare 
is a top issue for our families.

                     EXPEDITIONARY AEROSPACE FORCE

    Also, on deployments, the Air Force has initiated the 
Expeditionary Aerospace Force (EAF) concept. There are ten 
Aerospace Expeditionary Forces (AEFs) available to meet 
national security requirements. Two AEFs are scheduled at any 
one time for deployments to cover a 90-day period every 15 
months.
    Mr. Farr. That is the Air Force?
    Mrs. Plyler. That is the Air Force.
    So they are gone for three months every 15 months. And 
although we do not want them to be gone three months--a month 
would be nice, a nice amount of time--but three months, if you 
know ahead of time that your husband is going to be gone for 
three months over the summer, you can start making plans. And 
so it is nice to make plans. And if you know they are going to 
be gone over Christmas six months ahead of time, you can start 
making plans for your family six months out.
    This is a great program in the Air Force, and it is very 
helpful to our families.
    Mr. Farr. Mr. Chairman, I have a question of you. I was 
just shown a demonstration of the Logistics Command in the 
Navy, of how they specialize in taking every ship that they 
have and knowing whatever cargo it can hold and how to 
essentially load it really quickly and unload it, knowing all 
the limitations. Why can't we use that same Logistics Command 
to plan for people to move around in housing? We know what 
every house in the military inventory is. We know when it will 
be vacated. We know what kind of family can fit in it. Why 
couldn't we use some of that great military intelligence to 
deal with military moves?
    Mr. Hobson. I am going to ask the question, when we do the 
next round, about the transportation, when you pack up and when 
it gets there, because I have had people complain to me about 
the way it arrives and things of that sort.
    But I want to get Chet in, and then there are other 
members. And then we are going to have, just so you know, we 
are going to have two votes, one will be a 15 and one a five. 
So maybe if we can take a little time here and then we can 
complete this a little bit and then we will come back.

                                CHILDREN

    Mr. Edwards. Okay. Let me just say very quickly, because I 
could never say it eloquently enough, thank you for you and 
your families' service to our country. I am privileged to 
represent a military installation at Fort Hood in Texas, and I 
see on a regular basis the sacrifices our families make. And if 
political spouses deserve gold medals, military spouses deserve 
platinum medals for the service you provide our country.
    Let me also say, your being here today, I think, is 
terribly important. I have been in Congress 10 years, six years 
on the Armed Services Committee, four years on this 
subcommittee. This is the first time I can recall that a 
chairman of a subcommittee or full committee asked military 
spouses to come testify. And I want to commend you for being 
part of this and Chairman Hobson for making this hearing 
possible. And I think this news will spread throughout other 
parts of our Congress.
    With limited time, if your children were here today 
testifying, if you were not, but your children were here, what 
would they say were the most difficult aspects of being part of 
a military family?
    Mrs. Mills. Would you like for my daughter to say 
something?
    Mr. Edwards. She is here. [Laughter.]
    She says it is okay. This is a rare treat, a daughter 
saying mom speak for her. [Laughter.]
    Mrs. Mills. It is unusual, isn't it. I think she seems to 
be flourishing in the military lifestyle. She, of course, 
doesn't like it when her friends have to move. But over the 
years, it has been proven that when one friend moves out, 
another friend moves in.
    And it has been quite the adventure. There is a lot of 
education that happens with moving around to different places, 
and there is a richness in her education and in our lives that 
we would not have if we had not have had that opportunity.
    Mr. Edwards. Any difficulties that we could address through 
appropriations in Congress that directly impact your children?
    Mrs. Mills. The DOD school thing is very important and the 
making sure that the work she does in school in Virginia 
transfers when she goes to school in California or she goes to 
school in Germany or she goes to school in Okinawa. That is 
important.
    Mr. Edwards. Good. In fact, let me urge you, if you can, to 
take the initiative to write letters to the Labor, Health and 
Human Services Appropriations Subcommittee that funds the 
Impact Aid program. It is about a $1 billion program now.
    Looking at your typed comments, your focus on education is 
important. That is a crucial program. And I think individual 
letters from military spouses would mean far more than any of 
us testifying before that subcommittee.
    Any others of you, comments about sacrifices, what has been 
most difficult for your children.
    Mrs. Turgeon. Well, I would just like to add in, if there 
was any other opportunity or time that you would like to see 
spouses here in Washington, I am sure we could arrange that.
    Mr. Edwards. That would be great.
    Mrs. Turgeon. I would be very happy to come back and state 
our case. If it makes a difference for our junior personnel and 
their spouses to make the decision to stay in this 
organization, I would do it every day of the week.
    Mr. Edwards. I wish we could find a way to change the 
culture of Congress and the military in a way that military 
spouses felt comfortable on a regular basis just writing a 
letter to their respective members of Congress rather than 
waiting for you to be invited. But I think your being here is 
very helpful.
    Mr. Hobson. Well, let me make a suggestion. I think on all 
the bases--and you can spread this throughout the military--you 
ought to go and talk and invite the congressperson from that 
district on a Saturday morning--it is pretty hard for all of us 
to turn down a Saturday morning for coffee--and lay out the 
problems that you see to that member of Congress, whether they 
are on one of these committees or not. Because, you know, 
McCreary was here. He obviously knew who you were and knew you 
were going to be here. And he can come to one of us to talk to 
us.
    So I think it is important not just to network here, but 
network some of these members that are not on our committees, 
so that when we put these things up, like when I do overseas 
MILCON, instead of getting my head bashed like I did before, 
people will say, ``Hey, that is a good idea. We ought to do 
that. We ought to take care of these people so they do not have 
to live on the top floor with one bathroom and walk all the way 
down to these crummy basements to do their laundry.''
    I have been in them. Did not live in one, but I lived in 
France for a year in a barracks in 19--well, a long time ago. 
[Laughter.]
    I want to get Virgil's question in. And then we are going 
to have two votes. And I am not going to ask you to stay for 
that, but I want to say something after Virgil is finished.
    Virgil.

                               COMMUTING

    Mr. Goode. Thanks to you for holding this hearing. And I 
thank all the spouses that have attended today.
    I wanted to ask Ms. Turgeon, she said how long it was 
taking to go from Newport News to Virginia Beach. Has the new 
highway construction not helped that down there? I used to be 
in the Virginia legislature, and that area continually got more 
money, and they said it was going to greatly help, and 
apparently it has not.
    Mrs. Turgeon. I have lived in Virginia Beach for six years, 
and if you take four aircraft carriers in port, and 30 percent 
of the surface support ships in port, all of those people are 
commuting to work in one direction. And then, at 3:30 in the 
afternoon, they all commute----
    Mr. Goode. And they all go through the tunnel.
    Mrs. Turgeon. Everybody is going through a tunnel.
    Mr. Goode. The bridges further up the river, they are just 
not being used.
    Mrs. Turgeon. I do not know what the answer to that 
question is. I think maybe some insight as to why we are living 
so far away from where my spouse works is in order.
    For us to be able to continue to live in that community, 
for me to keep my job, for us to keep from having to sell our 
home, my spouse took a billet at another seagoing command. So 
when it was his turn to go on to shore duty, which is, you 
know, the positive aspect, you spend so many years at sea and 
then your reward is you get to spend so many years at a shore 
billet, we made the decision as a family not to do that, so 
that we did not have to leave Virginia, knowing the consequence 
was going to be for the next three years he is going to commute 
over an hour each way to work. So shore billet, sea billet, it 
did not make a difference.
    Thank you.
    Mr. Goode. Thank you, Mr. Chairman.
    Mr. Hobson. Well, thank you very much.
    Mrs. Riley, John would like me to put your drawing into the 
record, if you do not mind. [Laughter.]
    So we will do that.
    [The information follows:]
    [GRAPHIC] [TIFF OMITTED] T4873B.021
    
    Mr. Hobson. Again, this is very helpful to all of us, and I 
appreciate what you said to us today. If there is anything you 
think about later on, feel free to come back and tell us.
    But I think it is important that we do things also at the 
grassroots, that each of you, within the communities you live, 
get those people on the base, let them see what the quality of 
life is on the facilities here in this country, which need a 
lot of work. And we are trying to do that through some 
privatization efforts, because we do not have enough MILCON to 
do it.
    We are trying overseas, and I would encourage you to also 
talk to the Senate and other members about overseas MILCON. 
General Ralston has made it his number one priority. Admiral 
Blair was here yesterday; it is his number one priority. So we 
are all trying to work on it.
    And I am going to go to a luncheon, after we have the 
luncheon with all of you at noon today, I am going to lunch 
with the Secretary of Defense, who knows of this hearing today, 
and I will once again stress to him the quality of life issues 
that are out there.
    We are not going to hold you, because in congressional time 
it is only supposed to take 20 minutes, but it is going to take 
longer than that. So we are going to let you all go. And again, 
thank you for coming.
    We are going to have another panel start just as soon as we 
can get back, and we will try to complete that panel by noon 
today.
    So again, thank you all very much for coming in to testify.
    [Recess.]
    Mr. Hobson. I thank the members coming back. I think they 
will be filtering in and out again. We have a difficult day, as 
usual.
    We are going to try to stick to the five-minute rule, if we 
can, because I would like to be finished by noon, because we 
are going to have a luncheon for the spouses. And I am going to 
be there briefly, because I am going to go over and try to see 
how much of this I can talk to Secretary Rumsfeld about, at a 
luncheon with the defense appropriators. So we will see.
    I hope we did not embarrass your daughter too bad in the 
last hearing. [Laughter.]
    Having had children, I guess my kids really got embarrassed 
when I lost the first time for office. So that was the most 
difficult time. [Laughter.]
    They were a little better when I got appointed to the state 
senate about four weeks later.
    But we will start our second hearing as soon as I find my 
stuff here.
    Well, let me start by welcoming our next panel.
    Our second panel of witnesses today will include 
representatives from two organizations dedicated to improving 
the quality of life for our military families. We are very 
pleased to welcome General John H. Tilelli Jr., president and 
CEO of the United Service Organization, and Joyce Wessel 
Raezer, associate director of government relations of the 
National Military Family Association, to the subcommittee.
    General Tilelli retired from the United States Army in 
January 2000, after 37 years of service. His military 
assignments including commander in chief of the United Nations 
Command, Republic of Korea; United States Combined Forces 
Command. He also commanded the 1st Cavalry Division and 
deployed with the division to Operation Desert Shield and 
Desert Storm in October of 1990.
    General Tilelli became president and CEO of the USO in 
March 2000. The mission of the USO is to provide morale, 
welfare and recreation-type services to uniformed military 
personnel and their families.
    I might say on a personal note, we traveled with General 
Tilelli this year on the Secretary's trip to Germany, Bosnia 
and Kosovo. We did not talk a lot. He and I talked a lot, but 
the Dallas Cowgirls were more of a hit on the trip than the 
rest of us, to all the troops that were over there. [Laughter.]
    Joyce Wessel Raezer is an Army spouse of 18 years and 
mother of two children. She started her volunteer work with the 
National Military Family Association in September of 1995. The 
activities of the association revolve around programs to 
educate the public, the military community and the Congress on 
the rights and benefits of military families and to advocate an 
equitable quality of life for those families.
    Joyce received the association's Margaret Vinson Hallgren 
Award in 1997 for advocacy on behalf of military families in 
the association. She also received the Champion for Children 
Award from the Military Impacted Schools Association in 1998.
    I also can tell you, from my personal observations, that 
whenever there is a hearing, she shows up, and she is out 
there, and she stays and watches and talks to everybody in 
those hearings. So she really takes her job, in my opinion, 
very seriously, because I know who she is when I see her.
    In addition to our witnesses earlier this morning, this 
panel will continue the tradition of this subcommittee in 
focusing on the quality of life for our military forces. We 
look forward to hearing your observations, and thank you for 
your dedication to improve the quality of life for our military 
personnel and their families.
    John is not here at the moment, so we will just go and let 
you make your statements, and then we will each ask questions. 
And we will observe the five-minute rule, if that is okay.
    So, General.

               Statement of General John H. Tilelli, Jr.

    General Tilelli. Thank you, Mr. Chairman, members. Thanks 
for the opportunity to speak today on an issue that is very 
important to me personally and about an organization which I 
think contributes to quality of life.
    Before I start talking a little bit about the USO, let me 
digress a moment to the last panel.
    First, a qualifier, and I say this respectfully, that when 
we think about quality of life, we have to think about our 
single servicemembers also, and where they live and where they 
work. And the fact is, as you go around and go to Korea, as I 
know you are going, and go to Fort Hood, we have single 
servicemembers who are living in what I will call deplorable 
conditions for the way they serve our country.
    Secondly, and it was said, and I do not think we should 
lose sight of it, that quality of life is a readiness issue. It 
is just not a feel-good issue. It is not how we make our 
servicemembers and their families live, work; it is truly a 
readiness issue for the servicemembers who each and every day 
put themselves in harm's way for our country.
    Let me say two other things about the last panel. Lastly, 
we can never give enough credit to the military spouse, for in 
a real sense, they sacrifice their own personal aspirations and 
their children's stability, in some cases, to serve their 
country. And whether they wear the uniform or not, they are 
serving their country.
    And in my view, the business of caring for servicemembers 
and their families is an affair of the heart and a shared 
responsibility between this esteemed body and the Department of 
Defense.
    And I thank you for your interest and what you are doing to 
try to raise this issue to where it belongs. It is a very 
important issue, caring for the men and women who serve and 
their families, who also serve in many different ways and 
sacrifice more than we will ever know, because we cannot 
articulate that and we do not pay very much attention to it.
    Let me speak a little bit about an organization that on 
February 4 of 2001 celebrated 60 years of dedicated service to 
those who defend our freedom and our families: the USO.
    And I am pleased to tell you that, although the complexion 
of the USO has changed in the last 60 years, we are serving 
just as we did during World War II, Korea, Vietnam, Desert 
Storm, and today we remain a crucial part of the ongoing effort 
to improve the quality of life of our armed forces and their 
families around the world.
    In 115 locations around the world, the USO operates centers 
that extend the American people's outreach--and we say their 
outreach because primarily it is donor-funded--to our men and 
women in uniform and their families who are all too often and 
more recently left behind.
    In addition to that, we have mobile canteens that deploy 
with our servicemembers to places that many of us cannot findon 
the map or never want to go to unless we are forced to, and we provide 
that touch of home to those in the field who are on the brink of 
hostilities or in training.
    When I think of our men and women in uniform, I think that 
they are always in harm's way, not just during crisis. And I 
think of it in the context of many of the recent incidents that 
have occurred where a young man or woman serving our country 
has awakened in the morning and that afternoon thought that he 
or she would go back to their billets and go back to their beds 
and, due to some accident or incident, came home in a very 
different way than they expected.
    And I also ask myself, ``Can we ever do enough for their 
families and for them who serve so diligently, with character 
and courage and selfless service around the world?'' And my 
answer always comes up short, as far as I am concerned, that I 
can never do enough, nor can my organization do enough.
    So we are in the United Arab Emirates, near the DMZ in 
Korea, on Okinawa and mainland Japan and Tazar, Hungary, as our 
troops stage for duty in Bosnia and Iceland, France, Germany, 
throughout our great nation. We try to deliver America to our 
troops through the efforts of a very small staff and through 
the efforts of a magnificent group of volunteers, about 12,000 
of them.
    At each of our 115 locations, we adapt our services to meet 
the local needs of soldiers, sailors, airmen and marines and 
coastguardsman and their families.
    And to say, what is a USO center, to describe that, you 
would never see two that are identical because we try to 
accommodate the needs of not only the service men and women, 
but their families, in the place that they happen to be in.
    The simple truth, and I think you heard it on the last 
panel, that many who serve in our military, particularly those 
who we try to serve, the population between 17 and 22, face 
hardship and loneliness each and every day, and the 60-plus 
percent of those servicemembers who are married are often close 
to a marginal quality of life. And I think we as a nation and 
we who try to serve them should do and can do much better.
    While the USO cannot solve each and every problem, our 
flexibility and adaptability, coupled with our close 
partnership with the Department of Defense, has given us a 
track record when it comes to reacting quickly to wherever and 
whenever we are called for help.
    I will say to you, Mr. Chairman, and the members: We are 
committed to the USO's promise that we will deliver America. We 
will not wane. We only mature to match the necessities and 
interests of those in our military and their families. And we 
continue to do the best we can with the resources that we are 
given by the American people, the Congress and our corporate 
partners.
    Through the combined efforts of our Congress, coupled with 
the individual and corporate contributions, we have already 
impacted on the capability of the USO to expand its service 
delivery.
    For example, we are in the final stages of opening USO 
centers, family centers, at Fort Bragg, North Carolina, and 
Fort Hood, Texas, which in the United States are our two 
largest single military installations, where USO outreach will 
literally help hundreds of thousands of men and women and their 
families who sacrifice daily, deploy daily, to guarantee 
freedom and to protect the interests of our country.
    I have submitted a much more lengthy statement for the 
record, Mr. Chairman. I thank you for the opportunity, and I 
will be prepared to answer your questions upon conclusion of 
the next panelist.
    [The prepared statement of General John H. Tilelli, Jr. 
follows:]
[GRAPHIC] [TIFF OMITTED] T4873B.022

[GRAPHIC] [TIFF OMITTED] T4873B.023

[GRAPHIC] [TIFF OMITTED] T4873B.024

[GRAPHIC] [TIFF OMITTED] T4873B.025

[GRAPHIC] [TIFF OMITTED] T4873B.026

    Mr. Hobson. Thank you, General.
    Joyce.

    Statement of Joyce Raezer, National Military Family Association

    Ms. Raezer. Thank you very much, Mr. Chairman, and 
distinguished members of the subcommittee.
    NMFA wants to thank you for the invitation to join the 
expert witnesses you have had here today on the quality of life 
of military families. We are also grateful to you and the 
members of this subcommittee for your actions to improve the 
infrastructure of housing, family support facilities, such as 
family centers, child development centers, and Department of 
Defense schools. And we also appreciate your oversight of 
family housing privatization.
    Mr. Chairman, I have included a detailed written statement 
that I submit for the record on these quality of life 
challenges. The information in that statement has been gathered 
from families we visit, families who contact us, families that 
we talk to, and also from our volunteer NMFA representatives 
who are at many installations worldwide. One of our 
representatives is actually one of the spouses you introduced 
today, Cathy Whitcom from Korea. And we could not do what we do 
without that network of volunteers.
    Although housing privatization is not within the scope of 
this hearing, it is a high-priority issue for the subcommittee 
and for NMFA. We have supported the need for getting that 
private capital into military family housing, but do have some 
concerns, like the subcommittee, and we have outlined those in 
the written statement.
    I am a good military spouse. I always take advantage of 
opportunities, and the opportunity to list some of those 
concerns on privatization was presented to me.
    The spouses that testified today, their neighbors and the 
young families that these ladies mentor in the military 
community understand the importance of quality of life issues 
to the readiness of the force. They live the sacrifices asked 
of servicemembers and families, and they also know the 
tremendous pride in a job well-done and service to the country.
    These spouses have identified critical issues which must be 
addressed by Congress and the nation if a ready, motivated 
force is to be maintained: housing, our children's education, 
deployment predictability, and respect--respect from the nation 
for the sacrifices that are made.
    They talked about health care. Wonderful quality. I was a 
member of the federal advisory panel on the health care quality 
initiatives that has just submitted its report to Congress. And 
what we heard from beneficiaries was that quality was not the 
issue; it was access that was the issue. And you heard that 
today.
    We are concerned, however, about the impact both on access 
and quality of this estimated $1.4 billion shortfall.
    Housing. You heard a lot about housing. A lot of the 
reasons why families want to stay on an installation: the 
connection to the community, the safety when the member is 
deployed, the access to the support network that is available 
on the installation.
    When families move to a new installation, they often face 
two choices: Do we live in that substandard housing on the base 
to access the community and the support services? Or do we pay 
additional costs to live off-base so that we have a little more 
room, the yard, the garage, whatever?
    Congress has begun the process of buying down families' 
out-of-pocket costs, but BAH still only covers approximately 15 
percent of the average cost for the DOD standard that is set 
for each rank. And a lot of folks are probably looking at 
higher than this standard, and so they are having higher costs.
    We are also concerned that BAH is not responsive enough to 
deal with such situations as all the recent utility hikes.
    We look to privatization to help expand the housing base at 
installations where the community sector cannot meet the 
military family's need for adequate, affordable housing in safe 
neighborhoods with good schools.
    We ask you, Mr. Chairman and members of the subcommittee, 
that when you travel to Fort Hood and Korea or any other 
installation, that you not only look at the substandard housing 
on the base, but drive through the neighborhoods outside the 
gate at the end of the workday to see where all the folks 
wearing the uniform call home.
    You will understand Mr. Edwards' urgency about getting that 
privatization project up and running at Fort Hood. You will 
understand why so many families will sit on a waiting list to 
get into substandard housing on an installation, because it is 
better than what they can afford off the base.
    You brought up the relocation issue. Some of the spouses 
touched on that, too. This is a big concern for us and for 
families that talk to us.
    According to a 1999 DOD survey, military members spent an 
average of $1,100 with each move and are reimbursed at only 62 
cents on the dollar. The survey found that junior enlisted 
receive only 27 cents on the dollar for reimbursable expenses. 
Mileage rate and per diem have not been raised since the mid-
1980s. Military spouses are often denied state unemployment 
compensation when the servicemember receives PCS orders, thus 
the family loses valuable income just when it is facing 
hundreds of dollars in relocation expenses. Prospect that the 
spouse would have to give up a good job, often found with 
difficulty, as Darcie mentioned, may prompt a family decision 
that the servicemember should leave the military.
    You heard a lot about education. Today's military force is 
an educated force, and we place a high priority on the quality 
of our children's education. More folks are accepting or 
rejecting assignments, or even deciding to leave the military, 
based on their perceptions about the quality of schools at 
prospective duty station or about their child's potential 
difficulties in smoothing transferring into the new school 
district.
    Only about 15 percent of our children go to DOD schools. 
The rest are educated by civilian school districts, are home-
schooled or in private schools. So we need to be aware of all 
of the impacts on education, supporting Impact Aid, looking at 
some construction issues, and other things that affect these 
civilian districts. Special education funding has become a 
bigger and bigger concern in a lot of places for a lot of 
military families.
    Deployment support. Somebody asked about that. As 
operations, deployment, training missions continue at a high 
pace, the family's lifeline, their community, feels the strain. 
We are asking our ombudsman in the Navy, our key volunteers in 
the Marine Corps, family readiness group leaders in the Army to 
really shoulder a big burden, helping to take care of families 
when the servicemember is deployed.
    There are a lot of wonderful services out there provided by 
family support centers and family service centers in the 
services to help: e-mail, video-teleconferencing. And they work 
best when people deploy as units.
    We really worry about the people who deploy as ones and 
twos, and there are a lot of them, reserve component and active 
component. And we also worry about those folks that go on that 
one-year PCS tour to Korea.
    My husband has done a one-year tour to Korea, a one-year 
tour to Hungary in support of the Bosnia operation. The family 
support is much better for the folks in the high-profile areas 
than for these folks who have been going to Korea for years and 
years. It is just routine for a lot of folks, but not for the 
families.
    And so we need to do a better job working on communication, 
family support, reunion training for the servicemembers for 
when they come home, looking at the other kinds of support that 
is available in all those places.
    Child care. Very important for the readiness of the force. 
Big question out there: How do we maintain the quality and meet 
the demand without breaking the bank?
    We also want you to consider the community, because we 
heard, especially from the marine witness, how strong that 
community is. The community is part of our family. It is not 
just the bricks and mortar buildings of the installation. It 
has been the stabilizing force for military families as they 
cope with the military lifestyle.
    As more young people with families are recruited into the 
military, as families are separated by frequent deployments, as 
service housing strategies encourage an increased reliance on 
off-base housing, the importance of the military community 
increases. With changing circumstances, we may need to look at 
a changing definition of the kind of support needed by the 
community.
    NMFA believes, in terms of priorities, DOD and the services 
must first address what their own policies and procedures are 
doing to the community, things like recruiting young people 
with families and moving them a lot. What do these young people 
need to do the mission? Do they need more financial education, 
on-base housing, some help with relocation expenses, lower 
child care costs? What do they need?
    How do we impact our schools, both DOD and military when we 
put large numbers of military children in a small district and 
then move them in and out a lot? Do compassion assignments of 
special needs children put a lot of special needs children in 
one district because of the availability of medical facilities? 
What does privatization do to a school district? What does BRAC 
do to a school district?
    What is the impact of moves on spouse careers and spouse 
satisfaction? If the family is part of that decision on whether 
the servicemember stays or goes, spouse satisfaction is 
important, and we need to look at some career progression, 
maybe, for spouses.
    What are we doing to our volunteer base when we have 
increased deployment OPTEMPO and some of our changing 
demographics? And then how do we solve the health care problems 
that are caused by a lack of portability of the benefit and a 
lack of uniformity of the benefit?
    Yesterday in the Defense Appropriations Subcommittee, I 
talked about a spouse with whom I have been having an e-mail 
conversation, and I was reminded of it as Mrs. Riley was 
speaking, asking the question, ``Is it worth it?'' This was a 
lady who had a lot of problems getting proper services for a 
special needs child overseas. She finally did, but it took a 
lot of meetings and a lot of give-and-take, with her husband.
    And I asked the question at one point, ``If you knew what 
you know now about how hard it would be to get the services 
your child needs, would you have come to Germany? Would you 
have tried to make another decision for your family on how to 
handle this assignment? Was it worth it? Was all that you did 
worth it?''
    And I think her response will strike a chord with a lot of 
the spouses that came here today, because she said to me, ``To 
have not come to Germany, now that would have been a mistake. 
This has been a great experience for all my family. We have 
gone to Paris, Prague, Ireland, Venice. The doors of their 
worlds have been thrown wide open.''
    And then I asked her, ``Well, what about all those 
challenges?'' And her response was the typical military family 
response, ``We can accomplish great things here if we try.''
    So NMFA asks you, the members of Congress, to continue your 
support of military families' quality of life as you work to 
maintain a strong, ready military force. Retaining a motivated 
force is essential for readiness. Ensuring the highest quality 
of life possible for the service member in the work place and 
the family in the community is essential for retention. We can 
accomplish great things.
    Thank you.
    [The prepared statement of Joyce Wessel Raezer follows:]
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    Mr. Hobson. Thank you, Joyce. That was great testimony.
    I want to take a moment to do two things. I want to 
introduce Arlene Lewis, who is the spouse of our chairman of 
Defense Appropriations, since you mentioned that hearing 
yesterday.
    Arlene, would you stand up and be recognized? Thank you.
    And I also want to mention to the spouses that have come 
from Korea, if we have time here, and I am going to try and 
make time, if there is something you want to say since you have 
come a long way. Think about it. You do not have to, but if you 
want to, you can.
    With that, Mr. Edwards, you are up.
    Mr. Edwards. Thank you, Mr. Chairman.
    Ms. Raezer, General Tilelli, I thank you both for what you 
continue to do for quality of life for our military families.
    Ms. Raezer, if I could just compliment you, as you were 
speaking, I was also reading your testimony. I think the 
questions you raise on pages 11 and 12 of your testimony 
regarding the RCI program are very important ones. And I think 
those are the kinds of questions that do need to be addressed 
to ensure that this program guarantees quality housing for 50 
years, and not a one-year quick construction job and the 
developer gets out of town. And I hope that all those who 
oversee this program, including our subcommittee,will take a 
look at your testimony on that.
    Ms. Raezer. Thank you.
    Mr. Edwards. I think that is very good.
    General Tilelli, I just want to on a personal note thank 
you for your service, and your wife Valerie's service to our 
country. Your service as vice chief of staff of the Army and 
CINC in Korea--very proudly, I would say--your service as 
division commander, 1st CAV, those jobs and everything else you 
did for the Army added up to an incredible lifetime of 
commitment to our country. And we are a better world today 
because of you and your family's sacrifices.

                           Accompanied Tours

    Because of the testimony yesterday, General Tilelli, on 
Korea and the terrible housing problems there, which you worked 
on and now your successor General Schwartz is working on, I 
would like to ask you about that. And this is subjective, but 
at least I would like to get your best guess.
    I asked this question yesterday. The numbers are that 10 
percent of married families have accompanied tours in Korea. 
Given the fact there is apparently a good school system there 
for children, if we had quality housing for all the families 
who wanted to come as part of an accompanied tour, what percent 
do you think would go to Korea from its present 10 percent 
level?
    General Tilelli. That is a very tough question. Right now, 
when I left Korea, we had 94.5 percent that were unaccompanied 
and were on a one-year hardship tour. Those that were there on 
accompanied tour were generally those that you required 
continuity for the war plan, since--and we lose sight of that 
occasionally--it is a hostile area and it is an area where 
tensions can flare up. And there are other second-and third-
level effects that you have to consider when you consider 
moving more families there, such as noncombatant evacuation.
    In my view, if you made Korea an accompanied tour, you 
would have as many people move to Korea as you had places to 
move them into. It is an indictment.
    In a real sense, we have family members who are noncommand 
sponsored, especially younger family members, moving to Korea 
on their own personal passports and moving into little Korean 
villages where the quality of life for them is much worse than 
we expect for our servicemembers and their families. And they 
live outside the gates of compounds and bases, where 
servicemembers must be each and every night because of the 
potential for tensions.
    So you would have a large number. It is hard to peg it. I 
would also say, Mr. Edwards, from my perspective, the housing 
in Korea, even the housing we have for those who are there, is 
relatively substandard, not only for the single servicemembers, 
but also for the family members.
    It is old. It does not have what you would think they 
deserve. It is very small. There are long waiting lists. We try 
to maintain it the best we can, but it is not only the house 
itself, it is the infrastructure below the house that nobody 
thinks about when you talk about repair and maintenance.
    It is a tough issue. It is a very tough issue.
    Mr. Edwards. Right. It is bad enough that we ask families 
to live in bad housing. It is even worse, to me, that we ask 
them to be apart, when there could have been an alternative, 
for a year. I understand a Navy sailor on a ship for six 
months. That is a necessary sacrifice. But because we are not 
willing to spend the housing money necessary, asking families 
to live apart from each other for a year, to me, is 
unconscionable. And I appreciate what this subcommittee under 
the leadership of Mr. Hobson has done to try adding new 
additions to overseas housing funding.
    I will tell you what, let me defer. I have one other 
question, if I have time this day, but let me defer to the 
other members.
    Thank you, Mr. Chairman.
    Ms. Raezer. Mr. Edwards, could I follow on to that? The 
barracks issue is bigger than a single-soldier issue because of 
Korea. It is a family issue. It gets back to that respect.
    When I get an e-mail home from my spouse, who has a 
crumbling roof and leaky plumbing in a barracks, that is a 
respect issue. My family is living apart and the servicemember 
is dealing with this, and why is the country letting this 
happen?
    Mr. Hobson. Mr. Farr?

                              USO CENTERS

    Mr. Farr. Thank you, Mr. Chairman.
    We have a USO in our community on the Monterey Peninsula, 
but I never understood how it is funded.
    General Tilelli. That is a great question. USOs are funded 
primarily by individual and corporate donors.
    Mr. Farr. Are there any federal dollars?
    General Tilelli. The federal dollars that have started to 
come to the USO are for an endowment, where the corpus will not 
be touched and it will be used to, for lack of a better 
descriptive, help provide the programs and services to the 
troops overseas where we do not have a large donor population. 
So that is the only federal funding.
    Each and every year, and on the Monterey Peninsula, I know 
it very well, in states all around America, those USO center 
directors are out there beating the bushes for volunteers and 
beating the bushes for donors to help them keep their 
operations and programs going.
    When it comes to the overseas operations, we do that from 
here.
    Mr. Farr. But what I am curious about, what I have noticed 
since I have been in Congress, because of base closures more 
than anything else, is it woke up the local community that they 
really could not take the military for granted.
    And there has been a lot of interest in trying to outreach 
to the bases, essentially to pull down the fences and develop a 
relationship between men and women in uniform and the civilian 
community, by sharing base support systems like soccer fields 
and things like that.
    What I have found is that some of the discussion locally is 
that perhaps the USO in that community is out-served because it 
is not heavily used anymore, that there is a transition going 
on where the community is being much more responsible for 
serving the needs of the soldiers, which I think is going in 
the right direction.
    So my question goes to, is there a process for closure of 
USOs?
    General Tilelli. Absolutely, sir. We charter USOs from the 
world headquarters. If there is not a military population or a 
need for the community represented by the council member, 
council members determine that they no longer wish to have a 
USO or USO facility, and we absolutely close. We do not keep 
USOs open that are no longer needed nor that the community 
wants.
    An example of that is we just closed--and I say 
``just''because it closed yesterday, or it will close next Monday--the 
USO in Orlando, Florida.
    Mr. Farr. Yes.
    General Tilelli. And at the same time, we have had requests 
from Fort Bragg, North Carolina, and Fort Hood, Texas, where 
they desire USOs, where we have upwards of 40,000 soldiers at 
each installation, and at least two, two-and-a-half times as 
many family members.
    Mr. Farr. Well, that is the way it should be. Do you own 
the real estate or usually is it leased?
    General Tilelli. If we are off the installation, we most 
likely lease the activity, but normally we try to go on to the 
installation, put ourselves in the center of gravity where most 
servicemembers and families can use the activity, and in fact 
set up the programs the commanders want.
    In the cases of airports, where they are terribly overused, 
we generally lease those facilities or we in fact beg on the 
good graces of the airport authority because we are providing a 
service for our servicemembers, such as the one at BWI that is 
run by the USO Metro Washington, through donor monies, to use 
the facility and set it up where these young men and women and 
their families can go in.
    Mr. Farr. Is there a distinctive line drawn between what 
the MWR account can do for soldiers and what you can do?
    General Tilelli. I think there is a distinctive line in 
that we are a nonprofit center, and we try to provide 
everything we do for free. As you look at the MWR, it is a 
combination of profit and nonprofit centers.
    The other thing I will say, I remember the first time I was 
a young second lieutenant with my pregnant wife, landing in 
Frankfurt airport and not knowing how to say ``howdy'' in 
German. The one place I went to, and kids are still going to 
today, is the USO in the Frankfurt airport.
    So it is an adaptable and flexible and tailorable program. 
The holiday tour that we ran for the Secretary of Defense, 
where we took entertainers who volunteer their time to be with 
troops who are in under-served areas, it is a tremendous 
morale-raising issue.
    And we are not in competition with the Department of 
Defense MWR program. We are trying to complement them.
    Mr. Farr. I really appreciate the services you give. I have 
heard nothing but great things, and I can appreciate that young 
soldier. I was 16 when I got off the boat on the German side of 
the channel, and looking for a bathroom, and I looked a 
``Damen'' and ``Herren'' and I thought, well, ``Damen'' must be 
``the men.'' [Laughter.]
    General Tilelli. ``The men.'' Right. [Laughter.]
    Mr. Farr. I found out quickly that I went into the wrong 
one.
    General Tilelli. I make those 50 percent errors, too. Push 
or pull.
    Mr. Farr. I appreciate really both of you being here, and 
the chairman asking you to come. I think this committee is more 
than just about spending money on military construction. I 
think this committee really feels that we have an opportunity, 
a real estate opportunity, with bases, with federally owned 
land, and with the ability to deliver a package--you know, fill 
up housing, fill up apartments--to create, better than we have 
done historically, a more livable community.
    My personal feeling is that the most enviable places to 
live in the United States ought to be on bases, because we 
control all the factors, control the land, zoning. And instead 
of building government-style, we ought to be building enviable-
style, so that all those families are talking that they would 
rather live off-base would in a quick minute jump back on-base.
    And I think we have the knowledge from the chairman--from 
his real estate background.
    But all of that does not really work unless you have this 
quality of life intangibles that make being a stranger in a 
community less difficult. And I think that is what you do, and 
I really appreciate it.
    There are members of Congress probably who have a lot more 
in common with soldiers because we have left our homes. In 
fact, my wife in the last year, I said, ``How did we stay 
married for 34 years?'' She said, ``Well, you have been gone 
for 16.'' [Laughter.]
    But there is a lot of knowing what it is like to try to 
come in, even though you come with orders, essentially--you are 
elected to office--to arrive in this town. After you walk out 
of this building and nobody knows who you are, you are out 
there in the community trying to fend for yourself.
    I think we can really appreciate when somebody is out 
giving you a helping hand, and I want to thank you for coming.
    Mr. Hobson. Thank you, Mr. Farr.
    Ms. Granger?
    Ms. Granger. Thank you.

                          DEPENDENT EDUCATION

    First of all, to both speakers, thank you for your service 
and for being here. And to everyone who traveled, we really 
appreciate it. We can better help you when we better understand 
what you are going through, so we appreciate it. And I am sorry 
that everyone cannot be here. We all have numerous hearings, 
and so we are having to run in and out.
    I want to ask you a little bit more about education and 
some of the statements that you made about education. And I do 
not know how the choices are made and what is available.
    But particularly one of the things that you said in your 
written statement is that parents are frustrated because they 
do not understand how to navigate and make those decisions. And 
so I think, certainly, we can improve that. But can you give me 
a little more information about the problem?
    Ms. Raezer. Well, we as a country decided a long time ago 
that most education decisions are going to be made at the local 
level. So for a military family moving, say, from a DOD school 
in Germany, which is federal, to an assignment at the Pentagon 
where you are probably going to end up in Fairfax County or 
Prince William, a local school district which has its rules, 
following its state guidelines, which have different graduation 
requirements than the DOD schools, and then you move to Camp 
Lejeune in North Carolina, which is a DOD domestic school which 
has mostly the same rules as DOD. There is a different chain of 
command at every one of those schools. DOD schools do not have 
school boards. They are run by a bureaucracy with some parent 
input at the local school level and installation level, but no 
policy input.
    In a local community, you might have an elected school 
board. You might have an appointed school board. Who is in 
charge? So if families have a problem that cannot be solved at 
the school level, they do not know where to go. As theyare 
moving, how do they have an impact on policy decisions that affect 
their children--about graduation testing, for example--this high-stakes 
graduation testing. Accountability movement is a wonderful thing, but 
every state is coming up with a different set of guidelines and 
standards on how they are going to do it.
    So a child may take the New York regents exam when the 
parent is stationed as an instructor at West Point, move to 
Fort Irwin in California and have to take a different high 
school exam to graduate. That is part of the difficulty, is 
that there are not the standards. And so as our children move, 
is the school district A's civics course the same as school 
district B's government course?
    So especially as children are in high school, that is a 
problem. It becomes a big problem for special needs children. 
Every school district has a different definition of ``gifted 
and talented.'' And what a military parent will often find is 
they bring the records from the previous school district, and 
the school secretary or the gatekeeper, whoever it is, will 
look at you and say, ``Well, your child is not gifted unless we 
say they are gifted.'' And it may take a year to be tested, by 
which time you are leaving.
    Learning disabilities are an even bigger problem because 
there is a federal law, but there are different ways to 
implement it.
    So all of these are education issues, and the parents, 
because they are doing different school systems, do not know 
where to go to get their concerns addressed. And that is one 
that we deal with a lot, parents calling us, and we try to get 
them back into the proper chain of command.
    Ms. Granger. Thank you.
    Let me pass on my experience. I was a public school teacher 
for nine years, and you have great difficulties, but military 
families do a wonderful job. When the child of a family from 
the military came into the school, I knew it immediately 
because they were more mature. They adapted much more quickly. 
They fit into whatever environment they were in. They were 
really exceptional young people, and I always enjoyed having 
them in my classes.
    Ms. Raezer. And their parents are some of the most involved 
parents.
    Ms. Granger. Without a doubt.
    Ms. Raezer. I know, first day of school, when I take my 
child to school, it looks like half of the Pentagon is there, 
because there are all these uniforms, because we are involved 
parents.
    Ms. Granger. Right.
    Thank you very much.
    Mr. Hobson. Thank you.

                        Commissaries & Exchanges

    I just want to make a couple of comments. One of them is 
going to seem totally strange from what you have been talking 
about.
    Some people talked about the commissaries before, and I 
have never understood why the Air Force and the Army have a PX 
that has buying power, the Navy has its own, the Marine Corps 
has its own, and the Coast Guard has its own.
    I know the Marine Corps, I am told, has a little nicer 
stuff than some people, but what I do not understand is why 
they do not all get together and use their combined buying 
power to get cheaper costs. And I think that is something 
people ought to really poke at along the way.
    Ms. Raezer. Well, actually, Mr. Chairman, there is a 
hearing this afternoon on commissaries and exchanges with the 
Armed Services Committee. The MWR panel is doing a hearing, and 
probably some of those questions will be raised.
    Mr. Hobson. I do not know. I hope somebody does because it 
has been going on for a long time, and, you know, tilting at 
windmills is kind of hard sometimes.
    I want to thank you all for coming. We would like to finish 
this hearing by noon. I thought Chet had another question, but 
I guess he left. I did not see him leave. I was listening to 
what you guys were doing.
    Thank you for the work that you do.
    Mr. Farr. Could we just follow up with one last question?
    The thing that I am very curious about is these big box 
stores, the warehouse stores, the Costcos and Sam Clubs and 
things like that. As they develop, is there as much need to 
also have a commissary?
    Ms. Raezer. That is a good question for this afternoon, but 
from what we have been told by the commissary agency, for 
example, is that there is still, even in their surveys which 
are now including cost data from the Costcos, from the big 
warehouses, there is still a savings of 29 percent in 
commissaries.
    We also have to have them overseas. They are the sense of 
home. They are a big part of the sense of home when you are 
overseas, big part of the community. And so it is balancing 
that benefit. This is also a benefit for our reservists who 
come into train and can use the commissary. And you know, they 
may be in rural areas where you do not have a Costco. It is a 
benefit for our reserve community and it is also a benefit for 
our retiree community.
    Mr. Farr. That is a lot better benefit than it was. When I 
was in the Guard, I was not able to use it.
    Ms. Raezer. Yes.
    Mr. Farr. I want to ask, since I set it up, if any of these 
ladies that came all the way from Korea have a comment that 
they would like to make. You do not have to say nice things 
about the committee. What I really want to know is what we can 
change and what we can do, because we need to get to the 
luncheon.
    Mrs. Whitcom. You will have to hear my Georgia drawl.
    Mr. Hobson. That is all right. And please give your name.
    Mrs. Whitcom. Kathy Whitcom. My husband is operations 
officer in Korea. We have been there almost two years, but he 
was in Korea in 1982 unaccompanied, so I understand both pieces 
of the puzzle on that. Been in Germany twice and understand 
NEO.
    But in Korea, when General Tilelli is talking about the 
real threat, it is the only theater that I know that the 
spouses are issued gas masks. And so there is a real threat, 
and that is another reason that it makes it a little bit scary, 
you know, when you are there.
    And on the packet that we briefed, we showed about the 
single soldiers and the BOQs and the quality of life for the 
soldiers that is lacking in Korea. So we are also here to tell 
you about their story, too.
    And I hope that you all can come. Please come. We want you 
to see. Because every place needs money, and Korea is just 
another unique place that really needs some help. So we 
appreciate your time.
    Thank you.
    Mr. Hobson. Thank you very much.
    Anybody else? If not, we are going to adjourn the hearing, 
and the spouses are all invited to room 2226 for a luncheon in 
your honor.
    Thank you very much.
                                         Wednesday, March 14, 2001.

                         U.S. EUROPEAN COMMAND

                               WITNESSES

GENERAL JOSEPH W. RALSTON, U.S. AIR FORCE, COMMANDER IN CHIEF, U.S. 
    EUROPEAN COMMAND
LIEUTENANT COLONEL KENDALL P. COX, U.S. ARMY

                       Statement of the Chairman

    Mr. Hobson [presiding]. The committee will come to order.
    Today, I am very pleased to have General Joseph Ralston, 
formerly of Norwood, Ohio. I used to get kicked out of a 
swimming pool next door over there. But it is nice to have him 
here. And my mother graduated from the same college as he did. 
Now they are called the Miami Red Hawks.
    General Ralston. That is right. That is progress.
    Mr. Hobson. He is Commander in Chief of the United States 
European Command and Supreme Allied commander in Europe. He is 
our witness today to discuss the military construction program 
in the European theater.
    Since the fall of the Berlin Wall, there has been a 
considerable debate about the U.S. mission in Europe and the 
appropriate size of the United States commitment to this 
region. The debate continues, and I know that most members have 
opinions on the matter.
    But while the mission of troops in Europe is not the topic 
of this hearing, it is an unavoidable fact that the mission 
drives military construction budget requests--the topic we will 
discuss today.
    Everybody knows that a sizable contingent of Americans live 
and work in Europe. Personally, I believe we have a 
responsibility to provide them and their families with good 
quality housing, safe working conditions, in the same way we do 
troops stationed in the United States.
    Since becoming chairman of the subcommittee, I visited many 
installations in Europe, and I would like to share with you, 
for just a moment, some of the things I have seen.
    In Baumholder, Germany, I saw soldiers working in the rain 
and the mud because the vehicle maintenance facility, an old 
horse stable, was not tall enough to accommodate the vehicle. 
The parking lot is not paved either, and you have to crawl 
underneath it and pull out the oil pan in the mud and cleanse 
it.
    In Izmir, Turkey, I visited a school that is located 
directly across the street, which poses a security concern due 
to recent terrorist acts in the region.
    At Mildenhall, England, I saw a World War II-vintage 
control tower that is so low that air traffic controllers 
cannot see the flight line or the end of the runway. It was 
there when Winston Churchill was there. Airplanes were a 
different size and flying was a little different in those days, 
I imagine, than it is today.
    At Kaiserslautern, Germany, I toured a fitness center so 
inadequate that soldiers cannot shower in the same building in 
which they lift the weights.
    Likewise, I have seen extremely impressive sites. For 
example, the new Naples Improvement Initiative in Italy, which 
encompasses a revitalization of the installation at 
Capodichino, and the development of community support 
facilities that include a new housing complex, a child 
development center, a hospital and other facilities, is really, 
frankly, well-done and a nice project that we can be proud of.
    In Aviano, Italy, I have seen a small Air Force base grow 
into a state-of-the-art installation that is vital to the North 
Atlantic Treaty Organization (NATO) and the United States. And 
I have seen whole barracks renovations in a number of locations 
that are replacing the old barracks with gang latrines that are 
identical to the ones I lived in when I was in the service in 
Europe.
    Finally, I had the privilege to speak to young Americans 
stationed in Europe and have been taken by the fact that, 
regardless of the working conditions or living conditions, they 
are absolutely committed to what they are doing. They deserve 
our best efforts.
    I would also like to encourage everyone to read the 
extensive feature article in today's Washington Post which 
talks about military families. Among those quoted in the 
article was Lisa Rotte, the wife of an Army helicopter pilot.
    By the way, he was born near Cincinnati, sir. [Laughter.]
    She sums up her beliefs in this statement, which is very 
common among military families: ``You have to have faith. We 
have to have a good military, a bunch of good women and 
men.They are proud of what they do. Without them, we could not have the 
freedom and the prosperity we have.''
    So, General Ralston, I am grateful to know that you place 
military construction and real property maintenance funding at 
the top of the priority list, and look forward to hearing your 
testimony and engaging in dialogue with you about these issues.
    Mr. Olver, do you have anything you would like to say at 
this time?
    Mr. Olver. Just rather briefly.
    I thank you, Mr. Chairman.
    And I, too, want to welcome General Ralston, and thank you 
for taking the time to be here with us today.
    General, this is really a very important hearing for us, 
not only because of your distinguished career and the role that 
you play now, but also because there are few voices. The 
chairman has alluded to this. There are very few voices that 
are making a case for better living conditions and better 
working conditions overseas, for the men and women who are 
working for this country overseas in the armed services.
    And as the chairman has already said, we visited some of 
these sites. I have not visited all of the sites that he has 
visited. We have seen good facilities, and we have seen bad 
facilities. And in your testimony, you have spoken of good-news 
stories and desperate-need stories along the way.
    Over the past few years, we have been able to get some 
additional Military Construction (MILCON) dollars for the 
European Command, but that has not come anywhere close to 
dealing with the sum total of the problems that are there. And 
you have given very thorough and very pertinent testimony, I 
would say, that could leave us here all day, if we wanted to 
stay here and follow it up all day.
    But in any case, I am looking forward to the hearing, 
looking forward to what you have to say, for the clarification 
that we can reach that will help us to do the best job we can 
for those men and women who are serving us overseas.
    General Ralston. Thank you, sir.
    Mr. Hobson. Thank you, John.
    We are very pleased this morning to have our distinguished 
big chairman here with us today, the chairman of the 
Appropriations Committee, a person who is very interested in 
our military and very interested in military construction 
around the world, and I am very pleased that he joined us this 
morning.
    And, Mr. Chairman, if you would like to make any comments?

                      Statement of Chairman Young

    Mr. Young. Mr. Chairman, thank you very much.
    I would just like to say welcome to General Ralston. We 
know of many of the problems that you have in your area of 
responsibility, and we want to be there to help every way that 
we can.
    You and I have discussed, several times recently, some of 
the needs in military construction. Chairman Hobson and Mr. 
Olver and the committee members and I are going to try to help 
you out the best we can.
    You have a tremendous responsibility in keeping the peace 
in the world. I think those people that work for you should 
have decent accommodations and a better quality of life than 
they have today.
    Thanks for being here today.
    General Ralston. Thank you, sir.
    Mr. Hobson. It is all yours, General Ralston.

                 Statement of General Joseph W. Ralston

    General Ralston. Thank you, Mr. Chairman.
    First of all, let me tell you how grateful I am for the 
opportunity to appear before your committee today. I have 
submitted a statement for the record, and I would like to talk 
for a couple of minutes, if I can, oral testimony, if you will.
    You mentioned earlier on about the responsibilities that we 
have in the European Command (EUCOM) theater. EUCOM is somewhat 
misnamed, I would say. It is more than just the current 
countries of Europe. We have the countries of Europe. We have 
the Middle East, including Israel, Syria, Lebanon, and we have 
all of Africa except for the northeast corner. There are 91 
countries, overall, in the European theater.
    And this is what the soldiers, sailors, airmen and marines 
that are part of EUCOM are responsible for, working with those 
91 countries.
    Mr. Olver. Mr. Chairman, could I clarify that?
    In EUCOM, you have all of Africa.
    General Ralston. Except for the northeast corner.
    Mr. Olver. Where is that?
    General Ralston. Well, that is in Central Command. Kenya, 
Eritrea, Ethiopia, Somalia, Djibouti, Egypt and Sudan.
    [Chart 1 follows:]
    [GRAPHIC] [TIFF OMITTED] T4873B.047
    
    Mr. Olver. There is a map.
    General Ralston. That northeast corner, as you see there on 
the corner of that, they are part of Central Command.
    Mr. Olver. But the map that it shows here does not include 
Egypt.
    General Ralston. Egypt is part of Central Command.
    Mr. Olver. Of Central Command.
    General Ralston. Yes, sir.
    Mr. Olver. And Sudan is part of Central Command?
    General Ralston. And Sudan, yes, sir.
    Mr. Olver. And the Horn of Africa is Central Command?
    General Ralston. Yes, sir, that is right. But everything 
else in Africa is part of European Command.
    Mr. Olver. And just to clarify this map, I am a veryvisual 
person, and I need to see what we are doing. My impression is that it 
does not include Jordan or Egypt.
    General Ralston. Jordan is part of Central Command also. 
The part of the Middle East that is part of European Command is 
Israel, Syria and Lebanon.
    Mr. Olver. That strikes me as curious. When you see the 
map, and you see Jordan and Egypt, which are all part of the 
Mideast, the Israel and neighbors situation, being part of a 
different command.
    General Ralston. We could have a long discussion about 
that, I am sure. But trust me that the line had to go 
somewhere, and that is where it was put several years ago.
    But my point, Mr. Chairman, is it is a big command with 91 
countries and the uniformed people that are there, including 
the 115,000 uniformed people, there are 134,000 family members 
that are there, and there are another 52,000 Department of 
Defense (DOD) civilians and their families. So we are talking 
about over 300,000 Americans that are impacted by what this 
committee does.
    When I got there, quite frankly, as I went around and 
looked at the facilities, I came to the conclusion that this 
was one of the biggest problems that I had, in terms of the 
inadequate facilities that our people live and work in. And if 
I could show you a couple of pictures over here on the wall.
    [Slide 1 follows:]
    [GRAPHIC] [TIFF OMITTED] T4873B.048
    
                    European Command Family Housing

    Let's talk about EUCOM family housing for a moment. We have 
some family housing standards that we try to meet, and if I 
could briefly outline those. For the American people, I do not 
think we are asking for a lot here. If you have three bedrooms 
in a house, we think that there should be two bathrooms. We 
would like to have a stove and refrigerator, and we would like 
to have a washer and a dryer.
    Mr. Olver. In that apartment, not in the basement, right?
    General Ralston. That is right, in that apartment.
    Now, out of those requirements I just outlined--two 
bathrooms, a stove and a refrigerator, and a washer and a 
dryer--69 percent of the families in the United States Army in 
Europe are living in facilities that do not meet those 
standards.
    [Chart 2 follows:]
    [GRAPHIC] [TIFF OMITTED] T4873B.049
    
    General Ralston. So I do not think that we set the bar too 
high when I talk about that. If you tried to explain that to 
the American people, I do not think that is asking for a lot. 
Yet only 31 percent of the United States Army families in 
Europe meet those standards.
    Next slide, please?
    [Slide 2 follows:]
    [GRAPHIC] [TIFF OMITTED] T4873B.050
    
    Mr. Olver. Do you know where that is? Does anybody know 
where that is? I have seen some like that, but----
    General Ralston. That could be Ramstein. Do you know where 
the picture is?
    Mr. Hobson. And just so that everybody knows, those are all 
walkups, and the washers and dryers are in a real dingy 
basement, down in the basement.
    This woman's family is living on the third floor. She has a 
couple of kids. She has to either leave her kids, go all the 
way to the basement, do her laundry, come back up to the third 
floor, or take them with her, down into these facilities so-
called underneath the apartment building.
    Is that right, sir?
    General Ralston. That is correct. That is right.

                                Barracks

    The next set of pictures are from barracks. That is Souda 
Bay, Greece, and also at Ramstein in Germany.
    [Slide 3 follows:]
    [GRAPHIC] [TIFF OMITTED] T4873B.051
    
    General Ralston. Now, we are working hard to fix that, but 
it is going to be 2008 before we have the barracks program 
fixed, if everything stays on track.
    Next slide?
    [Slide 4 follows:]
    [GRAPHIC] [TIFF OMITTED] T4873B.052
    
                         MAINTENANCE FACILITIES

    General Ralston. Now, we have put a lot of emphasis, as we 
should have, on family housing because of the reasons that I 
talked about, but that has come at an expense. And these are 
the support facilities that you talked about a moment ago. This 
is what our people are working in.
    And as you mentioned, in many cases, we have people that 
are trying to do work on equipment. They are out in the parking 
lots, out in the mud, trying to maintain that equipment.

        Cinceur's MBI Submissions' military Construction and rpm

    So as a result of that, I went to the Joint Requirements 
Oversight Committee--these are the vice chiefs of the four 
services and the vice chairman of the Joint Chiefs--and 
outlined the problems that I saw. I went to the Joint Chiefs 
and briefed all of the Joint Chiefs in session. I went to the 
Defense Resources Board, which is all of the senior civilian 
leadership in the Department of Defense, and to the secretary 
of defense, himself. And I said, this is my number one problem 
that I have in the European Theater: military construction and 
real property maintenance.
    As our budget process works in the Pentagon, we have what 
are called major budget issues that the CINCs are allowed to 
come back and reclama certain things. I only came back with two 
major budget issues and that was military construction and real 
property maintenance.
    And as a result of that, while I am not sure what the final 
budget is going to be in 2002; that is not over here yet, and, 
certainly, they are still making decisions on that. But I am 
reasonably optimistic that I was supported by the secretary of 
defense and will be supported by the secretary of defense with 
an increase of funding for military construction and real 
property maintenance for the European Theater.
    And if I am correct and that comes over to the committee, I 
would certainly welcome your favorable consideration of the 
increases in that budget.
    Mr. Chairman, that is all I have in the way of opening 
comments. I am prepared to talk about any of our ongoing combat 
operations, should you or the committee be interested in that 
or any other questions that you may have.
    [The prepared statement of General Joseph W. Ralston 
follows:]
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[GRAPHIC] [TIFF OMITTED] T4873B.083

    Mr. Hobson. Well, we usually go by order of arrival, but 
since we have the chairman here, if he has any questions he 
would like to ask?
    Mr. Young. No, you go right ahead with your regular order.
    Mr. Hobson. Okay.
    John, do you have a question you would like to ask at this 
time?
    Mr. Olver. As usual, I have so many questions, I do not 
know where to start.
    You are kind, since you arrived absolutely first.
    Mr. Hobson. That is all right. I am the chairman, so I 
can----
    [Laughter.]

                   Explanation of USEUCOM Components

    Mr. Olver. General, help me a little bit with your 
testimony. I have read it through, and I have looked at the 
charts. And I am trying to sort out the housing by service, and 
the charts, obviously, do not cover everything.
    On the charts, EUCOM, that is the overall command. What is 
AOR command? What is that?
    General Ralston. Area of responsibility.
    Mr. Olver. Area of responsibility.
    And the EUCOM is simply European Command?
    General Ralston. Yes, sir.
    Mr. Olver. Okay, then what is USAREUR?
    General Ralston. That is United States Army Europe, so that 
is the Army component.
    Mr. Olver. Okay.
    General Ralston. We have three basic components that we are 
talking about here. We have United States Army in Europe; that 
is USAREUR. We have United States Air Forces in Europe; that is 
USAFE.
    Mr. Olver. That is USAFE?
    General Ralston. Yes, sir.
    And we have United States Navy Europe, which is called 
NAVEUR. Now you have, also, a Marine component, but the Marine 
component is part of the Department of the Navy.
    Mr. Olver. Okay, there are Marines who are part of the 
deployments in Europe?
    General Ralston. Yes, sir.
    Mr. Olver. How many of the 100,000 are Marines, the roughly 
100,000?
    General Ralston. Out of the roughly 100,000, over 100,000, 
the Navy and Marines is about 10,000 of that, and it depends on 
the deployment that they come over there at the time. I would 
say, at any given time, we have probably got about 3,000 
Marines, about 3,000.
    Mr. Olver. The reason I asked those was that I did not see 
uniformity in the use of those acronyms, so I was not quite 
sure what they meant and wanted to be certain that I was fully 
aware.

                        FAMILY HOUSING STANDARDS

    In your European Command standards for housing, you have 37 
percent of the family housing units there up to standard, which 
is your three bedrooms and modern appliances and so on. Now, I 
think you said that, for the Army, it is only 31 percent up to 
standards.
    General Ralston. That is correct.
    Mr. Olver. And there must be a set of numbers here that, 
taken together, give you the total of 37 percent. So there must 
be a Navy number, which I understand is much better. There is 
NAVEUR, which is 73 percent up to standard, which must mean, 
then, that the Air Force is a long way below standards.
    [Slide 5 follows:]
    [GRAPHIC] [TIFF OMITTED] T4873B.084
    
    General Ralston. No, here is what the difference is: The 
Army, which is 69 percent not meeting standard, is, by far, the 
bulk of the forces. Out of the 110,000, the Army is over 60,000 
of that. In the Air Force, it is almost as bad, at 63 percent 
below standard, if you will. It is about 30,000. And the Navy, 
which is by far the best, only has about 10,000 people.
    [Slide 6 follows:]
    [GRAPHIC] [TIFF OMITTED] T4873B.085
    
    General Ralston. So in terms of the overall numbers----
    Mr. Olver. Okay, and what did you say the Air Force number 
was?
    General Ralston. The Air Force is 63 percent.
    Mr. Olver. It is right on the command average, then?
    General Ralston. It is on the command average.
    Mr. Olver. Right on the command average. I see.
    And would it be possible to have somebody put down the 
whole command and then the units of the command in, a 
tabulation, a table that shows where these are, so I can see 
the whole picture and what are each service's relationships 
here?
    I am also interested, in where they are. I am not sure that 
this is the case, but my guess is that conditions in Germany 
are probably--I may be absolutely wrong--that they would be 
better than they are likely to be at Souda Bay and at Incirlik 
and a few other places where we have people. I do not really 
know where those folk are.
    General Ralston. I will be happy to provide, for the 
record, the answer to that, and I will tell you that you are 
probably wrong about that.
    For example, the Navy is predominantly in Naples, Italy. 
And the Navy has done a good job on their housing to do that.
    The housing in Germany, Army and Air Force, is probably the 
worst in the command, because it has been there for fifty-some 
years. It is the stairwell housing that we talk about. It is 
old.
    Mr. Olver. That is why I stopped myself, because as soon as 
I said that, I thought probably Germany would be better. I knew 
that that was the oldest of the stuff that is around and has 
probably been there for a long time.
    Are the standards the same? Are the DOD standards and the 
European Command standards for housing identical?
    General Ralston. Yes, sir.
    Mr. Olver. The standards that we use on stateside under DOD 
for housing, those are exactly the same as the European Command 
standards, on what is substandard, regarding bathrooms and 
things of that sort?
    General Ralston. Yes, sir. What we are talking about are 
the DOD standards.
    Mr. Olver. And they are the same as the European Command 
standards?
    General Ralston. Yes, sir.
    Mr. Olver. Well, I will pass.
    Mr. Hobson. Chet? You were here next.
    Mr. Edwards. Thank you, Mr. Chairman.
    General Ralston, thank you for being here and your 
extraordinary service to our country over your lifetime.

                 MARRIED PROPORTION OF EUCOM PERSONNEL

    So that I am clear on the facts, could you tell me 
approximately what percentage of personnel under your command 
are married? Do you know approximately, just a ballpark?
    General Ralston. I am going to have to get back to you for 
the record. I am going to say about two-thirds.
    Mr. Edwards. Approximately two-thirds?
    General Ralston. I will have to get back with a better----
    Mr. Edwards. Okay, that is a ballpark.
    Mr. Hobson. Everything is pretty much accompanied tour that 
you have, or can be?
    General Ralston. No, sir, obviously in Kosovo and in 
Bosnia----
    Mr. Hobson. Yes. They are not.
    General Ralston [continuing]. Where we have about 10,000 
personnel there, between those two operations. At Incirlik, 
Turkey, we have a combination. Some are accompanied that are 
there, permanent change of station (PCS). Others are on 
temporary duty (TDY). Other than that, most of it is 
accompanied.
    Mr. Edwards. Let us just say the number is two-thirds that 
are married. What percent of those families are actually living 
on an installation versus having to live in the community?
    General Ralston. Most live on an installation. Let me use 
the Air Force as an example. The actual number of married 
families is 21,409. Approximately 10,300 live in government 
quarters and 2,700 live in government-leased housing, the 
remainder live in off-post personal rental housing.
    Mr. Edwards. Is that what it is like, also, with the Army? 
Most of the families are living on installations?
    General Ralston. Yes, sir.

              COST OF BRINGING FAMILY HOUSING TO STANDARD

    Mr. Edwards. If I could focus for a minute to those living 
on installations, do you have any sort of estimate of what it 
would cost today to bring up all of the family housing to 
standard?
    General Ralston. We have a plan, as I say, to try to do 
this by 2008.
    Mr. Edwards. I understand that.
    General Ralston. And I will have to get you, for the 
record, the amount of that. But we are talking hundreds of 
millions of dollars here to do this.
    Mr. Edwards. Could you or your staff also help us on the 
same answer to the question of bringing barracks up to one-to-
one standard? What is the total cost, regardless of the time 
frame? In today's dollars, what would be the total cost?
    One other question, then I will pass on, Mr. Chairman, back 
to you.

             ROLE OF BUDGET COMMITTEE IN CINCEUR TESTIMONY

    Have you ever been asked, in your present position, to 
testify before the Budget Committee? Or what is the process, 
from your days as vice chief? What has been the process for our 
military leaders to express these same concerns before the 
Budget Committee?
    You know, I admire what Mr. Hobson has done as chairman, 
and Mr. Olver. More than any two members I have seen on the 
subcommittee in my years here, they have focused on trying to 
help our overseas military personnel improve their quality of 
life, and it is a tough struggle.
    And it seems like the big decision is initially made by the 
Budget Committee to decide how big of a piece of the pie we 
get. What is your understanding of the process?
    General Ralston. From personal experience, I have testified 
before the four oversight committees: the Senate Armed Services 
Committee, the Senate Appropriations, the House Armed Services, 
the House Appropriations. This is my first opportunity to 
appear before the MILCON Committee. And to my knowledge, 
certainly I have never appeared before the Budget Committee, 
and I do not believe any of the members of the Joint Chiefs 
have testified to the Budget Committee.
    Mr. Edwards. I said vice chief a minute ago. I meant vice 
chairman of the Joint Chiefs.
    You were never asked to testify before the Budget 
Committee?
    General Ralston. No, sir.
    Mr. Edwards. And it seems to me that is, you know, what I 
regret, is that somehow the numbers you have given us about the 
incredibly high percentage of military personnel, American 
citizens serving our country, living in substandard housing 
overseas, that message does not get to the Budget Committee.
    And I will follow up on that. It is out of the purview of 
just our subcommittee.

  NUMBER OF USAF FAMILIES LIVING IN EUCOM AND EUCOM SUPPORTED HOUSING

    Mr. Olver. Would you yield to one clarification of the 
testimony here?
    General, I thought you said that there were about 11,000 
Air Force families. Is that the total number of families under 
the Air Force deployment in Europe? What I am getting at, the 
testimony here, in your written testimony, it reads: ``U.S. Air 
Forces in Europe have more than 11,000 military families 
currently living in private-and government-rented housing.''
    I thought I just heard you say that there were about 700 
living in off-base and government-rented housing?
    General Ralston. That was my understanding. Let me ask for 
a clarification here.
    Lieutenant Colonel Cox. The actual number of married 
families is 21,409. Approximately 10,300 live in government 
quarters, and 2,700 live in government leased housing, the 
remainder live in off-post personal rental housing.
    General Ralston. And so I think the statement is 
misleading, that is there.
    Mr. Olver. Okay.
    General Ralston. That is supposed to be total.
    Mr. Hobson. Mr. Vitter?
    Mr. Vitter. Thank you, Mr. Chairman.
    General, thank you, again, for being here and certainly for 
your service.

        HOUSING DEVELOPMENT THROUGH PUBLIC/PRIVATE PARTNERSHIPS

    Stateside, we are experimenting in refining public-private 
ventures, with regard to housing development. And members of 
the committee, certainly myself, are probably more familiar 
with how that is going and how that is being refined stateside.
    In the European theater, is it different in any way? Are 
there particular problems or particular opportunities that are 
different from in the United States?
    General Ralston. My understanding is that we have tried to 
look at that overseas, but you do run into more difficulties 
there than you do here.
    One of the issues that you have that is a bigger issue 
overseas is the force protection issues, and you would like to 
have as many of your families as you could living on a military 
installation. It is different in the United States, where we do 
not quite have those same issues to deal with.
    It is also more difficult in terms of the privatization, to 
get the private industry involved overseas, than it is here in 
the United States.
    Mr. Vitter. In terms of the first factor, let me back up, 
because I am not sure I understand. You can do these public-
private ventures building something on a base. It does not mean 
it is going to be off the base.
    General Ralston. That is true. And in some cases in the 
United States, we have done actually that, the 801 housing 
issues.
    Mr. Vitter. But bottom line, it does not happen as much in 
Europe? Does it happen at all really?
    General Ralston. Colonel Cox?
    Lieutenant Colonel Cox. Sir?
    General Ralston. Do we have any private venture housing on-
bases?
    Lieutenant Colonel Cox. No, sir.
    Mr. Vitter. Do you consider that an area to explore? Or do 
you think the difficulties are too great for that to be 
practical?
    General Ralston. We have asked the components to look at 
this, I can tell you that. And the components have come back 
and said that they have looked at it, and it is a very 
difficult thing to do.
    Mr. Hobson. If I could interject, we are having a real 
difficulty getting this started in the Continental United 
States (CONUS), much less overseas, in a configuration that 
will work.
    Air Force has certain--and I think this is right--has 
certain severability features in their housing that they do, 
that they want to be able to, if this housing does not stay 
private, that it does not infringe later on the base. In the 
base operations, we changed how we do things, so it would have 
the ability to be fenced off later.
    That is a particular problem, maybe, in Europe, where the 
housing spaces are set up a little differently than they are 
here. But we have had real problems here in the privatization 
here, sir.

                     FORCE PROTECTION REQUIREMENTS

    Mr. Vitter. In terms of terrorist threat and security 
concerns, has that created more demands and more problems, in 
terms of building housing and other facilities over the last 
decade or two?
    General Ralston. Yes, sir. It has for a couple of reasons.
    Number one, the technical aspects of the housing itself, in 
terms of the types of windows that you need and that; the 
standoff distance that you need from major thoroughfares, from 
streets; the actual construction.
    If you put in the force protection measures that we need at 
this time--this is something that we did not do in the past--it 
is more expensive. It does take more money to do that.
    Mr. Vitter. Are you comfortable that the standards we have, 
at least on paper, and the requirements we have on paper, are 
adequate? Or is this something we still need to think about and 
refine?
    General Ralston. Well, it is an ongoing process. I mean, I 
know a lot of work has been done over the past two to three 
years with regard to the standards for force protection. I am 
certainly not about to tell you that we have the end-all, be-
all of that. It is something that we will continue to look at, 
continue to refine.
    Part of the problem we have right now is trying to get to 
the standards that we have established to date.

       FORCE PROTECTION AND ON-POST VS. COMMUNITY FAMILY HOUSING

    Mr. Vitter. The final question: You talked about folks 
living in communities versus on installations. In your perfect 
world, is everyone on an installation or is it beneficial, 
either because of cost or because of relations with the 
surrounding community, for some percentage to actually live in 
the surrounding community?
    General Ralston. Very, very interesting question. 
Certainly, in the United States, my preference is that I think 
there is a lot of merit to living in the individual community. 
I can tell you that from my own personal experience. When you 
are living in the town, you are going to the churches in the 
town, children are going to the schools in the town. I think 
there is a lot of merit in that regard.
    When you go overseas, it would be country-specific, because 
in some countries we have a much higher force protection issue, 
much higher terrorist threat, than you do in others. The merits 
of being in the community are certainly the cultural experience 
that the families would get. There is certainly great merit to 
that.
    I think for the most part overseas, I would say that is 
offset by the problems that we have, in terms of force 
protection for our people. And in that regard, I would feel 
more comfortable if we had our people on-base, on-installation.
    Mr. Vitter. In certain countries, like solid European 
allies, for instance, not those countries suffering from 
terrorism, but in certain countries, again, in your perfect 
world, would you want some off-base or is your general 
preference overseas to get everyone on-base?
    General Ralston. No, I think in those countries where you 
do not have a particular terrorist threat--and I must say, by 
the way, that is becoming fewer and fewer over time. That is 
the real problem we have.
    For example, and not to single out particular countries, 
but England, that we normally think of as a very, very safe 
country to do that, England has its own share of force 
protection issues that we have, and we have been very concerned 
recently with some of those.
    So it is very difficult to pick a country overseas where 
you can say that you have very high confidence that you do not 
have a terrorist threat.
    Mr. Vitter. Okay. Thank you, Mr. Chairman.
    Mr. Hobson. Just to highlight that and show that in 
England, isn't there a little road that runs right through the 
housing?
    General Ralston. Yes, sir.
    Mr. Hobson. And it is very picturesque, but it is also a 
threat problem today there.
    General Ralston. Right.
    Mr. Hobson. I think Mr. Aderholt is next.
    Mr. Aderholt. General Ralston, good to have you here today. 
Thank you for the work that you do.
    I want to just expand on some of the force protection 
issues that you were just referring to. I realize you were 
mainly referring to the housing situation. This committee knows 
that force protection is a key element both for readiness and 
quality of life.

                 ANTI-TERRORISM FORCE PROTECTION ISSUES

    Could you take just a minute to talk about the 
vulnerability in the European Command to anti-terrorism force 
protection issues in general, not just the housing aspect, but 
just in general?
    General Ralston. Well, it is certainly an issue that gets a 
lot of attention. And let me talk for a moment here, in an 
unclassified forum, about some of the issues that we face.
    We get many, many reports every day. I probably get, on an 
average day, 15 intelligence reports that something in EUCOM is 
about to blow up. Now, on an average month, that is 450 of 
these that come in.
    Now, the real issue here is, how can you pick out the 
important ones and let the others slide? It is becoming a real 
problem, because if we get a threat, then the typical tendency 
is, ``Okay, we have to be serious about this. Let's go into the 
increased threat protection measures that you have at a 
particular installation.'' You put everybody on very high 
alert. You go to extraordinary measures to check the people 
that are coming and going, and all of the various classified 
measures that we would take.
    If you do that too often and try to keep people on that 
status 100 percent of the time, it is psychologically very 
damaging, because now, you know, they do this day after day 
after day after day. That becomes the routine. And then, when 
the threat really does increase, how do you get them back 
interested again?
    That is an issue that we have, and we are constantly trying 
to make the balance of what is the real threat here, which one 
of these 450 pieces of intel we get per month is really serious 
and which ones are either frivolous or people submitted them in 
good faith, but it turns out that they are not actually a 
threat? That is a serious issue we have to deal with. I do not 
have a solution to that, but I only point it out as one of the 
things that we are trying to deal with.
    And now, the other thing that we have done is to try to go 
through each of our installations and say, ``What should be 
done to this installation to make it safer for our people?'' 
That involves, usually, greater standoff distances, greater 
barriers, alerting systems for our people, getting the alert 
out in a hurry.
    All of these cost money. And we have submitted those into 
the budget process to try to get funding for those. As you 
know, there is a fixed amount of resources. If you fund all of 
that, which is very important, it is going to have to come from 
somewhere. So what is it that you are not going to fund in 
order to do the very necessary force protection measures?
    Mr. Aderholt. Thank you.
    Thank you, Mr. Chairman.
    Mr. Hobson. Mr. Boyd?
    Mr. Boyd. General Ralston, good morning, sir.
    You focused your comments on the fact that in the Pentagon 
budgeting process you really made only two requests: MILCON and 
real property maintenance.
    It seems to me that our problems, MILCON problems and 
property maintenance problems, that exist not only in your 
command, but in CONUS also, come from the fact that we have had 
a serious decline in the topline of the MILCON budget process.

                  FISCAL YEAR 2002 DOD BUDGET REQUEST

    As you know, we do not yet have a budget that we can work 
from, from the administration. But we do have a sketchy 
blueprint that gives us some idea about where we are going. And 
one of the caveats that came with that, or footnote, was that 
there was a strategic review being done by the secretary.
    Now, the blueprint or the sketchy numbers that we have at 
this point, it seems to me, will barely cover the statutory 
requirements on the military pay side and some of the health 
care initiatives sides that we have, if you look at the big 
picture.
    So I am a little bit, I guess, pessimistic about all this, 
and I want to follow the line of questioning that Mr. Edwards 
started, and that is for you, if you can, to elaborate a little 
bit about what is going on in the Pentagon, what you folks are 
doing to get the word out to the administration that we have 
these kinds of problems. And how can we help?
    General Ralston. Yes, sir. To put this into context a 
little bit, I agree with what you have said in terms of our 
MILCON overall. But I will make the case for EUCOM here that, 
in the case of EUCOM, it is even more severe than for others.

          ORIGIN OF U.S. EUCOM's MILCON/RPM BUDGET SHORTFALLS

    Because if we go back to when the Berlin Wall came down in 
1989, we made some decisions in 1990 and 1991 that said, ``We 
have 360,000 troops here in Europe. We are going to take a lot 
of these back home. We are not sure which installationswe are 
going to close and which ones we are going to keep open. Therefore, 
let's not spend any money until we make those decisions.'' That was a 
perfectly proper and logical decision at the time.
    But not only was that decision followed in 1990, but also 
in 1991, 1992, 1993, 1994, 1995, 1996. We went for almost a 
decade and did not put any MILCON into Europe.
    And because of that, we are now in a bathtub here. We need 
to somehow not only do what we should do overall in terms of 
our facility upkeep and replacement, but because we went on 
such an extended holiday in the EUCOM theater, because of, 
geopolitical changes, we now have to go back and catch up.
    This is the case that I made through the budgeting process 
last summer and last fall in the Pentagon for the 2002 budget 
that someday will come over to you.
    Mr. Boyd. April 3, I believe. [Laughter.]
    General Ralston. This is what we did with the people in the 
Pentagon. All I can tell you is that I will continue to try to 
carry this message to my authorities in the Pentagon. And then, 
ultimately, it will be the administration's decision as to what 
it is that comes over to the Congress.
    Mr. Boyd. Thank you, General.
    Again, I think that date is April 3. And again, it appears 
to me that the numbers that have been thrown out in the brief 
sketch, budget sketch, would barely cover the statutory 
requirements for military pay and health care initiatives. And, 
as you know, there are many initiatives in there.
    But thank you. I think you have answered my question. I 
appreciate it.
    General Ralston. Yes, sir.
    Mr. Hobson. Sam, since you were in line. He had to 
introduce the chaplain. So, for that, we will give him 
dispensation to come back. I do not want to get in trouble. 
[Laughter.]
    Mr. Farr. Sorry I had to leave. I wrote the chairman a note 
that I was glad to be aboard the USS Ohio.
    I appreciate you being here today.

          QUALITATIVE DIFFERENCES BETWEEN US/EUCOM FACILITIES

    One of the issues that I am interested in is, that we 
looked at, is the question that was asked: The facilities in 
Europe under your command, how do they compare to the 
facilities in the U.S.? And maybe this question has already 
been asked. I will just get it from the record.
    General Ralston. I think, in my own personal view, they are 
substandard to what you would find at any installation in the 
U.S. And the reason being, as I said, in 1989, when the Berlin 
Wall came down, and obviously there was going to be a 
realignment of forces, and we went from 360,000 troops in 
Europe to just a little over 100,000, we went into a 
moratorium. And that was a good and proper decision, as we 
sorted through that.
    But instead of staying in that moratorium for a year, we 
stayed in it for almost a decade. So we did not put any MILCON 
and very minor real property maintenance into the European 
theater. And because of that, we have built ourselves a huge 
backing, and our facilities are as you see up there on the 
charts.
    So for that reason they are, in my view, not only not up to 
the DOD standard, but they are not even up to the standards of 
other facilities in the United States.

             U.S. GOVERNMENT SUPPORT TO ITS MILITARY ABROAD

    Mr. Farr. Has there been consideration given to how you 
build the facilities to what we need to provide for our men and 
women in uniform, but at the same time not building ``Fortress 
America'' that becomes--you know, envy can turn into all kinds 
of things, and it also can turn into dislike. And one of the 
things that we have experienced in this committee, in talking 
to some of the other NATO countries, is how much more we 
provide for our men and women in the service overseas than 
their own host country would provide.
    I mean, it is always walking a fine line. I think we want 
to be proud of America. We want to provide the best that we 
can. At the same time, we do not want to be the ugly Americans.
    General Ralston. No, sir. I understand that. And I 
appreciate that.
    Let me give you an example. If we go to Germany today, 
either to an Army installation or to an Air Force 
installation--and I know you are familiar with the stairwell 
complexes that we have, apartment buildings, if you will, and 
the pictures of some that you see there on the wall. I think 
the things that we are talking about doing, where you update 
those apartments to the very minimum standards we are talking 
about here, where you have two bathrooms, a washer and a dryer 
in the apartment, and a stove and a refrigerator, I do not 
believe can be accused of being the ugly American. I think that 
is something, as a bare minimum, we owe to our families that 
are serving this Nation overseas.
    I am not at all in favor of building brick housing for 
everyone and becoming the ugly American. That is not what we 
are talking about here. I just believe that we do need to make 
those basic infrastructure changes to give what any American, 
quite frankly, would call a very modest apartment. That is what 
I am talking about, is giving to that standard.
    Mr. Farr. If the committee asked, what are the projected 
costs to upgrade our facilities?
    General Ralston. And I will get an exact number for the 
record. It is in the hundreds of millions of dollars.
    Mr. Farr. Well, thank you. Thank you for serving our 
country.

              STATUS OF EUCOM FORCE PROTECTION INITIATIVES

    Mr. Young. General, several weeks ago many of your forces 
had been at Threatcon Charlie, for over five months, I believe. 
Are any of the military construction projects that you will 
present--going only to the issue of force protection, will any 
of those MILCON projects go to the issue of protecting those 
properties that were threatened by the Charlie threat?
    General Ralston. Yes, sir. And, for example, at Incirlik, 
Turkey, is where we were in a situation that we were at 
Charlie, going back to the October time period. Many of the 
projects that we have are those things to build lookout towers, 
if you will, and to build a better entryway into the base, so 
that people can be more adequately checked and trucks that are 
coming into the base can be more adequately checked. There are 
requests in the budget to do exactly those types of things.
    Mr. Young. Now, in Izmir, I think it was, some of your 
facilities are right on the busy streets. They do not have any 
setback at all.
    Mr. Hobson. That school I talked about.
    Mr. Young. A school. I visited that school. It is right on 
the street. And your commissary. There are limitations on how 
many people could visit the commissary at one time.
    General Ralston. Yes, sir.
    Mr. Young. So this budget will deal with issues like that?
    General Ralston. It deals with those issues. I must tell 
you, it is not going to fix all of those issues at the same 
time. There is a pacing issue here, as to how much you can do.
    Mr. Young. Sure. I understand that. And a lot of military 
construction work is obviously into the future----
    General Ralston. Yes, sir.
    Mr. Young [continuing]. Because of the nature of the work.
    General Ralston. Yes, sir.
    Mr. Young. But let me talk to you about the future for just 
a minute.

                    FORCE STRUCTURE LEVEL IN EUROPE

    One of the reasons that Congress had been reluctant to 
spend a lot of money on overseas military construction--and Mr. 
Hobson and I decided we needed to change that--it was because 
we were withdrawing the force, as you pointed out, from 360,000 
to 100,000.
    There are still many who wonder if that 100,000 is going to 
become 50,000 or 20,000, and you would possibly be reluctant to 
make a large investment if the force is going to be further 
brought down. Probably until the President finishes his review 
of where we are, you probably cannot give a very specific 
answer there. But if you have any thoughts, I would like to 
hear them.
    General Ralston. No. Mr. Chairman, you are exactly right 
about that.
    And if we go back to the last Quadrennial Defense Review 
that was conducted in 1997, this was an issue that was looked 
at very carefully: How many troops did you need overseas to do 
the things that America expects our forces to do? And that 
review said we need approximately 100,000 in Europe, 
approximately 100,000 in Asia. We think that is about right to 
do all of the engagement activities and to be prepared to deter 
and fight the wars that we need to fight.
    There is currently, as you know, a review ongoing in the 
Pentagon, and this is once again one of the issues that we will 
have to look at. It is four years later, it is Quadrennial 
Defense Review time again, and it would be premature for me to 
make any pronouncements here as to what the outcome of that is 
going to be, because, honestly, I do not know.
    I would make the case that if you expect EUCOM to do the 
types of taskings that we have been given to date, my own 
advice would be that I do not know how you would do that with 
any significant reduction in forces. Ninety-one countries, 
trying to engage those 91 countries with the activities we have 
ongoing in the Balkans, as a lily pad, if you will, for forces 
to the Middle East, because they are already closer if they are 
in Europe than they would be here in the CONUS--all of those 
are the arguments of why the force structure should stay about 
where it is. But it is premature for me to make any 
pronouncements of that because the ongoing review has to be 
accomplished.
    Mr. Young. Sure. And I understand that. And I am going to 
ask you another question that asks about your crystal ball, 
too.
    But with the European military organization that is under 
discussion now, and I do not think any of us are really sure 
how that is going to relate to NATO or how NATO is going to 
relate to that organization, or how either one of them are 
going to relate to the United States, if it proceeds the way 
the Europeans are talking about, do you see this as something 
that would affect our decision on how many U.S. troops would be 
stationed in Europe?
    General Ralston. That is an excellent topic. Let me talk 
about that a little bit and put it into context for the 
committee here.
    The European Union has stated that they would like to have 
the capability to intervene militarily on those occasions when 
NATO would decide not to do so. And they have outlined a 
catalog of forces of about 60,000 troops that they should be 
able to deploy and sustain for a period of time.
    Now, the reality is that those 60,000 troops that have been 
put into the catalog are not additional troops; these are not 
additional battalions or squadrons or ships that the Europeans 
have come up with. They are simply designating existing forces 
that are on tap for NATO to also be on tap for the European 
Union. So it is not an increase, if you will, in terms of 
battalions or squadrons or ships.
    Now, we have encouraged the Europeans for decades to do a 
better job in providing for their own defenses. We hope they do 
that.
    I must tell you that the defense budgets of our European 
allies have come down significantly, as has our own defense 
budget. Where ours has leveled off and is increasing slightly, 
theirs for the most part are continuing down. So I do not 
believe that there is likely to be a big increase in combat 
capability on the part of the Europeans with this.
    So in that regard, we are not talking about additional 
forces. This is just how you count them, in which column. And 
in that regard, I think, from the U.S. interest, I would make 
the case that we need to keep a substantial number of forward-
deployed forces.
    Mr. Young. General, thanks very much, and thanks for being 
here. I can speak for myself, and I know Mr. Hobson, because we 
spend a lot of time talking with each other, we are committed 
to making life for your troops the best that it can possibly be 
under the circumstances.
    And also I wanted to thank you for bringing John Kelly, 
because, you know, John is my neighbor. I live here in Northern 
Virginia, and I miss seeing him, so thanks for bringing him 
back.
    General Ralston. Thank you, Mr. Chairman. And thank you 
again for the support that you have given the European Command.
    Mr. Hobson. Ms. Granger?
    Ms. Granger. Yes. Thank you.
    Good to see you again, General. And I am going to 
apologize, I am going to have to go back over some ground. I 
just want to make sure that what I am looking at, that I 
understand it.

                        EUCOM HOUSING STANDARDS

    And this that you have that shows 63 percent and 37 percent 
to meet EUCOM standards, the only standards you are talking 
about right there are the two full bathrooms, the modern 
appliances, the washer and dryer, right?
    General Ralston. Yes, ma'am.
    Ms. Granger. Then the one that shows 69-31 percent, that 
takes those standards but also includes that 88 percent are 
over 40 years old?
    General Ralston. No, ma'am. No, ma'am. Let me start again 
with this one here.
    This is the EUCOM standard, and EUCOM being a combination 
of all the services. So this is just an aggregation, if you 
will, of the USAREUR chart, which is the 69-31 percent. This is 
the Army.
    Ms. Granger. Right, okay.
    General Ralston. This is the Air Force, the 63-37. And this 
is the Navy, the 27-73. If I add all three of those together, 
this is what it comes up to here.
    Ms. Granger. And you're only referring to the standards 
that are listed at the bottom of that----
    General Ralston. Yes, ma'am.
    Ms. Granger. Is that right?
    General Ralston. That is right.
    Ms. Granger. So it does not have anything to do with, for 
instance, open space or insulation or anything else?
    General Ralston. No, ma'am. I mean----
    Ms. Granger. These were very, very basic standards.
    General Ralston. It is very a basic standard. That is 
right.
    Ms. Granger. Did you in any place give us a cost of what it 
would take to bring this up to standard?
    General Ralston. I said I would provide for the record what 
that is. It is in the order of hundreds of millions of dollars.
    Ms. Granger. Thank you.

  MILITARY CONSTRUCTION SUBCOMMITTEE'S SUPPORT FOR OVERSEAS FACILITIES

    Mr. Hobson. Let me say, first of all, I appreciate Mr. 
Young coming today and you coming today, because I think that 
hopefully that sends some real strong messages. I do not think 
that another NATO commander has come in and talked to the 
MILCON Committee, as you mentioned before, about the importance 
of this in Europe.
    I was very frustrated last year because there are a number 
of people in Congress who do not feel the need to do the 
overseas MILCON. You and I have discussed this before, and we 
put some money in last year, which did not go quite as far as I 
thought it was going to go. And we will probably have those 
discussions again.
    But I really want to thank you for raising this level of 
awareness in the Congress, because without your help, our job 
is even more difficult. But the fact that you have done this I 
think is very important. The fact you came here today to 
testify, the fact Mr. Young came, demonstrates the commitment 
that the House Appropriations Committee has to trying to 
rectify this.

              PRIVATIZATION OF MILITARY HOUSING FACILITIES

    And I hope the administration has given a lot of--well, the 
previous administration gave a lot of verbiage to it; we did do 
a lot about it. We tried. I am hoping that the verbiage here 
has some action behind it, not only in your theater, but in 
Korea, elsewhere, and in CONUS. And we are trying very hard to 
get the privatization going.
    But privatization alone will not make it, and privatization 
will not work everywhere. And the services have great 
difficulty with privatization because they do not generally 
think that way. You know, a commander says, ``I've got to have 
housing. Go get it.'' Now we say to him, ``You have to go get 
it, but you have to do it in a cost-effective way, the way we 
do it in the private sector,'' and they do not have a history 
of doing that. So we have to slowly build that so we do not 
make mistakes along the way.
    And I told Mr. Young I am going to distribute this article 
to everybody, and if you have not seen it, everybody is going 
to get a copy of it. It is a very strong article about a young 
pilot and his family and what they go through when they deploy 
and what they face every day. And as I told the General, this 
is even more difficult for enlisted people to do. It is not 
easy for these people; it is even tougher at some of the lower 
grades to do. It is not easy for anybody.
    So I hope people look at this, people on these committees 
in both the House and the Senate.
    Mr. Young basically asked my question about what we are in 
Europe, and I think we know about where we are going to be. I 
know we have this review going, but we came down. You know 
about where your bases are. You have to reconfigure some bases. 
You have some DOD schools that you have to look at. You have 
force protection. I mean, you have all kinds of problems there.

                    NATO SECURITY INVESTMENT PROGRAM

    One of the things that happens that I hear about, and I 
want to talk about the NATO Security Investment Program, we 
always talk about, you know, NATO and money we put into NATO 
and money that others put in and what are the Europeans doing 
if we are there. The mission is not just for us; the mission is 
for them.
    When Bosnia got in trouble, we came forward when the forces 
that were there were not doing the job. When we went to Kosovo, 
you know, we were there going to Kosovo. We tend to be there.
    And so what I am concerned about is--I am going to read 
this, so I get it all in here, and then you can comment back to 
me: The United States contributes about 25 percent of the NATO 
Security Investment Program. Last year, the percentage equated 
to $172 million.
    One, what construction projects are eligible for these 
funds? What is the process used for distributing the funds?
    And what is the role of other NATO nations in that process? 
What is the U.S. contribution to NSIP, and have we always met 
that contribution?
    In the past, has the United States refused to let projects 
move forward because we could not meet our obligation? And what 
was the political fallout or perception by other NATO 
participants of this action?
    And why do some bases receive funds and not others?
    So I will give you that, and you can look at it here. I 
think you have already seen the questions. I do not know if he 
briefed you or not. If he did not brief you, that is his fault.
    General Ralston. No, I did not get all that. No, sir, Mr. 
Chairman. But let me answer part of that and some of it for the 
record.
    Could I get the chart I would like to put up there on the 
Bosnia and Kosovo?
    While they are getting that, let me talk about the process. 
You do have the NATO Security Investment Program, and like many 
things in NATO, they have a committee. There is the 
infrastructure committee, where all the nations are 
represented. They take a look at all of the eligible projects, 
and these are war-fighting projects. These are runways and 
hangars, as opposed to schools and housing projects and things 
you would need to--no kidding--go out and carry out a war. And 
these are prioritized by need.
    To give you an example, you mentioned, correctly, last year 
the United States' contribution was $172 million to this 
program. Over $200 million worth of projects were built on U.S. 
bases, U.S. installations.
    Now, it does not happen that way every year, but that 
iswhere the priorities fell out. So the United States forces benefited 
to the tune of $30 million to $40 million more than what the U.S. 
contribution was on that particular year.
    Let me use this chart right here, the Stabilization Force 
(SFOR) chart. I will try to make a couple of points. One, this 
SFOR is Bosnia; that is our Stabilization Force that we have 
got there, and I wanted to show the progress over the years.
    [Chart 3 follows:]
    [GRAPHIC] [TIFF OMITTED] T4873B.086
    
    General Ralston. In 1996, all the nations that were in, we 
had 60,000 troops in Bosnia. The U.S. is in the red bar there. 
The U.S. was 20,000 of that; we were 33 percent of the force 
that went into Bosnia. Notice that over the years, we have 
decreased. And by the time we get to 2001, we anticipate we 
will have less than 20,000 total. The U.S. piece of that will 
be about 3,500 and about 18 percent of the force. So we are 
making progress.
    But back to your point here, notice 34 nations: That is all 
of the NATO nations, plus an additional 15 nations, that are 
part of the Bosnia operation.
    Mr. Farr. How much of that is Guard and how much of it is 
regular?
    General Ralston. Today, in Bosnia, not much of that is 
Guard, the 3,500, because the primary unit that is there is 
from Fort Stewart, Georgia. Previous to that, the Texas 
National Guard was there and it was almost all National Guard. 
So it will flip-flop.
    During those times when you have a Guard rotation, the 
Guard will be carrying most of the workload. Right now, to 
answer the question, not a lot of it. But then the next 
rotation after October of this year will come back to a Guard 
unit, and much of it will be Guard, in the case of the Bosnia 
operation.
    [Chart 4 follows:]
    [GRAPHIC] [TIFF OMITTED] T4873B.087
    
    General Ralston. In Kosovo, over here, notice that the U.S. 
is about 13 percent of the effort, so other nations are 
contributing 87 percent of the forces in Kosovo. And in the 
case of Kosovo, we have 39 nations there. So my point is, we 
operate as a coalition. We operate as an alliance.
    Mr. Hobson. That KFOR does not include Macedonia, though, 
does it? Does that include the troops that you have in 
Macedonia at that staging area?
    General Ralston. That does not. There are approximately 400 
Americans in Macedonia. So that would be----
    Mr. Hobson. That is all?
    General Ralston. Yes, sir. It is about 5,800 to 5,900 total 
U.S., including Macedonia.
    Now, I would like to provide for the record the cases of 
whether the United States has ever failed to meet its 
contribution to the NATO Security Investment Program (NSIP) and 
what the political fallout was from that, because I do not want 
to misstate where we are.
    Mr. Hobson. Well, we have had some problems on that. I 
would like to get that in the record.
    General Ralston. Yes, sir.

        Status of Ramstein, Spangdahlem and Rhein-Main Airbases

    Mr. Hobson. Now, explain to the committee so they 
understand what is happening in Germany where we are moving off 
the airport and we are moving most everything to Ramstein.
    General Ralston. Yes, sir.
    Mr. Hobson. And there is some major commitment there of 
monies by the Germans so that we can accomplish this.
    General Ralston. Yes, sir.
    Mr. Hobson. I do not think most people are aware of what is 
happening there.
    General Ralston. For years and years, the major base in 
Germany for U.S. transport aircraft was in Frankfurt, Germany, 
at Rhein-Main Air Base. Over the years, as things have changed 
in Germany and the change of force structure and all, the 
Germans very much wanted to get that base back for their own 
purposes there.
    So a deal was negotiated between the Germans and the United 
States where we were given a certain amount of money for our 
facility at Rhein-Main, and then that would be used to upgrade 
two U.S. Air Force bases in Germany; being Ramstein, which is 
where the headquarters is, and Spangdahlem, home of the 52nd, 
fighter wing.
    Much and most of the activity was put into Ramstein, 
because that is where our C-5s, our 141s, our C-17s will come 
in to carry the cargo and the troops that go through there.We 
needed another runway, a runway extension. We needed some maintenance 
facilities there. But I think the number is something on the order of 
over $400 million that we got from the Germans to invest into Ramstein 
and Spangdahlem.
    Ramstein and Spangdahlem also benefit from the NSIP 
program, the NATO program, because that is a common NATO base 
and they can use it, it is eligible for that, and also from 
some U.S. investment. Now, the construction, if you went to 
Ramstein today, there are all kinds of bulldozers pushing stuff 
around and they are really working on the runway to extend that 
runway.
    Mr. Hobson. They are also going to do the fire station.
    General Ralston. And the fire station, yes, sir.
    Mr. Hobson. That is an inside story.
    John, do you have anything. Shall we go around a second 
round?
    Mr. Olver. Yes. I am getting better prepared. The testimony 
was very fragmented. It is just a huge amount of things that we 
have covered. And in truth, General, I am appalled at the 
magnitude of the problem that you have cited here.

               Request for Number of Personnel by Service

    It would be enormously easier for me, maybe some others, to 
understand this if we had kind of a spreadsheet layout of what 
the personnel by services are.
    Mr. Hobson. Let me just interrupt for a second. We have had 
some guests here today that I failed to introduce and they are 
leaving. They are from the countries of Azerbaijan and Ukraine, 
who have been observing our hearing today.
    Maybe you can get money easier than he can.
    [Laughter.]
    But we thank you for coming and observing today. And I hope 
to get to Ukraine some day. I have been to Azerbaijan. Maybe we 
can get back. Thank you for coming.
    Excuse me, John.
    Mr. Olver. It would be enormously helpful, to me at least, 
if I saw this in sort of a spreadsheet form where each of the 
services was a section of it. You could separate, then, what 
was family housing, what was bachelor housing. You could then 
define what of each of those categories were standard and what 
was substandard, and if you wanted to, put it in by country by 
country, and then you could really begin to see the picture.

                       Eucom Personnel in Africa

    For instance, in sum total in Africa, how many total of 
that 110,000 or 115,000 or whatever the exact number is, are in 
Africa, are actually based in Africa?
    General Ralston. Not a lot are actually based in Africa. A 
lot of people TDY that live in Europe.
    For example, we just completed training two battalions of 
Nigerian troops for service to Sierra Leone, for the ongoing 
conflict, that is going there. That was done in preference to 
sending our own battalions into Sierra Leone.
    Mr. Olver. So they are deployed from their normal base for 
a short period of time to help with the training?
    General Ralston. Yes, sir.
    Mr. Olver. Do we have any bases in Africa at the moment?
    General Ralston. We do not. I am trying to make sure----
    Mr. Olver. Well, I do not need you to try to----
    General Ralston. But I can submit----
    Mr. Olver. But country by country, I could even get down to 
it base by base, to really understand where the problems were.
    General Ralston. Right. We can do that.
    Mr. Olver. But that kind of a spreadsheet would be helpful.

              Proportion of Family Housing not to Standard

    Now, to deal with the housing situation, Representative 
Granger, when she was here, had asked a question about what it 
would cost to bring that up to standards. Looking at what you 
have given us, the substandard material for the Army and the 
Air Force, there is at least 80 percent of the sum total of 
those are over 40 years old. Not all of those are substandard. 
Some renovations have been made, so some of them have been 
brought up to standard, even though they are old. And lots of 
us live in facilities that are over 40 years old, if they are 
brought up to date from time to time.
    But there are major percentages there that have never had 
any kind of renovation in their over 40 years of age. And there 
is probably a good deal of that that is basically not 
renovatable, that ought to be torn down and replaced.
    General Ralston. That is true for some of that, but not all 
of it.
    Mr. Olver. Some of it. Well, in a spreadsheet form, it 
would be possible to lay some of that out.
    General Ralston. Yes, sir.
    Mr. Olver. Because it looks to me, if you go to your major 
chart on EUCOM, you have got 22,000 of substandard--assuming 
that the standard is either newer or it has been renovated, at 
least up to standard, the 37 percent that meets standards. But 
the other 63 percent that does not, most of that is very old 
stuff, and much of it has never been renovated. It was built a 
long time ago and much of it has never had any renovation.
    And if it has never had any renovation, you are having to 
put a lot of money into it if it were renovatable, and much of 
it probably ought to be torn down and replaced.
    Let me just take a number here. If you are going to replace 
half of that with new, half of that that has never been 
renovated and is that old, you are talking about $100,000 at 
least per unit, if not considerably more. And a decent 
renovation in this kind of stuff that has never been renovated 
is going to take $40,000, or thereabouts, per place to get it 
up to snuff.
    So I would suggest, and I realize that you said it was off 
the top of your head, that it is closer to $2 billion to get 
all of what we are using up to standard, either by partial 
replacement and partial renovation of that older material.

   Proportion of Barracks and Maintenance Facilities Below Standards

    Now, at the same time, you have, after going through the 
housing and laying out how difficult the situation is for you 
there, and this is why in part I have become appalled at the 
magnitude of your problem, your last three charts here show 
what the non-housing facilities situation is. And the non-
housing facilities situation in the case of the Army and the 
Air Force show a considerable part of the non-housing 
facilities that are failed or failing systems, and a much 
larger portion that has no failing systems, but does not meet 
standards.
    Now, I think we could probably presume that the failed/
failing systems section, which is 25 percent of each of those--
Navy is in much better shape; it does not have any of that. If 
you look at the Air Force and the Army facilities, you have a 
major portion of those mission-related things, which is the 
training facilities and the runways and the hangars or whatever 
it may happen to be, maintenance facilities, that really need a 
lot of money.
    In your testimony, you said that is the worst of it, thatis 
the worst of it, that is even worse-off than the housing. So we have 
got a sizable amount of need in those areas to bring things up to 
standard.

                               RETENTION

    All of that goes to retention. You know, the issue of 
retention that you--and it has to be partially housing; it has 
to be partially the training facilities, the mission-related 
facilities, and partially, say, the ancillary--the schools and 
the hospitals and the child development centers, which, it 
turns out, from all of your charts, show that just those 
facilities are generally in considerably better shape, except 
in the case of the Army.
    In the Army, even a considerable portion of the community 
facilities seem to be in failed, really difficult position. But 
on your charts for the Navy and for the Air Force, there is 
nothing that is in that failed kind of a relationship.
    Retention has to take into account those things, and the 
nature of the deployments, as well as compensation and so 
forth. So this gets back to questions that I was asking last 
week of the Sergeant Majors and the Chief Petty Officer for the 
Navy of the different services who came in and told us about 
what the conditions were.
    It seems to me retention has to take into account all of 
those factors. So I do not know which one is the most severe. 
It may well be that housing is the most severe, because it very 
directly goes, if it is family housing, to how the families and 
the spouses feel about the situation that they are in.

      CONGRESSIONAL INSTRUCTION OVER MILITARY CONSTRUCTION DOLLARS

    Then I think I would like to see what it is that your real 
property maintenance. Which parts of this, the real property 
maintenance dollars, which come out of the other budget, the 
defense budget, are addressed toward these problems?
    General Ralston. Right.
    Mr. Olver. We on MILCON do largely housing, but we also do 
the child development centers and the educational facilities 
and the hospitals, and I guess, to some degree, some of the 
training facilities.
    General Ralston. Right.
    Mr. Olver. So it is a little unclear. It is always unclear 
to me what real property maintenance out of the other budget is 
covering and what we are covering.
    Mr. Hobson. It is unclear to a lot of us.
    Mr. Olver. Well, it is very difficult to keep track. I 
think it is done this way to keep us from knowing what is going 
on. I am not sure. I have a feeling it is being done to keep us 
from knowing what is going on.
    And then, as the chairman examined you, we have the NATO 
Security Investment process, which, General, you have suggested 
that if the Europeans are going to put together a NATO Rapid 
Reaction Force, they are going to draw from that, and their 
investments and their personnel are going to come from that.
    We are now putting in 25 percent of what goes into NSIP, 
and they are going to want to reduce their output into the NSIP 
in order to cover what they are going to need for that other 
force. Maybe it is only in name only, maybe it is a difference 
in construction, but they would view this as being somewhat 
away from the NATO command structure, somewhat separate from 
the NATO command structure.
    And then, on top of all that, we have the strategic review 
going on. Do you know when that is going to be completed?
    General Ralston. No, sir.

         EFFICIENT BASING AND FACILITY CONSOLIDATION IN EUROPE

    Mr. Olver. You do not know? And we are going ahead with 
what is called efficient basing initiatives.
    In the one case, in the case of the Rhein-Main base and the 
consolidation to Spangdahlem, in that instance, about 13 
pieces, I think you testified, are being consolidated together. 
I am not sure whether those are units or whether those are sub-
bases, little bases.
    So we have a situation where you point out that there were 
858 bases, when the Wall came down 12 years ago. We have 
brought it down to 241.
    That obviously ought to be coming down; probably is going 
to come down somewhat further. In fact, apparently that is part 
of what you are doing with the efficient basing initiative, 
which I see you listed two of them. One is the Spangdahlem case 
in Germany and----
    General Ralston. Let me correct----
    Mr. Olver [continuing]. And the other one was Vicenza.
    General Ralston. They are both Army. It is not Spangdahlem. 
That is the Air Force piece. But it is going to Grafenwoehr, 
the 13.
    Mr. Olver. Oh, excuse me. Grafenwoehr.
    General Ralston. And the other one is in Italy.
    Mr. Olver. Right, right. Okay.
    Sort of an aside, I am curious about the Vicenza decisions. 
That is one that I visited. I was also appalled at the idea 
that that was a base that seemed to sit right in the center of 
a town, with apartment buildings, big apartments, the private 
apartment buildings right over the edge, looking over the edge 
into the basin, basically on the runway.
    I am curious, you might want to give us an idea of what is 
motivating that one, where they are coming from and are we 
actually closing any facilities in getting to that point?
    So, it is a lot of stuff I have thrown off here.
    General Ralston. Let me try to summarize.
    Mr. Olver. To understand this pattern, it needs to be put 
in a better--the spreadsheet context would help a lot in 
understanding, because I have a feeling that if we are going to 
bring bases down from 240 as part of the strategic review, we 
ought to be--we might look at this and see where are the worst 
places, where are the worst training facilities or, mission-
related facilities, and where is the worst housing? And we 
might decide, ``Oh my gosh, we have got to do that.'' But that 
may be exactly the places that ought to be triaged in the 
process.
    I do not know how this thinking process is coming together.

               DISCUSSION OF EUCOM SPREADSHEET PARAMETERS

    General Ralston. Let me try to summarize this way. First of 
all, I will provide, as you requested, a spreadsheet where we 
can go by service, by country, by married family housing versus 
unaccompanied and----
    Mr. Olver. You might do it by base for the big ones.
    General Ralston. And we can do it by base.
    Mr. Olver. I do not know. You get down to tiny little 
deployments of 200 that are sort of there permanent for some 
purpose. I do not know that one needs to know that, unless you 
would want to highlight that there is something really 
egregious in one of those places that is critical to our 
functioning, that we ought to know that there is housing or 
mission-related facilities that really has got to be done.
    Otherwise, maybe the big bases where there are several 
thousand people at one place or another would be a way of sub-
cutting within countries. It would help us to understand.
    General Ralston. First of all, we will provide that. I will 
take that as an action to do that.
    Secondly, you made an observation that I would like to 
highlight, and it is true, the United States Army in Europe is 
in much worse shape than the other two services. Over the 
years, for whatever reason, we are where we are. I do not know 
exactly how we got to where we are, but the service that needs 
the most help there is the Army.
    Let me talk about the efficient basing for a moment, and 
let me talk about it in the absence of the strategic review. 
Let us assume for a moment in the strategic review that the 
strategic review comes out that says, ``Yes, we still agree. 
You need a substantial number of forward-based forces.''
    Even if that is the case, what we have done in Germany, in 
my view, is not wise. We have tried to keep more installations 
open than what we need, and that is what I am talking about, 
the 13 little mom-and-pop Kasserne's around, where the 
infrastructure is a disaster. We are never going to put the 
infrastructure money in there to get those up to speed. They do 
not have a range to train on. So why don't we close those old 
facilities, quit pouring money into them, and put them----
    Mr. Olver. I certainly applaud that.
    General Ralston. [continuing]. On the range near 
Grafenwoehr, where you can make a marginal investment? They 
have already got good hospitals, good schools, good 
commissaries and all of that, good gymnasiums, where you will 
never have those things that the little 13 mom-and-pop 
operations have now. So that is what that initiative is about.
    With regard to the Italy piece, let me talk about that from 
a strategic point of view. My own view is, as a CINC, I have a 
much greater need for forces in the southern region than I do 
the northern region for the Balkans and all of the instability 
that is there.
    Right now, I have one battalion there in Italy. They are 
constantly overworked. They are constantly off to deployments 
all over the southern region, to Africa, wherever. If I had a 
second battalion in Italy, that would relieve the stress on 
those people a lot.
    Now, whether or not it goes to Vicenza, I do not know. That 
is rightly a United States Army decision. Army officials have 
gone down to Vicenza. They have looked at it. I can give you 
the pros and cons of going to Vicenza versus somewhere else. 
The housing and the commissary and all the infrastructure at 
Camp Ederle is probably the best that is anywhere in Europe. 
That is one of the pros of why you would want to put the people 
there and build on what you have already got.
    One of the cons is, you do not have a lot of space. It 
would be cramped. And it may not, at the end of the day, be 
exactly the right place to do it.
    But those are the kinds of decisions that the United States 
Army is trying to go through now, based on the money that the 
Committee gave us last year, to make some of those studies and 
decisions.
    Mr. Olver. If Italy is happy, if the people in the area are 
happy, I do not know that I should be too concerned about what 
looked like the layout of a situation like that. I mean, I have 
a huge old base that is right in the middle of a city up in my 
area, too. So it is not exactly an unreasonable thing.
    General Ralston. I understand.
    Mr. Olver. But then are you suggesting that there is a 
deliberate effort? Because yes, most of our deployments these 
days are toward the Middle East, although yours does not 
include the Persian Gulf. That is Central Command, I take it?
    General Ralston. That is correct. Our forces would go and 
support----
    Mr. Olver. And you have all the Balkans?
    General Ralston. Yes, sir. And let me give you----
    Mr. Olver. And the things which you are----
    Mr. Hobson. Why don't we do this, John?
    Why don't you give us a map? You do it when we go on a 
CODEL, of your command. And it shows a line that delineates the 
countries. I have seen it.
    There is a better one. It is a colored map of the area.
    General Ralston. We will get you----
    Mr. Hobson. It is easier to read than that one. Somebody 
pull that off the computer.
    General Ralston. Yes, sir.
    Mr. Olver. Yes.
    General Ralston. Okay. Let me go back. I will get you the 
matrix. The Army is by far in the worst condition. The 
efficient basing is an attempt to try to close the inefficient, 
old bases that we are never going to be able to get up to 
standard, and put them on a range where they can train. That is 
what that is all about.

             FUNDING THRESHOLDS FOR RPM AND MILCON PROJECTS

    With regard to MILCON versus real property maintenance, you 
know, we try to follow the rules and, you know, it has been a 
while since I was a component commander, but I think, back in 
those old days, if it was something greater than $200,000, it 
had to be MILCON; if it was less than $200,000, you could use 
real property maintenance to fix it.
    So if you have a big motor pool, it depends on how big it 
is. If it is a big one, you need MILCON to replace it.
    Mr. Hobson. And you never get it.
    General Ralston. And if it is a small one, you can in fact 
use real property maintenance funds to upgrade the facility.
    So there is a rather arbitrary break on whether it is real 
property maintenance or whether it is MILCON. We try to live by 
the rules that I think are established by the Congress in that 
regard.
    Mr. Hobson. And those lines get a little blurry at times.
    Why don't we do one more? The general is going to have to 
go at some point.
    Mr. Olver. He was going to say something more.
    Or are you done with what you were going to say about 
Vicenza?
    General Ralston. Only to say that, again, I am pushing--let 
me back up. From a strategic point of view, I need more forces 
in the southern region. And ultimately----
    Mr. Olver. So it is a deliberate, then, effort to move----
    General Ralston. Yes, sir.
    Mr. Olver [continuing]. Those down out of Germany into 
Italy.

                        OVER THE HORIZON FORCES

    General Ralston. That is a deliberate strategic decision to 
do that. Because, back to the Bosnia thing--slide that over 
there a moment--one of the things I want to do, and I have a 
proposal in now, is at some point here, the way that we get out 
of the Balkans is to have a deterrent force overthe horizon. If 
I have two battalions in Italy that can be in the Balkans in a matter 
of hours if they needed it, that is better than keeping people tied 
down in Bosnia. That is one of the reasons I want things in Italy, in 
the southern region.
    Mr. Hobson. At one point, there was some thought to putting 
a force in some country near there, across the water, like 
Hungary, Macedonia, someplace that gave some of the other 
countries a little pause; you could even get there faster. And 
I do not know whether that is still ongoing thought or not.

                            Taszar, Hungary

    General Ralston. It is certainly an ongoing thought, and we 
are looking at it. One of the things you get into is how much 
does it cost you to build the infrastructure.
    Mr. Hobson. Well, you have already got it at Taszar.
    General Ralston. You do have it at Taszar.
    Mr. Hobson. We spend a lot of money at Taszar.
    General Ralston. We do have it at Taszar. And as a matter 
of fact, the Hungarians have decided to close one of their 
other bases and to rally around Taszar.
    Mr. Hobson. Because we put a lot of money into Taszar.
    General Ralston. Well, it is true. But it helps NATO. I 
mean, it will be a NATO base, and so if we are going to put 
more NATO investment in, why shouldn't we put it into Taszar, 
where we have already made that investment, and everybody can 
use it? So yes, that is a strategic----
    Mr. Olver. Are we going to use Taszar?
    General Ralston. Yes, sir.
    Mr. Olver. And we have agreements that are long term for 
the joint use of Taszar, so that would be a reason.
    General Ralston. Yes, sir.
    Mr. Olver. That obviously is right next to the crux of the 
problem, which has been, up to now, Belgrade, although that is 
hopefully going to improve.

               Strategic Presence in Southeastern Europe

    General Ralston. True. I think the southeastern part of 
EUCOM is an area of instability. I wish it weren't so. But 
whether it is Syria, whether it is the Caucasus, whether it is 
in the Balkans, all of these are areas of potential concern, 
and that is why I think it is to our advantage to have the 
forces as close as possible, from a strategic point of view.
    Now, then I go back to the Army. I have to go back to the 
United States Army and say, ``You tell me where the best place 
in the southern region is to put this extra battalion.'' And 
that is why they are looking at Vicenza to see what they can do 
there. They need to look at Camp Darby. They need to look at 
other things around Italy.
    I do not know what the right decision on that is. That is 
something that the United States Army has got to work. We will 
work it with the committee and keep everybody informed as we go 
along.
    Mr. Olver. Is Vicenza the major Army focus in Italy? Air 
Force is----
    General Ralston. Air Force is at Aviano. No, no. Aviano is 
up to the north, close to Vicenza. And that is why this 
airborne battalion uses the air base at Aviano to get airborne.
    Mr. Olver. And the one in Sicily is----
    General Ralston. Sigonella. That is Navy.
    Mr. Olver. Oh, that is Navy. That is Navy, along with NATO.
    Mr. Hobson. John, let me go on to----
    Mr. Olver. Three short questions here, four.
    Mr. Hobson. If we can, then we are going to wind up.
    Chet?
    Mr. Edwards. Thank you, Mr. Chairman.

       Importance of Gen. Ralston's Advocacy for Overseas Milcon

    General Ralston, let me just underscore why I think it is 
so important for you to have been here today. You know, ``out 
of sight, out of mind'' is a problem, I think, when it gets to 
military construction, even in the continental United States. 
It is doubly a challenge when we are talking about overseas 
installations, where most members of Congress never will visit.
    As, you know, we do not have a legion of lobbyists around 
here fighting as we do for aircraft carriers, Air Force jets, 
Army tanks, when it comes to fighting for these quality-of-life 
issues.
    Mr. Chairman, I have to tell you, Sam and I have been 
reading this article that you mentioned a minute ago. I would 
love to join with you and other members of this committee to 
send this out to every member of the Congress. If every member 
of the Congress would absorb this article, I think we would get 
a lot more support in this institution for what you and Mr. 
Olver have been working on doing, trying to improve the 
commitment of funds to our quality-of-life issues.

    Top priorities of overseas enlisted personnel and their families

    Just one question: If we had today the spouses of sergeants 
from throughout your command, and on average these spouses had 
two children, two or three children, looking at the whole range 
of issues Mr. Olver referred to--housing, pay, education, 
health care, all of those that are vital quality-of-life 
issues--what do you think they would say to our committee in 
terms, if we asked them a question, ``What are the challenges 
of your day-to-day life as a family member in the European 
Command?''
    General Ralston. I think the first thing they would tell 
you, and I base this on studies that we have done, we have gone 
and asked the enlisted force and their families: education for 
their children is number one.
    And again, you are in an overseas situation with the DOD 
school systems. It is not like they are going to Fairfax County 
and other places. That is very high on their priority list. And 
we encourage that to be high on their priority list. We try to 
put a lot of effort on that.
    Once you get past that, they are all important. I mean, 
they are trying to say they do not want more pay.
    Mr. Hobson. And you are going to have an opportunity on the 
29th of this month to ask that directly of some spouses.
    General Ralston. But housing would be very important, 
because, as the chairman says, if you are the young mother and 
you have two kids and you are torn between carrying the two 
kids and the laundry down to the basement to get it done, you 
do not want to leave the kids alone up in the apartment. These 
are real-world problems that they have to deal with every day. 
So I think they would tell you that housing is pretty high on 
that list as well.
    Mr. Edwards. Great. Thank you.
    Thank you, Mr. Chairman, for inviting General Ralston here 
today.
    Mr. Hobson. And we will have some enlisted people, as well 
as officers' wives to come in and talk to the committee and 
give us some real-world experience of what is going on.
    I think Mr. Vitter is passing. Okay. Sam, then Bob.
    Mr. Farr. Thank you, Mr. Chairman.
    General, thank you for coming today. I think with 
theleadership that we have on this committee--I have only been on it 
one term, this is the beginning of my second term on the committee, but 
I have learned from the chairman and Mr. Olver that this is a 
committee, particularly with the chairman's viewpoint, of tough love. 
We love the servicemen, but we are going to be tough on how we spend 
the money.

                   Cost of Overseas Housing For EUCOM

    And the question I have is, to put it in some kind of 
perspective, you said in your opening remarks there are about 
100,000 service members and their families stationed in Europe, 
permanently assigned military professionals. In districts, we 
represent about 600,000 people, so it is about one-sixth of a 
congressional district.
    In the last few years, this committee has appropriated, I 
think by your testimony, a little over $1 billion that goes to 
housing and barracks. If we brought home that kind of money to 
our district for housing and barracks, we would be doing pretty 
well.
    Mr. Hobson. You don't? [Laughter.]
    Mr. Farr. Not yet, Mr. Chairman.
    I think what I get concerned about is that we ought to be 
able to build housing overseas cheaper than we build it at 
home. And the difficulty I am finding, now that we have a 
closed base, and the committee has had experience with a lot of 
communities experiencing this, last week we wanted to move 
people into some housing that was built by the Army in the 
1970s and 1980s, and none of the utilities can hook up to this 
house because the wiring and the piping are not up to code. And 
so there is a liability on the utility company, essentially.
    And I cannot understand why the military is being so dumb 
in the way they build housing and so expensive in the way they 
build housing. Why can't we build better housing, particularly 
overseas, where the costs should not be as great? I mean, the 
kind of housing that I have seen that is built in the U.S., if 
they were built under civilian code, the builders would go to 
jail. What we do in the military is we just pay them a lot of 
money.
    And the chairman has been asking these tough questions: Why 
does it cost us so much? And as I read your report, I mean, 
there are a lot of different figures in here, but I do not know 
if we are getting a good bang for our buck. And I am not laying 
blame. I think it is part of the bureaucracy which Congress has 
created in building military housing.
    But you know what we are doing, and you are very aware of 
this. I mean in most of the other technologies that we are 
incorporating now in the military, it is off-the-shelf 
technology, because we cannot keep up with technology 
development by doing it under military design. Yet we still 
want to build houses under some military design, and then we 
want to go out and use a U.S. contractor. A lot of these 
contractors have never built in the private market at all. They 
just live off the government, call themselves private 
developers.
    I am appalled at the accountability, or lack of 
accountability, that the military has in demanding that this 
housing be built really high quality at a much better, 
affordable price. And I just wondered if you could comment on 
that, sir.

                         EUCOM Force Structure

    General Ralston. Sir, three points. Number one, let me 
address the numbers. It is 115,000 uniformed members, but 
another 134,000 families and another 50,000 DOD civilians and 
families. So we are talking 300,000 Americans in DOD facilities 
in Europe.
    Secondly, with regard to the cost----
    Mr. Farr. Half a congressional district.

                    High cost of Building in Europe

    General Ralston. Half a congressional district.
    I think you would be somewhat appalled at how much more 
expensive it is to live in Europe than it is in the United 
States. You go to Germany, I live in Belgium now, things are 
much, much more expensive there than what they are here, in 
terms of construction, in terms of labor cost, work weeks are 
shorter, labor gets more pay, and so forth.
    So the idea that you could build an equivalent house in 
Germany for a cheaper amount than the United States, I do not 
believe is accurate. I think it would cost you more.
    Mr. Farr. Who owns the land?
    General Ralston. The Germans own the land.
    Mr. Farr. We lease it.
    General Ralston. I'm sorry?

                     Ownership of Facility Property

    Mr. Farr. The land that we build on is leased or bought in 
Germany, or how is the legal arrangement with the underlying 
title?
    General Ralston. Let me ask a question.
    Lieutenant Colonel Cox. Sir, the host nation owns the land 
which we do all our construction on. We basically improve 
facilities that they own. And so with regard to owning it, we 
do not have the real title, if you want to call it that. We 
improve it. They own the land also, but we do not pay lease 
costs.
    Mr. Farr. So they give us the land to build on?
    Lieutenant Colonel Cox. Correct.

                 Private Sector Collaboration With DOD

    General Ralston. Now, third issue with regard to why does 
it cost the military, here is an opinion, but I think it is an 
informed opinion from my previous days. The best housing I have 
ever seen anywhere in the Department of Defense was some 
housing we got built in Alaska, but it was done by the private 
sector and it was 801 housing, where they built it on the base. 
All we do is turn over for 20 years the housing allowance.
    Mr. Farr. That's all? There were no other guarantees?
    General Ralston. There were no other guarantees to do that.
    Mr. Farr. And if the base closes, they own the property, so 
they can sell it?
    General Ralston. If the base closes, I am sure we have to 
pay the lease, whatever that would have been at the time. And 
as the chairman says, you cannot do this in every case, but in 
that particular case, it went to the private industry and it 
says, ``Build a house, and, oh, by the way, build a house so 
you are going to maintain it for 20 years.'' Which increased 
the quality of what they did, which was to their benefit.
    Mr. Farr. In your testimony, you pointed out that a lot of 
this housing that we are trying to do was built before 1960. 
Most of us on this committee live in a house that was built 
before 1960, but we are not tearing it down.
    General Ralston. But most of the houses that you live in 
that were built before 1960 have at least had the bathroom 
upgraded or the kitchen upgraded in the 40-some years.
    Mr. Farr. Well, not my house. Maybe some others.
    General Ralston. Yours was probably built very well back in 
the 1960s.
    And we are not talking about tearing the housing down, 
although, as you say, you have to do a cost-benefit analysis on 
that. But many of these eight-plex stairwells that are there, 
there is nothing wrong with the basic structure. All it needs 
is to go and modernize it and upgrade it, and that is what we 
are trying to do.
    Mr. Hobson. The only problem I had was when we went to 
Europe the first time I went. Nobody could tell me what the per 
square foot cost was, which shows me that nobody is really 
looking at the overall costs.
    Now they do a little better. They have learned now to be 
prepared for stuff like that. But when I meet with private 
industry guys, that is the first thing a guy will tell me, is 
what the per square foot cost is.
    And services were not talking to each other. The Army was 
doing the same three-story walk-ups one way; Air Force was 
doing it another way. And there is some good in each one, but 
nobody was talking to each other. I think they are doing better 
at that now.
    By the way, if you go on our trip that we are doing in 
April, we are going to look at a privatized housing Air Force 
at Lackland that they have just built. And we are going to go 
to Fort Hood and see, hopefully, what they are going to do 
there, if they ever get it approved. And we are going to look 
at a Navy facility, too. So we are going to look at some 
privatization stuff and proposed privatization in this country.

                  ADAPTATION OF PRIVATE SECTOR METHODS

    I have been trying to figure out how we can do it in Korea. 
I would do it in Europe if we could figure out how to do it. We 
have just had our plate full trying to get it started here.
    Mr. Farr. Mr. Chairman, if there are problems with the 
bureaucracy, with the way we have to do this, then we ought to 
change that. I mean, that is what our capability is as 
lawmakers. But I think we ought to be able to get a much better 
bang for the buck for our service men and women in housing.
    You know, what your report says is every time we spend 
money for housing, it is sort of a push-pull between force 
objectives, the mission requirements, and that you either take 
from the mission and put into housing or you take from housing 
and put into mission. And we do not need to be in that kind of 
a fight.
    It is interesting, you said education is the number one 
concern of service men and women, of their kids. It is also the 
number one concern in the United States.
    The second concern, particularly in California now, is 
housing costs. The town that I grew up in, the planning 
department told me that the housing in the town that I am in 
now, and it was just a middle-class town when I grew up, is now 
$890 a square foot. So if you are going to rent a 500-square-
foot apartment, you are talking about a lot of money, thousands 
of dollars, $4,000 a month for an apartment like that.
    And that is what is happening, because when the service men 
and women are being stationed there or trying to recruit people 
to work in government as firefighters and police officers and 
so on, everybody wants to come work for these cities. They pay 
good wages. But they cannot afford the housing, and neither 
could anybody else in the public sector.
    So we have to get a lot smarter about how we build housing. 
And I think that the government, frankly, has done some really 
smart things. I am glad that our committee staff has come from 
the VA-HUD appropriations subcommittee, because I think in some 
cases HUD has done some smarter things than the Department of 
Defense has done.
    So we are going to be looking at this, and any help you can 
give to tell us about how the bureaucracy could be tweaked to 
make it work better, I would appreciate it.
    General Ralston. Yes, sir.
    Mr. Hobson. David, real quick?

              CHALLENGES OF BUILDING FACILITIES IN EUROPE

    Mr. Vitter. Yes, General, real quick, to follow up on your 
case of excellence in Alaska, at the beginning I asked about 
public-private ventures and you basically said it was more 
difficult in Europe, was not happening in Europe, was more 
difficult to get developers interested.
    If you can go into more detail, why is that? I mean, there 
are certainly developers there. They are certainly just as 
interested in making money. What specifically makes that model 
more difficult to put on the ground in Europe? Not that it is a 
model, as the chairman said, for every situation, but it is a 
model for some situations here. Why isn't it a model for some 
situations in Europe?
    General Ralston. To do fairness to this, I need to go back 
to the services and get--no kidding--the real reasons, and I 
will do that and provide that for the record.
    One of the issues, I think, that you get into is there is 
more nervousness about what is the long-term use of this base. 
Are you really going to be here for 20 years so we can get 
money back from our investment? Or is the United States willing 
to make the commitment that you would pay the German developer, 
or whoever it is, full lease for 20 years in case we close the 
base? There are some of those issues that are more difficult 
because you are dealing with a different legal system in all 
that we have.
    Mr. Hobson. In some of them, it is the buildings. They may 
build a different building to different specs than we do. This 
is part of the problem in Korea. And the residual value of it. 
The buildings, for example, in Naples are built in such a way 
that we would only build them to a certain number of stories, 
but they are built in such a way that the Italian developer can 
go back in and put more stories on them and make them even 
smaller units.
    So there are some design things in there. The facility in 
Naples is actually a leased facility, but it has certain design 
components to go back there. And we have had a struggle there 
in that one, and it is something you ought to go and look at 
some time if you get a chance.
    One of the things I would like to encourage all of the 
committee to do is go and look at some of this stuff and see it 
for yourselves. Because there have not been a lot of people, on 
the Committee or in Congress, who have lived in these sort of 
things or who have been exposed to them, and it is a little 
different in Europe than it is here on bases and facilities.
    So we are going to have another trip. We are not going his 
way this time, but we are going to Hawaii, Okinawa, Japan and 
Korea, in which you will see all different types of housing. 
Japan will be very good. Korea will be a mess, even though we 
put $80 million in it. I do not know what is in Okinawa. We are 
going to find out. I have never been there.
    But it will give you an interesting taste for what we are 
going to do.
    Robert?
    Mr. Aderholt. Yes, just briefly.
    In your testimony, you had talked about the funds derived 
from returning installations. Do you, off-hand, know the 
approximate number of installations that have been returned 
since 1989 to host governments?
    General Ralston. Well, in the case of the Army, for 
example, when they talked about the 800-and-some installations 
down to the 200-some, that is 600 right there.
    In the case of the Air Force, there were a number of major 
installations. We have only five bases left in the Air Force in 
Europe. You have Lakenheath and Mildenhall in England. You have 
Ramstein and Spangdahlem in Germany. And you have Aviano in 
Italy, and Incirlik is a part-time base, if you will, in 
Turkey, shared with our host nation counterparts.
    That is it. Everything else was basically turned back. So 
these are major installations, I mean, tens, and in the case of 
the Army, hundreds, in terms of the smaller.

                    FUTURE CONSOLIDATION INITIATIVES

    Mr. Aderholt. What do you perceive the future is for 
returning installations?
    General Ralston. I still think the Navy and the Air Force 
are about where they need to be in terms of consolidation. I 
think the Army has a way to go in terms of consolidation.
    And that is what we are talking about with the efficient 
basing, where you try to close some of these small 
installations and consolidate them in a better place, in a 
range, and I think it would be certainly more economical in the 
longer term.
    Mr. Aderholt. Thank you.
    Mr. Hobson. And that involves a lot of things. That 
involves schools, hospitals, commissaries, PXs, transportation 
to airports for people to get in and out. I mean, it is not as 
easy a program to do as people might expect.
    And I think the other thing to remember is that most of 
these bases are World War II or World War I bases that people 
have been on for a long time. So the infrastructure in a lot of 
them is bad.
    I can remember being in a tank commander's office, in a 
wooden building that was World War II at best, and he was a 
rather full-figured guy like me. And we were up three stories, 
and the only way to get out of that building, the escape out of 
that building, was out of a window. And neither he nor I fit 
through that window if that building caught on fire.
    And I worried about it. I have not been back there since to 
visit that facility. [Laughter.]
    But those are the kinds of practical problems that are 
there. This is an old, outdated building. I mean, it is just 
outrageous. And across the street is a quonset hut that was 
German, some building from then. And it is still being used. 
You go in there, and you think the stove is going to blow up in 
it in the winter. I have not been back there either.
    But I want to thank you, General, for taking the time to 
highlight these things to us. It is nice to have this 
commitment from you. It is nice to see you working downtown to 
do it. I want to assure you that we are trying to work it, too. 
And I think the big chairman being here sends a message that he 
is on board, and if he does not, his neighbor is going to go 
over and talk to him.
    Mr. Olver. Mr. Chairman, before you close up, could I have 
one minute?
    Mr. Hobson. One minute. All right.

                 ENVIRONMENTAL IMPACT OF BASE CLOSURES

    Mr. Olver. I am due someplace else very shortly. I could 
see you are just about to bring down the gavel.
    One area that I did want to talk to, and I want to lay it 
out, you are doing some consolidations. You are bringing 
together, in the case of Grafenwoehr or whatever it was, the 
several small mom-and-pop-type shops. And I said I applauded 
that, and it seems to me that we ought to do that in a lot of 
places.
    But I am concerned about what happens environmentally under 
those circumstances when you are closing down things. My 
impression is that while we have pretty tight relationships 
here within the states on environmental stuff, that it really 
ends up being a mixture of DOD regulation and whatever the laws 
of the local place may happen to be, whatever international 
agreements have been made between us and the host nation on the 
places where we are as to what has been done. And that can be 
really loose in some places.
    And while I suspect that in the case of Germany--I am 
probably right in this instance--it in fact ends up being 
pretty tight in Germany, in some other places, when you are 
doing those consolidations, we could leave a terrible problem. 
We ought not be in a position of leaving environmental problems 
when we do those kinds of consolidations.
    So I am just going to lay that out as an opinion.
    General Ralston. Yes, sir.
    Mr. Olver. And I know that it could, in its own way, end up 
with a whole bunch of other controversies within some of the 
places around the world. Not Germany, but I think could be 
quite serious.
    Mr. Hobson. That is pretty good, John. That was under two. 
[Laughter.]
    General, thank you very much for coming. We appreciate it.
    General Ralston. Thank you, Mr. Chairman.
    Mr. Hobson. Thank you, sir. Appreciate your coming over.
                                          Thursday, March 15, 2001.

                          HISTORIC PROPERTIES

                               WITNESSES

HENRY L. HINTON, U.S. GENERAL ACCOUNTING OFFICE
MAJOR GENERAL R. L. VAN ANTWERP, ASSISTANT CHIEF OF STAFF FOR 
    INSTALLATION MANAGEMENT, U.S. ARMY
REAR ADMIRAL MICHAEL JOHNSON, COMMANDER, NAVAL FACILITIES ENGINEERING 
    COMMAND, U.S. NAVY
BRIGADIER GENERAL MICHAEL LEHNERT, ASSISTANT DEPUTY COMMANDANT OF 
    INSTALLATIONS AND LOGISTICS FACILITIES, U.S. MARINE CORPS
MAJOR GENERAL EARNEST O. ROBBINS II, AIR FORCE CIVIL ENGINEER, U.S. AIR 
    FORCE

                       Statement of the Chairman

    Mr. Hobson. [presiding] Good morning. The committee will 
come to order.
    Everybody has a lot of different hearings on and we are 
going to try to hold our organizational meeting right after the 
hearing. There are a lot of different things going on.
    This morning, we are going to focus on historic property 
management. The services have under their control a large 
number of historic properties and confront the prospect of 
those numbers increasing significantly as Cold War-era 
properties reach 50 years of age, which I don't think is so 
old, but apparently it is. [Laughter.]
    Which is when they will be eligible for the Historic 
Preservation Act. I was asking the colonel if he and I were 
eligible for that, but I am a lot older than he is. [Laughter.]
    Over the next five years, approximately 40,000 structures 
maintained by the Department of Defense will be 50 years of age 
and must be evaluated for historic significance. As established 
by the National Historic Preservation Act of 1966, the 
department must, but not be required to, manage those units 
listed on the National Historic Register as well as any units 
that meet the criteria of being eligible for listing in a way 
that preserves their historic significance and integrity.
    As a result, it is estimated that the operation and 
maintenance cost of historic properties are, on average, two to 
three times the cost of nonhistoric properties.
    During my tenure as chairman of this subcommittee, I have 
become concerned over the high cost of historic properties 
management and believe that the high cost associated with 
improving and maintaining historically significant properties 
limits the amounts of resources that can be used to address 
other high priority needs, such as family housing.
    I have outlined these concerns in letters to former 
Secretary of Defense Cohen and the current Secretary Rumsfeld. 
However, I have called for this hearing to find out directly 
what actions are being taken to address this issue.
    We can't afford to continue to divert funds from our key 
infrastructure to cover the additional costs of maintaining 
nonessential buildings with minimal historical value. In my 
view, innovative funding and operating methods need to be 
pursued to reduce costs and improve the care of historic 
properties.
    If we could all agree on some new approaches, we may be 
able to free up some funds that could be used to improve the 
housing and working conditions of our military personnel and 
their families. This is the first time this subcommittee has 
conducted a hearing on historic property management, and it is 
intended to be an informational session to learn more about, 
first, the services' current and projected inventories of 
historic properties; secondly, the cost of maintaining and 
repairing these properties; and, three, the efforts being 
undertaken by each of the services to reduce costs and improve 
the maintenance of historic properties.
    Our first witness today will be Henry L. Hinton from the 
General Accounting Office. GAO recently prepared a report in 
response to the Fiscal Year 2001 National Defense Authorization 
Act, which required them to review historic properties with the 
Department of Defense. We will learn more about the results of 
this review during our discussion with Mr. Hinton.
    After this discussion, we will hear from the services' 
uniformed representatives responsible for the management of 
historic properties.
    Now let me first recognize our distinguished ranking 
member, Mr. John Olver of Massachusetts, for any opening 
statement he might wish to make.
    John?
    Mr. Olver. Thank you very much, Mr. Chairman.
    And welcome.
    Oh, the GAO has come to the table. I was looking for allof 
the generals.
    Welcome to all of the people who are going to be witnesses 
today.
    We have a responsibility to preserve and maintain our 
Nation's heritage, and all of the services are very proud of 
their heritage.
    We, as members of this committee, have an oversight of that 
preservation and maintenance activity, though it is partly 
divided with the other Defense Appropriations Subcommittee.
    I agree with the chairman's views, and certainly welcome 
innovation in dealing with the responsibility for the 
management of historical properties.
    I think it is great that some of these historical 
properties, most of them perhaps, are not sitting vacant and 
deteriorating, but are actually being used and used 
effectively. That is great, and it is particularly great 
because this subcommittee is charged with dealing with the 
housing and quality of life for all of the people who serve in 
the armed services, but also with the replacement and the 
maintenance and the upkeep of all the mission-critical 
properties. In sum total, with all of what is being done, I 
think we are likely to be falling behind on that.
    I am particularly struck by the statistics here of having 
thousands and thousands, and likely to have 40,000 or 50,000 
such properties, which pass the first line of historical 
significance at 50 years of age. And what then, are the other 
sieves that have to be put in place, and what kind of 
innovation can be plugged in to use them where they are useful, 
and what else to deal with them?
    So this is an important hearing, in terms of the impact of 
maintenance and upkeep on our budgets, and I am looking forward 
to the testimony that you will be giving.
    Mr. Hobson. Thank you, Mr. Olver.
    Mr. Hinton, your written statement has been entered in the 
record. I would like you to please summarize your testimony, 
and you might introduce your two bodyguards here.

                   Statement of Henry L. Hinton, Jr.

    Mr. Hinton. Thank you, Mr. Chairman, Mr. Olver and the 
members of the committee for the opportunity to talk about 
management of historic properties.
    With me today are two of my colleagues: to my left, Michael 
Kennedy, and to my right, Richard Meeks. These are the key 
analysts who did all of the field work in conjunction with the 
work that we did in response to the mandate that you mentioned 
in your opening statement.
    I will just briefly summarize a few key points.
    First, there are criteria that DOD installations use to 
evaluate whether a property is historic. It is important to 
note that most of the decisions regarding historic properties 
occur at the installation level.
    Second, the military services do not have an accurate 
inventory of their historic properties, primarily because the 
installations do not update their real property records when 
additional properties have been determined eligible for listing 
on the National Register. Our review of the services' real 
property and cultural records indicate there are about 17,300 
historic properties in DOD or about 5 percent of its total 
properties.
    Third, our visits to nine installations found that the 
majority of the historic properties are being used. We found 
that 87, or 4 percent, of the historic properties at the 
installations we visited were vacant. The installations were 
taking actions to lease these facilities to private sector. For 
example, Fort Sam Houston is developing plans to lease about 40 
buildings.
    My fourth point, although about 70,000 properties will 
reach 50 years of age over the next 10 years, it is unknown at 
this time how many will meet the criteria to become eligible 
for listing on the National Register.
    Approximately 46,000 or 63 percent of these properties are 
family housing, as you have mentioned in your statement there, 
Mr. Chairman, and the services' planned housing privatization 
initiatives could significantly reduce the number of these 
family housing properties that we will have to evaluate for 
historic purposes.
    And, Mr. Chairman, you are probably aware, we have been 
having conversations with your staff here about some follow-on 
work in the housing area and would be happy to accommodate 
yours and the members' interest in that.
    Finally, there has been considerable debate over the cost 
of maintaining historic properties. We found that data is not 
readily available to identify the cost of maintaining historic 
properties. In addition, the services do not account or 
separately distinguish between money spent to maintain historic 
and that spent on nonhistoric properties.
    Cost data that we examined at several installations and our 
review of prior DOD reports shows that the size, age and unique 
features of some historic properties could result in higher 
maintenance and repair costs for historic properties in the 
year the work is performed.
    Mr. Chairman, that concludes my opening remarks. I and my 
colleagues stand ready to respond to you and your colleagues' 
questions.
    [The prepared statement of Henry L. Hinton, Jr. follows:]
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                   GENERAL AND FLAG OFFICER QUARTERS

    Mr. Hobson. Okay, I want to ask one question, and then I am 
going to go to John. And I really want to get out in front of 
this thing.
    One of things that we changed, and you didn't hit on this, 
there are general and flag officer quarters, and I think a lot 
of them are historic. One of the reasons I think they kept a 
lot of those is that we couldn't build new general officers 
housing in excess of 2,100 square feet because that was the 
law. We changed that law.
    I don't know whether you agree with the fact that that is 
the reason they didn't do it.
    My opinion, in the places I visited, those general officers 
houses were bolder and bigger and difficult to take care of, so 
they generally tried to hold on to those. And I can't really 
blame them for doing that. But do you agree that that was one 
of the reasons they did it?
    Mr. Hinton. We did not have that as a specific part of our 
inquiry, looking at that particular reason. But on the cost, 
they are proportionately greater just because of their size, 
their age and those types of things.
    Mr. Hobson. Well, I can tell you, if you go--and I will 
just pick out one--if you go down to Fort Monroe, there is $1.5 
million they wanted to put into one house out there. And just 
so that I pick on everybody the same, we went up to the Naval 
Academy; they stole $3.5 million out of O&M money and re-did a 
house. And let's pick on the Air Force, too. They have a really 
fine kitchen out at the Air Force Academy house.
    And, you know, we can go on and on about this stuff. You 
know, there is one base I visited--and I know I am going to 
hear from the senators and congressmen now--but you go down to 
Fort Monroe, it is a total historic base. And in my opinion, we 
ought to turn that over to the Park Service or something and 
then we will can rent it.
    But the money that has gone into there, and continues to go 
into there, is very difficult for me to justify when I am 
trying to--I mean, you have to see some of the slums that some 
of our kids are living in.
    Well, I will ask them about this particular question, then.
    John, do you have a question that you would like to ask?

                               INVENTORY

    Mr. Olver. Yes, I would like to.
    Well, you had said, Mr. Hinton, that the decisions are made 
at the installation level. I would assume that certainly the 
inventory ought to be done at the installation level, but it 
seems to me that the critical thing is whether that first sieve 
of reaching an age of 50 then leads to a placement on the 
National Register.
    Somehow, whether it reaches to that level somehow along the 
way, it seems to me that there needs to be a centralization, at 
least to the consideration of what those inventories are, 
because if you look at every installation all over the place, 
we have huge numbers of those.
    Unless we end up having some kind of central review of that 
process within the services or within DOD, we are going to be 
adding a whole lot of pieces, which do not have unique 
historical significance, to the problems of having what you 
call unique features that lead to cost and things of that sort.
    I will let you answer, but I want to make just one other 
point. I would like to know what kind of centralized data; you 
say there is no centralized data. How do we get a centralized 
inventory, a book of data, essentially, on these items that are 
coming up?
    You know, we are in a situation where much of the housing 
in Korea is going to be 50 years old within the next few years. 
Now, much of that ought to be torn down. Maybe it ought to be 
preemptively torn down. I am not sure. Depending upon how this 
moves toward historical significance and how that whole process 
is going, we are giving a lot of consideration to what we need 
to either to tear down or to replace or to renovate housing 
which there has not been anything done with in virtually 50 
years.
    Mr. Hinton. I think you are raising some very good 
questions. When we got in, we couldn't find good data as a real 
starting point for our work. That is one of the things I think 
its very important to keep pressing on.
    I think one of the things that our work has done is to 
prompt a movement to come up with a comprehensive inventory 
amongst the services of those properties. That is the first 
step that needs to take place.
    Once you have that, then you need to step back and look at 
the plan that you need to think about as to how to approach 
those listings on that inventory. The criteria, really, that is 
specified in the National Historic Preservation Act, goes to 
historical events, relationship to historic people, real 
significant architecture, not necessarily those 50 years old, 
when it gets to that point in time in its life. That is a 
general criteria, but that follows the other criteria that 
comes in the process.
    Once the department and the services have that inventory, I 
think then they will be in a better position to decide how to 
approach dealing with that inventory. Programmatic agreements 
is one type of a tool that they have experimented with, where 
they can look at classes of property, particular types of 
housing or wood products that we have seen from the old World 
War II wood, that they have looked at it in the aggregate and 
been able to demolish some of that after they have gone through 
a consultative process.
    So you are absolutely right to be pushing on this, because 
you can't start unless you have a good handle on what the 
requirements actually are.
    Mr. Olver. Have you proposals for how?
    Mr. Hinton. Yes, we have been working with each of the 
services as we have done our work, and through the visits that 
Mr. Kennedy and Mr. Meeks have done through the installations 
to meet with the real property officers and the cultural 
research folks out there, to start one and get that list to 
designate those that are already on the historical list, those 
that are likely to come up and maybe be eligible for that list, 
so that they can start doing the planning and the evaluations 
over a period of time.
    And perhaps, what the Army is doing--and I think the other 
services will probably follow in suit--is maybe begin five 
years or so before the 50 year time line comes up and start 
looking at some of these properties with the view that maybe 
some of these tools can help lower that cost.
    Mr. Olver. Well, just to follow up with my Korea example, 
the housing which we are going to be seeing a little later this 
year--I think that is an important trip for members of this 
subcommittee to take, to see what we have been hearing a lot of 
anecdotal information about.
    If you take that, all of those things are historical 
events. All of them are historical people. And the architecture 
is surely military inadequate or military gross, some good 
title that is there.
    I have been handed a note that says we have no obligation 
to deal with historical properties outside the 50 states or our 
territories perhaps. I am not sure.
    But the example, while it is off base on that--no pun 
intended--in that aspect, it can probably be replicated in a 
lot of places that are within the 50 states.
    Mr. Hinton. Your point is right on mark, because maybe you 
don't need to replicate it in all 50 states, maybe just one.
    Mr. Olver. Which installation? If it is all----
    Mr. Hinton. That is part of a process.
    Mr. Olver. There has to be some process.
    Mr. Hinton. Right, I agree with that.
    Mr. Hobson. We are going to try to get everybody in here 
for questions, so we can get the services up here by about 
10:15.

          PROCESS FOR INCLUSION ON NATIONAL HISTORIC REGISTER

    But there is one thing you didn't say in your opening 
statement, that you need to set the groundwork for everybody 
here.
    As I now understand it, they don't have to put a particular 
building on the historical list, that it is not mandatory that 
they do it. Is that right? Somebody makes that decision.
    Mr. Hinton. It has to go through a process. There has to be 
a triggering event. That might be a revitalization of an area, 
some major repair or maintenance on a project.
    Mr. Hobson. What about a tear-down?
    Mr. Hinton. I think the tear-downs would have to go through 
the similar process that is spelled out in the guidance, sir.
    Mr. Hobson. And the SHPOs have different rules, different 
ways of how you handle this. Some places you can take nice 
pictures and a video, for historic purposes, of what was there, 
and that satisfies you. Other places might say, ``Well, the 
only thing you can do is make this back the way it was in 1902 
or something.'' And so there are different standards, are they 
not, as you deal with the SHPOs in different areas?
    Mr. Hinton. I think that the criteria spelled out in the 
act, and as well as in DOD policy is good. The criteria is 
good. I think the implementation might vary on some of the 
installations.
    One of the things, for example, that we thought might be 
helpful is to capture the experiences of all of the services as 
they deal with the various SHPOs to see what lessons might work 
better in other locales as they agree to certain things, just 
like you use the idea of the tape. We don't have that now. The 
services and all of the installations are operating 
independently in that regard. Maybe that might be one 
suggestion that would work.
    Mr. Hobson. Another service has a good example; they tear 
them down.
    Mr. Hinton. Well, that is true, too. But, I mean, it was 
captured by a process that they have to go through, but they 
have to look at different ways to make that process work for 
them.
    The idea of the programmatic agreements, you know, and 
maybe keep a replica of a structure in one place or maybe a few 
places, but not every state, may work. There are different 
tools that we need to explore.
    We found, through our work at all of the installations, 
that the consultation process with the SHPOs seems to be 
working very well.
    Mr. Hobson. SHPOs are State Historical Preservation 
Offices.
    Mr. Hinton. Right.

                     HISTORIC PROPERTIES IN FLORIDA

    Mr. Boyd. Thank you, Mr. Chairman. Mr. Chairman, I am going 
to have to leave before the service representatives speak. Part 
of my question is going to be to them, and maybe they can 
provide the answers for the record when they have a chance to 
make their presentation.
    But in preparation for this meeting, we called the two 
military facilities that are in the district that I represent, 
Tyndall Air Force Base and Coastal Systems Station. Coastal 
Systems Station, of course, is a Naval facility. And we asked 
about this historic property issue.
    The answers that we got from Tyndall was that the only 
historic property they had was a chapel. We asked how many 50-
year-old buildings they had. They had several, but they did not 
know about the evaluation process they had to go through.
    The Naval facility said that they had some buildings that 
were getting close to 50 years old, and they are all slated for 
demolition. But they haven't been done yet, because they didn't 
have the money to do it and didn't seem to know a whole lot 
about the evaluation process.
    So really, I guess my question is this: What efforts are we 
making to educate our base commanders and the appropriate staff 
people of what has to be done here?
    So maybe Mr. Hinton will take a stab at that, and then the 
service reps also would take a stab at it when they have a 
chance to.
    Mr. Hinton. Sir, at the nine installations we visited, each 
of them had a cultural resources management officer there as a 
full-time job in eight of them, and one had the duty as 
collateral. We met with them and went over the process that 
they were following.
    Now, we did not visit all the other ones that you 
mentioned. But of the nine that we did, eight had full-time 
folks who were responsible for these duties and were well-aware 
of the process it had to go through and actively engaged in the 
process.
    You might need to ask the services, when they come up, if 
they can maybe check into that or maybe we can ask for you, if 
you would like us to.
    Mr. Boyd. And it very well could be, Mr. Chairman, that, 
you know, we didn't get to the right people, or the person we 
talked to couldn't get us to the right people.
    Mr. Hobson. The other thing is that the Air Force doesn't 
have near the problem that the Army and Navy has because it is 
not as old a service. But it did inherit some places like 
Wright-Patterson, places like that. But the Army really has, I 
think, the biggest problem of all, with all of the facilities 
it has, but the Navy does, too. But those bases may not be that 
old.
    Mr. Boyd. Thank you, Mr. Chairman.
    Mr. Hobson. Sam?

                          MONTEREY, CALIFORNIA

    Mr. Farr. Thank you, Mr. Chairman. I appreciate you having 
this hearing.
    I represent a lot of old California, where California 
governmentbegan in Monterey and on the Monterey Peninsula. The 
buildings that the military--the Presidio of Monterey are the oldest, 
continuous military property in the United States. It is not here on 
the East Coast. It is on the West Coast.
    I am surprised that it has taken so long to have this 
hearing. And I appreciate the chairman's bringing your 
attention to it, ratcheting up the significance of the process 
you have to go through.
    I am angry that we spent so little time trying to 
understand how many historic properties there are yet when the 
military parades itself, it is all about its history. And if 
you go to any of the forts around here, they are really proud 
of it. And then there is are requests for military museum 
money, and nobody has thought about managing the incredible 
living museums you have in your historic building inventory.
    You said something that I think is the problem. That is 
that there has been no difference between maintenance of 
historic properties and everything else.
    And I think you also go on to say that there is a cost 
problem, I would dispute that, because if you work with SHPOs--
for example, in California--the process for repairing doesn't 
even reach that.
    But we have an alternative building code in California for 
historic property. And it is, many contractors tell me, cheaper 
if you can restore.
    And in fact, I found out that with historic properties that 
the requirement under federal law and state law, SHPOs, have 
nothing to do with the interior of the building. It is only the 
exterior.
    So here is what I want to suggest and propose. One of the 
buildings that is really significant, and many members of this 
committee, including the chairman, has visited it, is the Naval 
Postgraduate School in Monterey, which was built as a hotel in 
1880. And many people don't know, but that hotel had 20,000 
acres of land around it, which is now called Pebble Beach and 
17-Mile Drive.
    Mr. Hobson. Did we get our value for that? [Laughter.]
    Mr. Farr. We, the Navy, bought the hotel in 1948 for $2.3 
million, which is about the cost of a house in Pebble Beach, so 
you got a good deal.
    Herrmann Hall and the senior officers quarters are eligible 
for listing in both the National Register of Historic Places 
and the state registry but have not been listed.
    And I find that you have not dedicated any of your budget 
to the preservation of this significant property.
    Mr. Hobson. Now he is GAO. He is not----
    Mr. Farr. Well, I am just doing this in a generic sense 
because GAO has to approve this stuff, and they are usually the 
bottleneck. [Laughter.]
    We have a new admiral out there who has a really great 
idea. He said--and I would like to see if we can do this, Mr. 
Chairman--create a demonstration program out there. He said 
this was formally a hotel. It is a beautiful spot. We have 
hotels all over Monterey. Why doesn't the public come in and 
rent the historic hotel for weddings? And the school could take 
the revenue from the rental fee and put it into upgrading the 
historical properties on base.
    It doesn't affect the mission at all. It brings in extra 
revenue, as long as that revenue can be recaptured and put back 
into historic buildings there. He has innovative idea and would 
like to do this as a demonstration project.
    My question is: It seems to me that the problem here, as it 
is with so much of the military command, is the decisions are 
made at the local level, but then the permission or the control 
is here in Washington, and there is sort of one-size-fits-all 
approach.
    And I would hope that one of the things that we could get 
out of this is that we ought to leave it with the state 
historical offices, and as you said, each of them are 
different.
    Mr. Hinton. Right.
    Mr. Farr. If you could allow the local command to work with 
the state to allow some local innovation, and not go through 
this process that you always have to go through of bidding out 
all the contracts out of Pentagon, and let it be done locally, 
I think you would, one, bring down cost; two, get the job done; 
and three, have a much better respect for the military's 
appreciation for its historical presence in this great country.
    Mr. Hinton. Mr. Farr, I think that you are going to 
probably hear from the services this morning some of the things 
that they are looking into, and they are a little bit different 
than what some of the prior history has shown.
    We need to be mindful of opportunities, that have potential 
and to make some good business decisions. If we have successes, 
we ought to try to replicate them, so long as we are within the 
legislative boundaries that we have to operate in, or if there 
might be a need to change some of that at some point in time. 
But I think good business cases ought to get looked at.
    Mr. Farr. And you won't ding him when he has those great 
suggestions?
    Mr. Hinton. No, I think it is worth, when you think it 
through----
    Mr. Farr. That is how----
    Mr. Hinton. But I feel that, it is the same thing that I 
was saying earlier that there is a good opportunity here, I 
think, to capture some of the lessons learned that we have seen 
across the entire process where things have worked, or problem 
areas, and replicate them elsewhere so long as we are within 
the law and what the guidance permits.
    Mr. Farr. Well, are there any provisions of that law and 
guidance that are crippling the ability to do this?
    Mr. Hinton. I think that there is flexibility there. I am 
not aware of any, based on the work that we have done, that has 
really bounded the services quite yet.
    Mr. Farr. Can we ask generically, if there is any knowledge 
of those crippling factors, would they let the committee know?
    Mr. Hinton. Sure, they are right here behind me.
    Mr. Farr. Some of them are shaking their heads ``yes.''
    Mr. Hinton. There might be a few there.
    Mr. Farr. So I want to know who those are.
    Okay.
    Mr. Hobson. I think that there is no question that 
thegeneral officers quarters were kept and, in many cases, things done 
to them mainly because they wanted to keep those big houses and 
couldn't get any relief.
    And I think there will be a change in that now that they 
can get some relief from that and keep the ones that are truly 
historic, you know, keep those or at least not occupy them, 
maybe, like they did if they are not functional.
    When we put this kind of money in some of these buildings, 
and we can't build an apartment for some young soldier, I have 
a hard time with that.
    So if there are no further questions, we will get to the 
services here. I think everybody is anxious to get at them.
    Mr. Olver. Maybe one of the things we ought to do is have a 
cross-sharing. If the SHPOs are so interested state-by-state 
being involved in this and making the decisions, maybe there 
ought to be a 50-50 military and state coverages on this.
    Mr. Hobson. I think the services would be more than happy 
to entertain something like that, and that is one of the 
innovative things that we have tossed out, is that maybe we 
need to allow private funds to come in, in certain places.
    I will give an example. General Van Antwerp and I have 
talked about a house at West Point that is a historic house. It 
is occupied by one of the deans or something there, and it 
constantly needs work, and it is an old house. No matter when 
we get done with it, it is still going to be an old house.
    But maybe one of the better ways to handle that, rather 
than our continually putting money into it, is that we could 
find a donor who would like to keep that house, if it has some 
significance to that person, or an outside group that would 
like--and I don't want to start calling these, like the GE 
house or something like that, but, I mean, if there was a 
little--that somebody wanted to rehab that, you know, we ought 
to find a way to do that, rather than taking the money we would 
use to build a new house there. If they want to keep that one, 
then that would be a way to do that.
    That is not easily done in the services, and the language 
is not particularly good in the law for that right now. And 
that is one of the things we need to look at. The law may not 
be real good either, I am not sure, on the issue that you have. 
But I am not sure that we couldn't find a way to do that.
    Mr. Hinton. The key is making sure we understand what the 
barriers are to some of these, and then we find, maybe, what 
the solutions might be.
    Mr. Hobson. Right, and that is why we are having this 
hearing today, is because, in my opinion, nobody was really 
addressing this in a broad sense, and it was going to cost us 
more money, and it is costing us money now. And yet the answer 
isn't tearing them all down and the answer isn't fixing them 
all up. We have to find innovative ways to do it.
    We are going to bring up the services now.
    And we thank you very much, Mr. Hinton.
    Mr. Hinton. Thank you.
    Mr. Farr. That is what I would like to try to do, is work 
with the base commander there, Admiral Ellison, and see if we 
could get a demonstration program, so that he could recycle the 
proceeds that he receives back into preservation of his 
historic structures.
    Mr. Hobson. The National Parks are doing it.
    Why don't you all come up now?
    Our second panel of witnesses today will be the senior 
engineers responsible for historic properties from each of the 
services. We look forward to hearing your observations, and 
your written statements have been entered in the record. But 
please summarize your testimony for us. And in order of 
testifying, we are going to have the Army go first, which is 
Major General Robert Van Antwerp, assistant chief of staff of 
the Army for installations and management.
    General Van Antwerp?

               Statement of General Robert L. Van Antwerp

    Major General Van Antwerp. Thank you, sir.
    Members of the subcommittee, I just want to thank you for 
the opportunity to come to you about historic properties, a 
very important subject to us, as you know, because of our large 
inventory.
    We have over 12,000 of our 116,000 buildings that are on 
the historic record today. And over the next 20 years, if you 
take the percentage that we think will probably be on the 
Historic Register, it will add another 6,000.
    So this is a significant challenge, as we have already 
talked about on numerous occasions, and I would like to tell 
you a little of what the Army is doing to develop a 
comprehensive strategy to deal with this large inventory.
    This is also in the context of underfunding in our RPM 
accounts for a number of years, which contributes to the 
maintenance of these already old buildings.
    I would like to, in a very short amount of time, highlight 
four actions that we are taking, and then we can talk further 
about them if you desire.
    The first one is what we are doing to address the GAO idea 
of our inventories, that we have basically two databases that 
we have run up until time. One is in the environmental quality 
arena and cultural resources, and the other is in the real 
property.
    And so the idea is, we are blending those into one 
database. As the GAO said, we are getting fields of data that 
will give us an ability to predict what might be coming 
forward. In other words, when they hit the 45-year mark, we are 
targeting facilities to see what opportunities we have with 
them.
    The second thing is that we are streamlining the 
consultation process. We did over 8,000 consultations last year 
on historic properties.
    The third thing is to look for programmatic solutions, and 
we are working with the other services to allow us to take a 
category of buildings and deal with it in a special way.
    And then, finally, we are looking at out-leasing, 
privatization and other innovative ways.
    In the streamlining area, what we are doing is we are 
working with the Advisory Council on Historic Properties to 
develop this alternate procedure that will streamline the 
consultation process.
    Mr. Hobson. Who is that advisory council?
    Major General Van Antwerp. They are a national organization 
set up with a certain group of people. It has four people at 
large, it has a mayor, it has a governor, it has representation 
from federal agencies. And that is kind of the ultimate appeal 
authority that you go to if there are policy questions.
    Mr. Hobson. Is that under statute or how is that----
    Major General Van Antwerp. It is. It is established under 
statute, and it is a particular standing body. It is called the 
Advisory Council on Historic Preservation.
    So if you had dealings with the SHPO, the State Historic 
Preservation Officer, and it was elevated, it would be elevated 
to that body, if there was a policy question.
    Part of the idea of this alternate procedure is to develop 
a standardization so that you wouldn't have to consult on every 
building. You would develop a management plan, and then, if 
this building fell within it, you wouldn't have to consult. 
That is part of the notion, to really streamline.
    We think the cost avoidance here could be around $1.5 
million to up to even $5 million a year, because we had 8,000 
consultations last year, which is a lot.
    Programmatic solutions. One of the great success stories 
over time for all of the service was how we dealt with World 
War II wood. It was done under a programmatic solution.
    For the Army, what it meant was we kept a small number of 
these World War II wood buildings at a single installation, 
Fort McCoy in our case, and then we were able to record for 
history all the other World War II buildings that have our 
license to take them or use them depending on----
    Mr. Hobson. I am really concerned about that, because I 
think the Air Force destroyed my barracks down at Lackland I 
went to basic in. I thought that ought to be on the Historic 
Register. [Laughter.]
    Bill Young went down to look for it, and nobody can find 
it. I don't think I could find it, it is been so long.
    Major General Robbins. It's mulch. [Laughter.]
    Major General Van Antwerp. Well, we have a couple of other 
property types like that that we are looking at for possible 
programmatic solutions. One is our Capehart-Wherry housing. We 
have about 19,600 sets of these, built in the 1950s and 1960s. 
And yet what we would like to do is to retain a few of them and 
record the historical significance and then give license to do 
what we have done in some cases; we have taken a fourplex, 
renovated it and made it into a duplex, but it was because we 
were able to set aside a few of these and then deal with the 
other ones on this programmatic solution.
    One particular example on that is in Fort Huachuca. We 
saved 19 Capehart-Wherry houses, and over the next 10 years we 
can either demolish or renovate or do what we would like to 
another 1,500 over that period of time. So by saving a few, we 
are able to do what we need to do with the rest of them, 
without consulting on each building.
    Finally, on some other innovative strategies, we have a 
partnership with the National Trust for Historic Preservation, 
a cooperative agreement, signed agreement, that we are working 
with them to see what are some other alternatives here, how can 
we get private money.
    Mr. Hobson. When did you sign that?
    Major General Van Antwerp. I think it was in the fall. But 
I will get the exact date.
    Mr. Hobson. This last fall?
    Major General Van Antwerp. Yes, sir. Fall of 1998, so even 
earlier.
    Mr. Hobson. Good.
    Major General Van Antwerp. What we have done under that 
cooperative agreement is we are looking at five particular 
installations, one of them is Fort Monroe, to see what we can 
do there, how we can infuse private money, what are the 
opportunities out there.
    Mr. Hobson. You have a big tourist attraction.
    Major General Van Antwerp. Tourist attraction, right.
    So that is partly what we are trying to do in the 
innovative program.
    The other thing is, in our housing privatization, if we 
look at Fort Lewis and Fort Meade that are two of our pilot 
sites, there are 412 historic family homes in that inventory 
there. So by doing a broader housing privatization, you are 
able to provide the revenue so that the developer will take the 
historic properties with them, even though, you have higher 
maintenance costs for them also.
    But if we look across the board, if we do the 20 
installations----
    Mr. Hobson. You mean they are not going to do anything to 
those 412 historic----
    Major General Van Antwerp. They would take that as part of 
their inventory. They would maintain it, upgrade them, comply 
with the State Historic Preservation Offices. You know, they 
would consult just like we would do. But that inventory would 
be transferred to them.
    Mr. Hobson. So it is their problem.
    Major General Van Antwerp. It would be their problem, in a 
sense.
    If we look across the 20 sites that we have proposed to do, 
there are 2,365 historic units that would be addressed in our 
inventory, 68 of which are general officer quarters. So if we 
do what we would like to do in total for the housing 
privatization, we will take care of large percentage of our 
historic housing using that method. And it is great, because it 
gives them a funding stream, and it allows them to take care of 
the historic properties.
    Mr. Hobson. Just one thing, I would like you to give me the 
amount of money--not now--but the amount of money projected to 
spend on those 68 general officers houses, and how much has 
been spent on them in the last five years, under the deal where 
you could play with the money each year, up to $25,000, and 
then other things you have spent on them. I would just like to 
get an idea of that. You don't have to do it now.
    Major General Van Antwerp. Understand, sir. That 68, those 
are in the sites that we are anticipating to privatize. 
Altogether, of the 330 general officer quarters we have in the 
Army, 168 of them are historic. So it is a large----
    Mr. Hobson. I would like to have that number on the 168. I 
don't care about the 68 under the privatization.
    Major General Van Antwerp. Right.
    Mr. Hobson. I do care about the others.
    Major General Van Antwerp. All right, sir.
    Mr. Hobson. Now are you finished?
    Major General Van Antwerp. I was just going to conclude and 
thank you for allowing us to be here today. Of course these 
historic properties are important to us, they are our heritage, 
we are trying to take care of them. And look forward to 
discussing them.
    [The prepared statement of General Robert L. Van Antwerp 
follows:]
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    Mr. Hobson. You might talk about, if you don't mind, just 
quickly about Fort Carson. You did save some barracks, wooden 
barracks, I think, at Fort Carson, didn't they, in the 
privatization plan they did. I don't think they are part of the 
privatization, but they are off there to one side.
    Major General Van Antwerp. Actually, we have an old 
hospital there. It had about 11 buildings, and we were able to 
save a building and put a plaque on it and say this is the 
historic building to be able to tear down the rest.
    We do find that the demolition of these buildings was very 
expensive per square foot, because they had asbestos and they 
had lead-based paint. We had to tent the facility and control 
the air.
    Mr. Hobson. Well, you got one base where they just don't do 
that. They just continue to use the facility, and everybody 
walks through and steps on the paint, and it gets on people's 
shoes and gets everywhere. And it is because they don't have 
the money to fix it like they are supposed to or tear it down, 
and they are still operating a machine shop in it. Because I 
have been in it.
    Admiral?

              Statement of Rear Admiral Michael R. Johnson

    Rear Admiral Johnson. Good morning, Mr. Chairman, members 
of the committee.
    I certainly appreciate the opportunity to speak with you 
today on the Navy's efforts to effectively balance our shore 
infrastructure recapitalization along with our obligations 
under the Historic Preservation Act.
    Real property maintenance is intertwined throughout all 
this, the General mentioned that, and I think everyone is 
pretty much in agreement with that.
    The Act itself requires us to inventory and maintain our 
properties and to think hard before we alter or destroy them. 
It does require us to consult with various parties on our 
treatment of historic properties, but it doesn't mandate 
preservation, and that is the balance that we have to keep as 
we work through that.
    Mr. Hobson. It does not?
    Rear Admiral Johnson. It does not. But it does dictate 
consultation and coordination as we work all that, and that is 
a lot of the 8,000 consultations the Army had, the 
consultations we have, and the other service. And in many cases 
we want to preserve, as part of our historic culture and part 
of our heritage.
    It is important to us, but we also recognize our 
responsibility to effectively manage both the current and the 
anticipated historic property inventory.
    Our current inventory has about 8,400 buildings and 
structures that are either listed or eligible for, and that 
includes about 408 listed and 255 eligible family housing 
units, which represents about 1 percent of our total Navy 
family housing inventory.
    Over the next five years, an additional 1,900 buildings 
will become 50 years old and cross the threshold for initial 
consideration. It doesn't automatically make them historic. We 
presume that, until we can get them off that list, so we don't 
run astray of any of the folks that we work with.
    Additionally, 6,000 family housing units are going to pass 
their 50th anniversary. A large percentage of those, probably 
in excess of 90 percent, are Capehart and Wherry, and we are 
very interested in what the Army and what our own programmatic 
agreements will allow us to do with those by just retaining a 
few.
    We are refining our programmatic tools for managing the 
properties, and a great tool that we are working on is the 
Integrated Cultural Resources Management Plan, the ICRMP. It 
allows a base to package----
    Mr. Hobson. Another acronym.
    Rear Admiral Johnson. We have acronyms growing.
    Mr. Hobson. There is a disk out that has a whole bunch of 
them.
    Rear Admiral Johnson. They can't keep it up to date, 
though.
    But these plans allow both our regions, which is kind of a 
new entity within the Navy, and the individual installations to 
better identify their current and their potential historic 
properties and develop treatment plans. That gets us out of the 
reactive and more into the proactive.
    The treatment protocol, the Categorization of Built 
Environment, there is a protocol that allows us to go through 
and evaluate those within the resources available. And it does 
provide us a sound, technically feasible and defensible basis 
to go into programmatic agreements with the different 
authorities.
    Programmatic Agreements allow us to streamline and tailor 
that consultation process. In fact, most of our expenses are in 
the consultation process. It is the programmatic 
administration, it is the consultation, it is the studies and 
that piece that has a lot of the cost. If you go back and just 
do a per-square-footage, those costs aren't that much different 
between historic and nonhistoric. The historic are much larger, 
therefore the total cost is much larger. But if you go back to 
just the per-square-foot, there is not that much difference.
    A great example was mentioned; that is the World War II 
temporary wood buildings. In November also, Secretary Pirie 
signed an agreement on family housing across the entire 50 
states, with the Association of State Historic Preservation 
Offices and the Federal Advisory Council. It allows us to deal 
with our family housing assets across the entire Navy in a 
consistent fashion, by categorizing them, different categories 
have different levels that we work with them on.
    The mid-Atlantic region, which is the Hampton Roads, that 
fleet concentration area predominantly, signed a programmatic 
agreement with the State Historic Preserve Office of Virginia a 
couple of years ago, and it looks at not only family housing, 
but it looks at all facilities in the entire Hampton Roads area 
and allows us to break them up in tiers. Different tiers have 
different treatment--significant historic, historic, not 
historic--and then we can go through without consultation and 
demolition always there.
    We are very interested in what the Air Force is doing, and 
the Army, on the Cold War resources, as well as the Army on the 
Capehart and Wherry, to match up with what we have in our 
programmatic agreement on how we deal with Capehart and Wherry.
    Our total inventory of Capehart and Wherry for the Navy is 
about 25,000 units. If you look at the----
    Mr. Hobson. Wow. You have more than he has.
    Rear Admiral Johnson. No.
    Mr. Hobson. How many do you have, 29?
    Rear Admiral Johnson. Total units, I think we are about the 
same, if you throw the Marines and the Navy together. There are 
some huge numbers when you look at that.
    We are also working to better understand the 
characteristics. Our inventory, frankly, needs a 
tremendousamount of work. GAO pointed that out.
    Here in the last week, we have just opened up a Web site 
for our Naval Facilities Asset Database where the individual 
installations will be maintaining an online system. And we have 
added initially about a half-dozen categories to collect 
historic and family quarters and flag quarters information on 
the basic inventory of what we have out there.
    The cost collection aspect is another challenge that we are 
also working on.
    Databases are going to be important, though. We have to 
know what is out there, and we really don't fully know what is 
out there. I talk family housing units, but many of our units 
are two, four, six in a structure. So it is who is doing the 
counting and how do they do the operational definitions.
    We very much want to get ahead of the process, however, 
triggering at 45 years reviews across the installation before 
they touch the 50 years. There are some out there that are much 
younger, but they have a historic nature, they are tied to an 
individual, that in their own right, even though they are not 
50 years old, might go onto that list. But the age factor, we 
want to catch that in advance.
    We are especially interested in exploring some of the 
innovative initiatives that have been talked about. Our toolkit 
right now, in the last three to five years, has been broadened 
immeasurably by measures that the Congress has done, by other 
things we have been able to do within our own rules, on 
leasing, on rentals and that sort of thing. We need to find the 
right set of tools and the right situation that we can apply to 
those areas.
    There are a couple of areas, and you touched on it, that if 
we could get a little more definition of gifts in our ability 
of dealing with historic property, that might smooth out that 
process, and I think we look forward to working with you on 
that.
    We do appreciate the encouragement of the committee in 
helping us refine the tools, and we look forward to your 
advice, your direction, your counsel as we try to integrate 
that into our military mission.
    But I want to stress that our Navy culture and its history 
is very important to us, and we want to keep that.
    A quick couple of notes. Abraham Lincoln frequently visited 
the Navy Yard during the Civil War to watch ordnance work and 
trials and to chat with the commandant, John Dahlgren.
    The building where I work was already standing there. It is 
part of a facility that by World War II employed 26,000 people 
building our big guns. Our historic preservation program has 
given us the tools to go back and essentially build a building 
within a building. That structure is now our offices, and it 
was done, I think, when you look at what happened, reasonably 
economically, when you look at the type of construction and 
that sort of thing, and you tie it into really building a 
building within a historic structure.
    Naval Sea Systems is just now moving into another large 
complex, but we have been able to build buildings within 
buildings and capture the historic nature, not tear down the 
outside structure, but in fact build a very efficient inside 
structure. We estimate utilities will be about $450,000 less 
per year in that because of the green design.
    These are really physical testaments to the history of the 
Nation, along with the Navy, and we need to preserve that, but 
we need to do it smartly.
    That concludes my statement, and I look forward to 
answering any questions the committee may have.
    [The prepared statement of Rear Admiral Michael R. Johnson 
follows:]
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    Mr. Hobson. General?

           Statement of Brigadier General Michael L. Lehnert

    Brigadier General Lehnert. Good morning, sir.
    Members of the committee, I appreciate this opportunity to 
appear before you today. And with your approval, I will submit 
my full statement for the record and give you a brief summary 
of the statement.
    We appreciate your interest and support in management of 
historic buildings by military services. And as the Marines are 
very tied to our history, these building provide an anchor to 
today's Marines by reminding us of the sacrifices and 
accomplishments of those that have gone before us. These 
historic structures are the touchstones that bind all Americans 
to a common heritage, and we are proud of our stewardship.
    But we will tell you honestly, sir, they do entail a 
significant management challenge.
    Our installations support about 4,000 buildings that are 
over 50 years old. Of these, we have 628 buildings that are 
currently eligible for listing, or are already listed, on the 
National History Register of Historic Places. This includes 175 
buildings containing 452 units of family housing and 17 general 
officers quarters.
    Our inventory of historic-eligible buildings has the 
potential to grow to over 8,400 buildings within the next 10 
years. This inventory includes about 4,000 family 
housingdwellings, and we are developing plans to demolish many of these 
buildings, in consultation with the various State Historical 
Preservation Offices. And our challenge is to balance the need to 
preserve these historical legacies against the dictates of sound 
business practices.
    And for example, sir, our goal in fiscal year 2000 was to 
demolish 2.1 million square feet of infrastructure. We actually 
demolished 2.24 million square feet of infrastructure.
    The high cost of maintaining historic structures can be 
attributed to three factors: deferment of preventive 
maintenance, unique architectural features, and the size, which 
you have already noted early.
    Maintenance items, such as roof replacement, that should be 
completed as preventive maintenance, are frequently deferred 
until system failure occurs, and clearly these funding 
decisions have some detrimental impacts on some of our most 
treasured buildings.
    Architectural features, such as copper downspouts and 
unique windows, significantly increase the cost of simple 
maintenance.
    The average size of a GOQ on the National Historic Register 
for us is about 7,200 square feet. By comparison, our 
nonhistoric general officer quarters average less than 2,900 
square feet.
    The others that have gone before me have talked about the 
Wherry and Capehart structures. Sir, we have those as well. We 
are also blessed with the largest group of Lustron homes left 
in America today.
    Those are in Quantico, Virginia.
    Mr. Hobson. Yes, those are historic.
    Brigadier General Lehnert. Sir, I----
    Mr. Hobson. I even remember those.
    Brigadier General Lehnert. With the chairman's permission, 
I will provide two photos of these homes. They are aluminum 
homes. They cannot be modified because of their structural 
integrity.
    Mr. Hobson. I remember those.
    Brigadier General Lehnert. We are working very closely with 
the Virginia SHPO. Our view is that we would like to demolish 
as many of those as we possibly can.
    Mr. Hobson. Yes, but you got to keep one. I mean, those go 
way back.
    Brigadier General Lehnert. Sir, understood. [Laughter.]
    Mr. Hobson. So maybe somebody from the SHPO will want to 
live in it.
    Brigadier General Lehnert. We are looking for options.
    Mr. Hobson. You know, you might have a new business 
opportunity. We might be able--maybe there is a Web site on 
this. Maybe we could sell these to people who want to have a 
historic property.
    Brigadier General Lehnert. Sir, the Marine Corps is always 
interested. [Laughter.]
    Sir, in 1994, we implemented a long-term plan to properly 
care for these facilities with limited disruption to the 
occupants and minimal financial impact on the remainder of the 
family housing program. And here I am speaking of the GOQs.
    We view their protection as a moral imperative since they 
are a legacy for all Americans. We are particularly grateful 
for the authority granted by you and this committee to use 
donated funds to help maintain our historic housing at Marines 
Barracks 8th & I and believe that this authority could be a 
model for preserving other historic quarters.
    In conclusion, Mr. Chairman, I would like to thank the 
committee for its interest and support in managing historic 
buildings. We take our stewardship very seriously and recognize 
our responsibility to the American people to maintain these 
national icons.
    [The prepared statement of Brigadier General Michael L. 
Lehnert follows:]
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    Mr. Hobson. Just make one comment, then I will go to 
General Robbins. And then I am going to come to Sam, because he 
has to leave after General Robbins. But I want to talk before 
you get out of here about 8th & I.
    Brigadier General Lehnert. Yes, sir.
    Mr. Hobson. Because I think that is something we need to 
do, but we have to figure out how to do it, so I want to talk 
about it.
    General Robbins?

            Statement of Major General Earnest O. Robbins II

    Major General Robbins. Sir, good morning. I also appreciate 
the opportunity to be here to discuss the Air Force experience 
with historic properties. I will make a few short comments, and 
I will submit my written statement for the record. With your 
permission, sir, I would like to modify the written statement 
that I have previously submitted, because we have gotten some 
more data since I gave it to you.
    I will remind you that our fiscal year 2002 budget is still 
in development, so that is part of the secretary's strategic 
review. And so, when that budget is complete, it will include 
funding to cover the department's most pressing needs. I ask 
you to consider my comments in that light.
    As the Air Force civil engineer, I am responsible for over 
1,300 properties listed on the National Register of Historic 
Places, and we estimate that we have about 3,000properties 
eligible for listing on the register. I want to point out that these 
properties are located all across the Air Force, but the magnitude of 
the issue varies wildly.
    In fact, approximately 60 percent of all the properties 
that we have listed are located on three Air Force 
installations. Those are Barksdale in Louisiana, F.E. Warren in 
Wyoming, and Randolph Air Force Base in San Antonio, Texas. 
Sixty percent of our non-military family housing listed 
properties are at those three bases. On the family housing 
side, 67 percent of all of our listed properties are at those 
same three installations.
    So while the issue of historic property management crosses 
the Air Force, it tends to be very localized in terms of 
magnitude. We used to have a historic property issue at 
Lackland, but we tore it down. [Laughter.]
    Our historic properties contribute to a deep sense of place 
and heritage to our Air Force people, as well as to the general 
public. However, the investments we make in our historic 
properties, their management, maintenance and repair, must be 
carefully weighed against the needs of over 111,000 total 
buildings in the Air Force inventory. We must ensure that our 
constrained maintenance and repair funds are used wisely and 
most effectively across our entire inventory.
    When we last addressed this issue before this committee in 
October of 1999, I stated that the costs for maintenance of our 
historic buildings were proportionate to the costs for the 
remainder of our inventory. When we looked at the difference in 
maintenance and repair costs between historic and non-historic 
buildings, we found the difference to be only about two-tenths 
of 1 percent.
    It should be noted, however, that there are additional 
requirements associated with the management of historic 
properties, such as inventory, historical evaluation and 
preparation of installation cultural resources management 
plans. And those have been addressed by other members of the 
team here.
    The Air Force does not allocate real property maintenance 
funds specifically for maintenance and repair of historic 
facilities. The current real property maintenance budget 
supports all facilities without regard for age or historical 
designation. We develop our budget for sustainment and life-
cycle repair for our total physical plant with no distinction 
between historic and non-historic buildings.
    Our experience relative to historic housing is similar to 
what we see for our non-housing facilities. One percent of our 
family housing inventory is on the National Register of 
Historic Places. Analysis of fiscal year 1995 to fiscal year 
1999 housing unit cost data indicated that we spend an average 
of 1.2 percent of the annual military family housing operations 
and maintenance budget on those historic units.
    We agree with the Army and Navy conclusion that the cost 
per square foot for operations and maintenance of historic 
units is the same or slightly less than for non-historic units. 
However, while the life-cycle cost to maintain those units is 
comparable, the cost to renovate and restore historic homes can 
indeed be higher. The majority of this increased cost is due to 
good-faith efforts to comply with historical property 
agreements and to maintain architectural compatibility.
    The Corps of Engineers' recent report on historical 
buildings hit the nail on the head, when it noted that 
insufficient funding to properly maintain all of our housing 
inventory, not just historical homes, has resulted in deferral 
of prudent work which, in turn, leads to greater future 
expense.
    In response to congressional concern, the Air Force's own 
Historic Facilities Integrated Process Team developed 
innovative initiatives and future plans that can help reduce 
costs and improve maintenance of historic properties. We intend 
to improve our historic preservation compliance procedures and 
strengthen our already strong partnership with the State 
Historic Preservation Offices.
    In summary, we do not believe the cost to maintain historic 
properties is disproportionate to that for comparable non-
historic facilities. Looking to the future, we are cooperating 
with OSD and the other services to ensure fiscally prudent and 
technically sound management of our historic properties and our 
entire physical plant.
    Mr. Chairman, that concludes my statement. I would be glad 
to take your questions.
    [The prepared statement of Major General Earnest O. Robbins 
II follows:] 
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    Mr. Hobson. Let me go to Sam, and then down to Virgil if he 
has something.
    I have one comment, so everybody hears it. Everybody now 
understands that it is illegal to take O&M money and rebuild 
these houses. Everybody understands that. There is no 
misunderstanding. Because we had some discussions about this, 
and there is a law now that says if you do that, somebody is in 
deep trouble with the law, not just the committee.
    Sam?
    Mr. Farr. Thank you, Mr. Chairman.
    I guess one of the surprises is how few properties are 
listed by each of the services. I would think that, frankly, we 
would have listed more. And I think what we have heard and are 
understanding is that we have a problem on our hands in that we 
want to maintain the historical significance of our culture, 
which is why people visit this country. It is not that people 
come here just to look at Americans. They come here to look at 
the land of America and the things that Americans have built. 
And I think the military is just as important to that history 
as anything else in our country.
    But perhaps we are going to have to start thinking outside 
the box of how we are going to treat these properties. It seems 
to me that the military has treated these properties 
essentially as just, you know, more buildings that we have to 
deal with, and they are old and they are falling apart andthey 
are expensive to retrofit, if you have to do exterior retrofitting.
    But I also think we overlook the significance of what the 
chairman has indicated. I feel like I am with my dad when I am 
with you, because my dad----
    [Laughter.]
    Mr. Hobson. You're not that much younger. [Laughter.]
    Mr. Farr. But you do, you both have something in common. He 
actually ended up chair of the Capital Historical Society. But 
when we go with this chairman, he will say, ``That is the kind 
of bed I slept in when I was in the military, this is the--'' 
You know, we all do.
    What we did at Fort Ord is that when the base closed, we 
turned it into a university, the idea is that it is a 
continuing training process. We trained soldiers, now we are 
training the other capacities.
    But we have kept the historical records of anyone who has 
ever served at Fort Ord. And it is on a computer and a private 
group of soldiers there have put it together. And so 
grandchildren, great-grandchildren can come and say, ``I think 
my father and my grandfather served here once.'' And then you 
look up the name and find the name and the years they served.
    Look at the significance of the Vietnam Wall. People really 
care about history and they care about their relationship to 
it. And that is why I think we need to think outside the box. 
And I would like to ask just a couple of questions.

                             Herrmann Hall

    I guess, Admiral Johnson, I would like to ask you first, 
because I brought up Herrmann Hall. Is Herrmann Hall listed in 
the Navy's Integrated Cultural Resources Management Plan?
    Rear Admiral Johnson. Sir, honestly I don't know. I will 
have to check for you. I would absolutely suspect it to be, but 
I can't say definitely.
    Mr. Farr. Under current statutory authorities, to what 
extent can gifts and donations be used to defray the costs 
associated with historic properties?
    Rear Admiral Johnson. I referred a little bit to the 
``others'' category when you look at gifts, and that is where 
the historic properties fall, which is what makes it somewhat 
problematic and very cumbersome. I have seen a couple of 
examples, and I think it was the Army that took a couple of 
years to get it through.
    Mr. Farr. Well, could we, this committee and the 
authorizing committee, work on fixing that law?
    Rear Admiral Johnson. That was one suggestion that----
    Mr. Farr. So you can work outside the box.
    Rear Admiral Johnson [continuing]. We be more definitive in 
defining historic properties as falling within the gift 
statute. Absolutely.
    Mr. Farr. But could you give us some language that you 
would support?
    Rear Admiral Johnson. We will work with the other services 
to try to provide that.
    Mr. Farr. Also, in your testimony, you indicated that 
properties covered by the ICRMP are classified by their 
relative historic significance and potential for future use, 
with the more significant adaptable buildings getting the most 
focused attention. How do you define the focused attention? For 
example, would Herrmann Hall be one of those that would get 
focused attention?
    Mr. Hobson. It may now, Sam. [Laughter.]
    Rear Admiral Johnson. I think we can definitely say it will 
get a little more attention right away. But ``focused 
attention'' talks about our investment of resources. Real 
property maintenance and lack of sufficient resources is what 
drives a lot of this. And it drives readiness prioritization on 
where you are going to spend that money.
    If you have an ability to perhaps adapt a facility through 
whatever resources--MILCON, real property maintenance, BRAC--
and you can move people in, fix up and reuse it for a longer 
term, that would get a higher priority than one that perhaps 
hasn't had the investment inside, doesn't have the overall 
ability on a broader basis to be reused.
    Now, we still have a requirement as best we can to preserve 
that envelope around that structure. But to go in and literally 
do major things inside for adaptive reuse, we don't have enough 
money to do all of them, so we look for the best and try to 
work through them.

                                Fort Ord

    Mr. Farr. Well, I would be interested in working with you, 
with all the services in trying to free up some flexibility, 
and hopefully because it is a historic property, to the 
installation commanders to work with the states and work with 
private sector and foundations and get some money to do this. 
You know, as tight as things are here, I don't think we are 
going to have a big pocket of federal money coming out for 
preservation effort in military properties. But I think that 
there is a need there to preserve it.
    Let me ask the Army, Major General, you said there is 
12,000 listed properties. Are any of those at Fort Ord or at 
the Presidio in Monterey?
    Major General Van Antwerp. At the Presidio of Monterey. 
Fort Ord, we don't track anymore because we have closed that 
under the Base Realignment and Closure.
    Mr. Farr. So it's still under your--you own it? Has it all 
been transferred yet?
    Major General Van Antwerp. There is a small number. I will 
get you the specifics on that.
    Mr. Hobson. The one thing we would like to see--I want to 
digress here for a minute, Sam, because I am going to pitch for 
you on something. I still think it is outrageous that we have--
--
    Mr. Farr. I am getting into that.
    Mr. Hobson. Well, let me do it too. [Laughter.]
    That we have all these houses at Fort Ord that are still 
sitting there, when there are people out there looking for 
housing. And we have all those houses sitting there, and 
nothing was being done with them. They weren't even being 
preserved or anything. I don't know how many----
    Mr. Farr. Those aren't even historic. Those are 1980----
    Mr. Hobson. Well, by the time we get to them, they are 
going to be historic.
    Mr. Farr. Oh, that is right.
    Mr. Hobson. That is what worries me.
    Mr. Farr. There are over 2,000 there and there are people 
living in cars--mothers with children living outsidethe gates 
at Fort Ord, parking at night and looking at these houses that were 
built, you know, 15, 20 years ago but can't get in because of all kinds 
of problems.
    But is there also at Fort Ord, any concept of stockpiling 
the material, the wood, and things that are reusable?
    You have at Fort Ord, 1,100 B-52 buildings. These were 
buildings that housed 52 men. They were built, they were 
essentially modular in those days. They were brought in on rail 
cars. And I understood it took them about a week, I don't know 
how many dozens of people, some of them. But that is all they 
did. They did one a week, and for years.
    The wood is virgin fir. The Packard Foundation has done a 
study on what every ingredient of those buildings contains and 
how recyclable it is. We are offering the buildings to people 
free, just come pick one up. I mean, they are big, so it is not 
easy to pick one up. You need a rail car.
    But nobody seems to have any idea of what to do with these 
buildings. I would imagine if this is Fort Ord, you have 
properties all over the United States that have buildings like 
that. Is there a way we could just, when you are abandoning the 
base, is there any way to just pick up stuff that is not going 
to be reused and tear it down and use the wood?
    Well, I think if you do it in big enough style, you have a 
market there. We are looking at all different kinds of ways. I 
am trying to get the National Guard to take some of the 
buildings if they are interested, but they are only interested 
in about 12 of them. We have still got 1,100 more to go.
    So my question is, is there any thinking, again, outside 
the box--the Navy has been able to mothball your boats, your 
ships. I have seen them, you know, up in Northern California, 
in San Francisco Bay, there is a whole mothball fleet. But we 
don't have a place to mothball buildings or building materials.
    Mr. Hobson. Is there BRAC money for that?
    Major General Van Antwerp. Basically, it is transferred 
where it is, as is. So the buildings are there. We have to make 
sure they are environmentally, you know, acceptable and that 
they are sound and not a safety hazard. And then we transfer 
them. But we don't have BRAC money for that unless it falls in 
the environmental arena. We do not collect building materials 
and stockpile it for future construction. When we transfer a 
base, it goes where it is, as is, unless there is some issue 
with it.
    Mr. Farr. Well, then the last question then, and that is 
all I have, Mr. Chairman. I appreciate your allowing me to go, 
because I do have a commitment.
    Following up on the chairman's request, could I get a 
housing market analysis for the defense installations within 
one-hour commuting time of Fort Ord, I mean the housing within 
one-hour commute?
    What I think you are going to find is that the best housing 
for the military, both the Navy and the Army, is existing 
information, so I am not asking you to do something else, but I 
would just like to know what that analysis is, within an hour 
commuting time of Fort Ord.
    Because I think we will find that it is best to fix up the 
housing that the chairman's talking about and allow soldiers 
and their families to live in it. We are doing some of that, 
but we need to do more.
    But I would just leave you, I think it is important--I 
mean, we are here on this committee to try to make things work 
and to fix things that are broken. My short term on this 
subcommittee, what I find is broken is not the command and not 
this committee, but it is the stuff that is in between. It is 
the law that prohibits you from being creative. And what we can 
do is change that law.
    And what we would like to know, I think, as a committee, is 
what are those burdens that are upon you that don't allow the 
sort of thinking outside the box to solve a problem when you 
think it is solvable and to get us recommendations for changing 
that language. That would be very helpful to me, and I think 
for the rest of us.
    Thank you, Mr. Chairman.
    Mr. Hobson. Virgil?

                     AUCTIONING HISTORIC PROPERTIES

    Mr. Goode. Mr. Chairman, I really only had one question, 
but after listening to Mr. Farr, I have one for all of you. 
What law prevents you from having an ``as is'' auction, public 
auction at Fort Ord, for the houses like that, where there 
seems to be a huge demand? And I know in other places. Just 
auction them. The developers will come in there and buy.
    Mr. Farr. We don't need to auction. We are giving them 
away.
    Mr. Goode. I know, but why not give them some money, and 
the money goes back to the services.
    Major General Van Antwerp. Well, it really falls under the 
Base Realignment and Closure Act, and what happens is there is 
a pecking order of where those buildings go, and it goes to a 
local reuse authority. Ultimately, if we can't dispose of it 
that way, we go to GSA and they dispose of the property, either 
lease it, sell it----
    Mr. Goode. We had a building in Charlottesville like that, 
and had to get a little amendment in the final bill to take 
care of that.
    Major General Van Antwerp. And to a large extent----
    Mr. Goode. That is a nightmare.
    Major General Van Antwerp. To a large extent, under the 
base realignment and closure process, a lot of that is done 
under a no-cost conveyance. We don't get any revenue from the--
--
    Mr. Hobson. Let me just interject here, Virgil. If they 
start to do things the way we are going to do them down at 
Brooks, you may avoid much of that. Brooks is, I hope, is a way 
everybody looks at realignment and other things later on, 
because Brooks is going to be somewhat privatized and still 
keep some of the military, and still allow--and it is going to 
be, I hope, very innovative. I hope Brooks works, first of all, 
because it is the first time we have done it, and the general 
does too.
    But it is the first time we may be able to avoid some of 
the problems that we have experienced with these huge transfers 
and huge shutdowns of bases, we may be able to do some things 
in anticipation of things that helps the community, rather than 
hurting, in the community's eyes, rather than hurting them with 
a shutdown, because they will redevelop and they may be able to 
transfer things in a better way.
    And I am hoping that someplace along the line, people 
begin--I think there will be another base realignment thing at 
some point, hopefully long enough away that I won't have to 
deal with it, but I think it is going to be here.
    But it may be a better way of looking at how we do bases in 
the future, all bases. It may not be the exact model, but it is 
a beginning.
    Sorry, Virgil.
    Mr. Goode. I think in some situations if you can get away 
from the GSA process and the BRAC process and have an auction, 
you could get more money for you, but it would have to be--
well, like at Fort Ord. Apparently, that is where they want it 
and where the public would want it. But I know the local 
governments would get all bent out of shape in some instances.
    Mr. Farr. Fort Ord was BRAC'ed. It is closed. And the land 
transfer is free to the local governments, the local 
redeveloping authority. The problem you have with base closures 
is that the first people who can occupy the land are usually 
public entities, housing for low-income people. But there is no 
tax base, because they are still in government and nonprofit 
ownership.
    So there is no property taxes paid. So there is essentially 
no revenue for this base, now, that local governments have 
taken over. They have a huge liability. The military retains 
the liability to clean up, that is their responsibility. They 
can't get away from that. That is strict liability.
    But then the reuse issues all end up on what are you going 
to do with these things, like houses that are not on the 
inventory, that nobody really wants for practical purposes. I 
would love to, frankly, keep all these incredible buildings, 
you know, they are beautiful things in my eyes. But I can't get 
the local community to appreciate that.
    Mr. Goode. Yes, but it is a huge hoop, like the McKinney 
Act. We have to go through that. We have to give the homeless 
one shot at it before you--if you could offer $400,000, and 
they might be better off getting $100,000, the military was, 
and have $100,000 left over in another part of the budget for 
the homeless, rather than going through the McKinney Act.

                    HISTORIC PROPERTIES IN VIRGINIA

    But one of the questions I really had, how many historical 
homes and structures are in the State of Virginia from each 
branch, if you all have a good estimate?
    Major General Van Antwerp. I don't think we have those 
exact numbers.
    Mr. Goode. You said 12,000 total in the country.
    Major General Van Antwerp. There are 12,000 total----
    Mr. Goode. Five hundred in Virginia?
    Major General Van Antwerp. We have all together--are you 
talking homes or buildings?
    Mr. Goode. Homes or buildings.
    Mr. Hobson. We can find that out----
    Major General Van Antwerp. We will find that out. We have a 
whole installation at Fort Monroe, for instance, and the whole 
installation is historic.
    Rear Admiral Johnson. Then Hampton Roads for the naval 
complex. You get into the shipyard; you get into the hospital; 
you get into the naval station. There is a long list in the 
Hampton Roads area. But numbers, we can provide that to you 
from the state itself.
    Brigadier General Lehnert. Sir, for the Marine Corps, there 
are 239 structures that are either on or eligible for the 
National Register. Of those, 75 are non-housing, 164 are 
housing structures. Some of them are multi-family dwellings. It 
works out to 239 housing units.
    Mr. Goode. You have some down here at Quantico.
    Brigadier General Lehnert. Those are specifically the ones 
we were talking about, sir.
    Major General Robbins. Air Force at Langley, Langley had 
121 that are not family housing units, and we have 233 family 
housing units that are all eligible, but none of them are 
listed, but they are eligible for listing.
    Mr. Goode. Thank you, Mr. Chairman.

                       8TH AND I MARINE BARRACKS

    Mr. Hobson. I want to talk a little bit about 8th & I. I 
think 8th & I is a very historic area, the Marine Corps in this 
country. You know, the house, apparently Thomas Jefferson rode 
out on a horse to survey the site, at least that is how the 
story goes.
    But you know, you have the commandant's house and you have 
these barracks, and then you have the parade area there. And it 
is a big expense and it is difficult to justify that expense 
when you talk about all these other areas here.
    And what I would like to see the Marine Corps do is, in 
that particular facility, we ought to find a way, because there 
are many, many marines--not on active duty there, but I know, 
once a marine, always a marine--who feel very strongly about 
that and who are willing, and already willing to become a part 
of fixing that facility the way it should be. And there are 
things that the Marine Corps would want to do beyond what we 
can do here.
    So I think our challenge is to find a way to take this very 
historic property and do it in a quality way, rather than just 
piecemeal it over a period of time. To do a substantial 
funding. You know, I am talking millions of dollars here. But 
it is going to take millions of dollars over what we all may be 
able to eke out here to do that.
    But all you have to do is go down there to that parade 
ground once to realize what a historic facility this is to this 
country. And I think it is not one that is so large that we 
can't find a way, through a public-private partnership, to 
preserve this for the future.
    Now, I wish the stock market were doing a little better 
when we are talking about this, but when I see some of these 
huge gifts that some of these universities are getting, this is 
one that I really think could be very tastefully done and 
preserved for the future.
    So I would just like to suggest to you that I hope we can 
work together to find a way, because if it gets done otherwise, 
it is probably going to be piecemeal over a period of time. And 
I don't want to see that happen, because we will do it in bits 
and pieces and it won't get done, I don't think, to the degree 
that it should be done.
    So I just want to say to you that I am very committed to 
that, I am very committed to that particular piece of property, 
and seeing it preserved. And I just wanted to publicly state 
that to you, sir, while you are here. And I think the committee 
will do everything we can. And I think we would like to talk to 
the authorizers also about it. I am very pleased that the 
chairman of the authorizing subcommittee on this is a real 
estate guy--my background--it is going to drive you nuts, too--
now you have two of us.
    And I have not talked to them about this, but I am hoping 
that we could get their concurrence in some program to preserve 
that property.
    Brigadier General Lehnert. Well, sir, as you know, and I 
appreciate you saying that because, you know, as you know,8th & 
I is particularly the Commandant's home. And I don't know if it is 
older than the Presidio or not, but it was built in 1806. It was one of 
the few structures that was not burned by the British in the War of 
1812. And it is been continuously occupied since 1806.
    About 1900, they made the decision to raze the rest of the 
structures because they were in pretty bad shape. And the 
commandant's home was renovated then, and obviously it needs it 
again.
    Through your committee and help from Congress, we did get 
language--and this is one of the things that was talked about 
here--we got language last year in order to raise some funds, 
and a foundation was formed, called the Friends of the Home of 
the Commandants. And I will report to the committee today that 
they have raised up to this point, sir, $341,000. So there has 
been some specific language----
    Mr. Hobson. Yes, and I am not sure that language is totally 
correct. We are experimenting with this, but it is a beginning.
    Brigadier General Lehnert. Yes, sir, it is.
    Mr. Farr. But could we broaden it a little?
    Mr. Hobson. Oh, yes. I am hoping that there is general 
consensus about finding innovative ways to do this in all the 
services. You know, we have talked to the Army about this. We 
have had a little discussion about West Point and some things 
there, not just that house, but other things, and went out and 
viewed some facilities at Bolling this week to see those.
    We have some real challenges here. I think the National 
Historic Trust is something--when I talked to Mr. Apgar some 
time ago about this sort of thing, he was very interested in 
some relationships he had with the National Historic Trust, 
which we never really got formalized or never got to work with. 
But I think that presents an opportunity, at least for 
discussion, to find out if they could be a player in this in a 
broader sense than just one or two facilities. But it might be 
a start in your facility, if we could interest them, because 
obviously whatever they are doing has great historic 
significance in that particular property.
    I am always worried when I go there that one of those kids 
is going to drop that weapon and I'll never be seen again 
anywhere.
    But I think it is also very interesting--I am going to say 
this publicly--Senator Robb was--I didn't realize this until I 
was there--but he was at one time the commander of those 
troops, which I thought was kind of a really neat thing.
    David, do you have any? You just arrived.
    Mr. Vitter. Not at this time, Mr. Chairman.
    Mr. Hobson. Chet, do you have any?
    Mr. Edwards. I have no questions, Mr. Chairman.
    Mr. Hobson. Okay. Good, I get to ask some more, then. I was 
going to let everybody else do it.

                       INTER-SERVICE COOPERATION

    One of the things that has always troubled me in the 
services is in the housing sometimes is that people haven't 
talked across services enough. Even in the remodeling of 
housing in Europe, I found out that people were not--Army 
wasn't talking to Air Force; Air Force wasn't talking to them; 
Navy, you know--everybody was off doing their own thing.
    Are you beginning to talk to each other, or have you been 
talking before you heard about this hearing, about historic 
housing? I know somewhat you are about privatization now, but--
--
    Major General Robbins. The answer is, yes, sir, we have. 
Typically, it is occurring in the secretariats, as opposed, on 
the uniformed side, because the secretariats are the ones that 
have been focused on trying to work with the Office of the 
Secretary of Defense (OSD) to come up with some collective 
approach--take the best ideas of all the services, and then it 
comes to us on the uniformed side to execute.
    On the local level, the picture is not quite as grim as it 
might have been in terms of cross-agency, inter-service 
cooperation in dealing with State Historic Preservation Offices 
(SHPOs), in particular. And I think General Van Antwerp, maybe 
in his statement, mentioned the fact that we tend to work 
closely together with the SHPOs to get some consistency in how 
they apply their criteria.
    Mr. Hobson. Sam? I already did.
    Mr. Farr. Thank you very much.
    Mr. Hobson. My purpose in doing this today is we have 
written letters and we are trying to get this thing looked at. 
And I am hoping to focus on it, because I am, first of all, I 
am very concerned about the amount of monies we are putting 
into general officers housing in some of these historic places.
    Now, I know we have to do it in some places, but it is 
extremely difficult for me when--you will excuse me for doing 
this, sir--but when the Army asks for no CONUS housing in 
MILCON, then look at a list that has $1.5 million, $500,000 or 
more for general officers housing in historic properties. And 
it is true in all the services. I just happen to recall that 
one.
    I can pick them out, all of them, so if I am picking on 
one, I have stories on all of it. And it is not really to pick 
on you, it is just the priorities bother me.
    Now, the Navy is actually going to build some new, since we 
changed the law, I think, some new general officer housing. And 
it is interesting what the cost of that is going to be, because 
if you look at the cost of that housing, that housing--and I 
wish Sam were here to hear this--but that housing is going to 
be, in many cases--in some cases--less than the deferred 
maintenance on some of the older houses, to build a brand-new 
house.
    Now, admittedly, we have the ground utilities there that we 
are going to do. But we are going to have a new, functional 
house that that family can live in, and we are going to have 
it, I mean, eternity, I guess, or something.
    And I come back to the fact that before we change the law, 
we have a house in Osan, Korea, that is an old zipper house, 
which is where you take two prefabs and put them together and 
you zipper them together and you get a house. And a house was 
like, what, 3,500 feet or something like that. And the request 
was to put, I don't know, $200,000, $250,000 in it. I asked 
them what the house was worth, and that is all the house was 
worth. And we were going to put that in repairs and 
maintenance.
    And we have still got a dumb old house when we get done 
that sits up on a hill; apparently, we are going to see it. And 
it looks nice. It's there; how nice it looks. But we have still 
an old place.
    And the reason we didn't go back, and one of the reasons 
that we never looked at building a new one there is, number 
one, you didn't think we would approve it; and number two, you 
could only build 2,100 feet, and the guy didn't want it. Why 
would the guy want to give up, you know, that kind ofhouse? So 
we have changed that. And I am suggesting to you, test us on some of 
these. And I am hoping that you are all looking a little bit at that.
    Now, I don't want to go out and build a whole bunch of 
general officers houses and not build for the troops, because 
my priority is the troops. But I want to stop taking $1.5 
million and putting it in a great big old house that is still 
going to need money the next year and the next year and the 
next year, and build, you know, a couple or three houses.
    So that is kind of the approach that I am taking.
    David?

                          HISTORIC TAX CREDITS

    Mr. Vitter. Thank you, Mr. Chairman.
    I apologize for being late to this. I was delayed at 
something. And I also apologize if I am going over any old 
ground. I think I am probably not, because this may be a wild-
eyed idea, but I am trying to think of any innovative ways to 
stretch dollars and do more with whatever resources we have.
    It strikes me that we have some public-private ventures 
going on in military housing, some of which is being fine-tuned 
and being proved to be workable. At the same time, on the 
private side, for a while we have had historic tax credits for 
renovation of private rental units. And a lot of us, including 
me, put that in the tax bill last year to expand that to the 
ownership side, and that passed overwhelmingly, although the 
general bill was vetoed.
    Is there any way to marry those two things to use historic 
tax credits to give private developers a significant impetus 
and cost saving to renovate some of this housing?
    Mr. Hobson. I am glad you brought that up. We have talked 
about that before. Not here, but I have mentioned it to these 
people before. Do you want to respond to that anybody?
    Major General Robbins. You have discussed it with me, 
obviously. And that would seem to be one of the incentives it 
might take to build some support in the private sector to join 
with us. Because right now, quite frankly, other then appealing 
to patriotism and the spirit of the corps, there's very little 
incentive.
    Mr. Hobson. Here is his proposal, I think, at least it was 
what I was thinking about, and I am glad to find somebody else 
to be talking this way.
    The deal would be to do it like you do in the privatization 
side. Let the private sector take over the house and rehab it, 
find an investor who is looking for the tax credit, and we 
would lease it back. And after the period of time, then the 
residual would come back to the military. And you would have, 
basically, at that point, a better facility than you started 
out with.
    Mr. Vitter. Right. I can tell you, I come from New Orleans 
where there is an enormous amount of old housing stock in the 
private community. And that tax credit has been extremely 
effective in renovating a lot of that historic stock. And 
again, I would like to create a credit on the ownership side, 
because that would exponentially increase the impact.
    Mr. Hobson. And it doesn't have to stop with housing. It 
used to be, I don't know whether it still is, for office 
buildings, too, or warehouses. You can give the tax credits to 
an entrepreneur and then lease the facility back. Or you don't 
even have to lease it back, in many cases.
    Rear Admiral Johnson. We are looking at some of those, and 
I think there are opportunities. I know some states for some of 
our PPV, to kind of pile on, there is affordable housing 
credits within the state itself that gives you different loan 
breaks when you are going in and doing that. So we try to use 
those.
    There are a number of opportunities out there, just trying 
some of them and seeing if maybe we need a tweak in legislation 
or something like that to make them more viable.
    Mr. Hobson. You need to look at that. But the only thing I 
would ask you is, don't go out and do 5,000 units in the first 
one. Let's try some things before, you know, we get down the 
road too far. You know, the Navy had that problem and the Army 
has got that problem.
    Rear Admiral Johnson. Well, we appreciate your support in 
using the Virginia Housing Development Authority. We are only 
doing 80 units. If it proves out, we have road-tested the 
concept, and now we can get on a bigger scale.
    Mr. Hobson. John?

                        REAL PROPERTY INVENTORY

    Mr. Olver. Thank you. I know we have little time with the 
rollcall that has now been called.
    And my apologies because I did say this was important, it 
was important, and I missed, but we have records of what has 
been said here. But my other subcommittee was meeting at 
exactly the same time on airport delays, so I felt it was 
important to be there.
    Mr. Hinton from the GAO, I want to return to his comments. 
The crux of his comments, it seems to me, is that we don't have 
an inventory. We don't have a common inventory, a comprehensive 
inventory on which to work. And I wonder if this hearing might 
trigger the development somewhere within the Department of 
Defense of a common protocol, a common inventory, a mechanism 
whereby--the other thing that he said, was that the decisions 
are made at the installation level. That troubles me a great 
deal.
    I mean, the development of the inventory should be done at 
the installation level first, on the basis of common criteria, 
a common protocol for what is the information that ought to be 
in there to make some decisions as to what really ought to be 
protected and preserved and what does not need protection and 
preservation.
    Obviously, the criteria of what is of historical 
significance, what people of historical importance were 
involved at that place, and the architecture are parts of what 
should be in that protocol, that common protocol for 
decisionmaking.
    That business, it seems to me, of getting a common 
inventory, that is developed with exactly the same criteria 
being used, that goes up through this whole agency, the whole 
Department of Defense, is important.
    Would you like to comment on that? And are we moving in any 
direction along those lines?
    Major General Van Antwerp. I would comment on behalf of the 
Army. We are moving in that direction. We have an integrated 
facility system right now for all real property, and we are 
making sure that we have the right data fields for our historic 
properties that alert us when they are 45 years old, and not 
wait until they get up close to 50. It has the criteria for 
eligibility, or for listing, or for whether it is just an older 
building. So we are moving definitely in that direction, to get 
that inventory.
    And we also have the protocols down to the installations. 
And we have cultural people, as was discussed, at almostevery 
one of our installations that work those resources and have a common 
understanding of what is the criteria for historical buildings.
    Rear Admiral Johnson. I think there is more commonality out 
there than you are led to believe. Because as we do the 
Integrated Cultural Resources Management Plans, there is a DOD 
architecture that drives that. As we look at the Categorization 
of the Built Environment, which is a protocol to evaluate 
things, all the services are using the same protocol.
    These are specialists that go to a small group of colleges 
that are our cultural, historical preservation people. And they 
end up at the installation, they end up perhaps at the region 
or the major command or something like that. There are a lot of 
networks that give more commonality than you would think. It is 
not exact.
    I also think that, as you look at the law, part of the 
context of the law is local, historical, state and national. 
And there are things that are local that are special people, 
special events, that sort of thing. But there is more 
coordination there within the service, and I think across the 
services, than you might imagine when you look at that very 
small cadre of experts that work with states, work with the 
colleges, to do all of that.
    Mr. Olver. So are we going to be able to see, maybe a year 
from now--I have used the term ``a spreadsheet,'' which might 
be a large one, if there are 40,000 properties coming onto the 
50-year level at some point here, among the services. We would 
be able to see something that summarizes all of that data?
    I don't know whether there is any real disagreement. Mr. 
Hinton isn't here to comment on it any further. But you think 
there is more commonality and more of a comprehensive database 
than he seems to think.
    Rear Admiral Johnson. Database, I will back off of. There 
is much more commonality in what we are doing, I think. 
Speaking for the Navy, we have a long ways to go on our 
database to add those fields, to be able to pull out the 
historic aspects of our overall database. I am not very proud 
of our facilities database in general, and that is why we have 
gone up onto the Web and the individual activities are going to 
take over the responsibility of keeping it current.
    Mr. Olver. If it isn't a comprehensive database, then the 
commonality of what the four of you are doing is not accurate 
enough for us to make decisions on, I would think.
    Brigadier General Lehnert. Sir, I would like to respond 
back to one of your implied concerns in reference to how we 
look at the historical facilities, on-board installation, and 
what type of consultation process and decisionmaking process 
occurs. Because I think implied in there is the responsibility 
that we have to get it right; in other words, to make sure that 
we are preserving those structures that have truly historical 
significance, and making the right, good business decisions to 
get rid of those that don't.
    And I can only speak from my brief experience in the job, 
but I have watched it happen. And what basically takes place is 
that there is a decision point whether or not that facility has 
historical significance. If both a SHPO and the base say, ``no 
historical significance,'' it doesn't get elevated. In either 
case, if there is disagreement, it does get elevated to the 
service level, and we take a hard look at it at that point.
    So there is that overlook.
    Mr. Hobson. We have only got seven minutes left, and I want 
to make one apology. You are a brigadier general-select, not 
just a colonel now.
    On that note, we will adjourn.

                          Inventory Management

    Question. As result of their recent review of historic properties 
within the Department of Defense, GAO concluded that the military 
services do not have an accurate inventory of historic properties. Does 
each Service concur with this conclusion, and if so, what efforts are 
being undertaken to address this issue?
    Answer. The Army concurs and is working to correct this deficiency. 
The Army's primary database for all facilities, including historic 
properties, is Headquarters Integrated Facilities System (HQIFS). 
Currently HQIFS includes one element to identify if a facility is 
``historic''. Once identified as ``historic'' in HQIFS this element 
does not differentiate between properties that are listed on the 
National Register of Historic Places and those eligible for listing. 
Additionally, the HQIFS user has not typically coordinated with the 
installation's cultural resources office and has tended to under report 
properties considered as historic. The Army is in the process of 
updating the HQIFS database to include a cultural resources screen to 
prompt users to consult the installation's cultural resource managers 
and identify the specific historic status of a facility when it reaches 
45 years old. The Army expects to complete these updates in October/
November of 2001 and to see the first results in the September, 2002, 
HQIFS Army-wide update.
    Question. As a result of their recent review of historic properties 
within the Department of Defense, GAO concluded that the military 
services do not have an accurate inventory of historic properties. Does 
each Service concur with this conclusion, and if so, what efforts are 
being undertaken to address this issue?
    Answer. The Air Force agrees with the GAO report's observation that 
we have not maintained an accurate, comprehensive inventory of historic 
properties. As an initial response to the GAO report, we accomplished a 
data call to the Air Force major commands to provide a full accounting 
of the number of historic properties both listed and eligible for the 
National Register of Historic Places. As a result, we now have much 
more complete and updated data on our historic properties. For the 
present, the only means to update such information is by data call to 
the major commands. For the future, our Automated Civil Engineer System 
Real Property (ACES-RP) module will collect and intergrate historic 
properties data, which will be accessible to installations, major 
commands and the headquarters staff, so that we may all view and update 
the same information in a comprehensive database. This same software 
will enable us to link to real property records and maintenance data so 
that we may cross-reference that data for historic properties.
    As a result of their recent review of historic properties within 
the Department of Defense, GAO concluded that the military services do 
not have an accurate inventory of historic properties.
    Question. Does each Service concur with this conclusion, and if so, 
what efforts are being undertaken to address this issue?
    Answer. The Marine Corps primarily relies on internal annual 
reporting requirements of historic properties to accurately manage its 
inventory. The GAO noted that the Marine Corps data contained 8 
discrepancies in the 639 records reviewed. This is .1 percent of our 
data. However, in response to the GAO report the installations are 
currently updating their property records to correctly reflect our 
historical facilities. Likewise, the Department of Navy (DON) is in the 
process of refining data fields for tracking National Register-eligible 
properties in the Internet Navy Facility Assets Data Store (INFADS), 
formerly NFADB.
    As a result of their recent review of historic properties within 
the Department of Defense, the General Accounting Office concluded that 
the military services do not have an accurate inventory of historic 
properties.
    Question. Does each Service concur with this conclusion, and if so, 
what efforts are being undertaken to address this issue?
    Answer. We concur that the Internet Navy Facilities Asset Data 
Store (INFADS) (formerly the Naval Facilities Asset Database (NAFDB)) 
does not accurately reflect the Navy's historic property inventory. 
Installations have historically performed National Historic 
Preservation Act (NHPA) Section 106 consultations well, including the 
associated property identification. Unfortunately, the knowledge gained 
during this project-related compliance was often not then captured in 
the central real property database. Local cultural resources program 
records therefore do not agree with INFADS.
    We are developing data elements for INFADS that will allow it to 
identify properties by National Register category and status, heritage 
asset category, and date of designation. We are also developing a plant 
to populate these date elements once they are in place. We do not need 
to conduct fresh evaluations to do this, merely locate and record 
existing eligibility determinations. This will be a challenge, since we 
are dealing with nearly four decades of records since NHPA was passed. 
However, we anticipate that the requirements to prepare historic 
building inventories and Integrated Cultural Resource Management Plans 
have prepared installations to help with this.

                           Enforcement Tools

    Question. What are the penalties if a Service does not do what a 
State Historic Preservation Officer requests?
    Answer. Under the provisions of the National Historic Preservation 
Act and its implementing regulation 36 CFR 800, there are no penalties 
associated with the failure of the Army to do what a State Historic 
Preservation Officer requests. However, disagreements with the SHPO 
over determinations of eligibility or resolution of adverse effects 
must be resolved through specific steps outlined in the regulation, 
possibly resulting in project delays.
    Question. What are the penalties if a Service does not do what a 
State Historic Preservation Officer requests?
    Answer. The National Historic Preservation Act (NHPA) has no 
statutory fines or penalties for non-compliance with State Historic 
Preservation Officer (SHPO) requests. However, the statute has citizen 
suit provisions that allow private citizens and environmental groups to 
sue the Air Force for failure to comply with any provision of NHPA. 
Such citizen suit provisions allow for injunctions that may interfere 
with Air Force missions. The NHPA does allow the Air Force to contest 
SHPO requests through the Advisory Council for Historic Preservation 
and the Secretary of the Interior. This dispute process has 
administrative costs for which the Air Force would be liable.
    Question. What are the penalties if a Service does not do what a 
State Historic Preservation Officer requests?
    Answer. Under the National Historic Preservation Act (NHPA) there 
is no statutory fine or penalty for non-compliance with State Historic 
Preservation Officer (SHPO) recommendations. Federal agencies are 
merely required to consult and take into consideration the comments of 
SHPOs and the President's Advisory Council on Historic Preservation 
(ACHP) when proposing an action affecting a historic property. However, 
failure to implement the recommendations of the SHPO and ACHP could 
result in litigation against a Federal agency by private parties.
    Question. What are the penalties if a Service does not do what a 
State Historic Preservation Officer (SHPO) requests?
    Answer. Under the National Historic Preservation Act (NHPA) there 
is no statutory fine or criminal penalty for non-compliance with SHPO 
recommendations. Federal agencies are merely required to consult in 
good faith and take into consideration the comments of State Historic 
Preservation Officers (SHPO), the Presidents Advisory Council on 
Historic Preservation and interested parties when proposing an action 
affecting a historic property. Federal agencies may be enjoined if they 
fail to comply with NHPA.
    Question. What are the penalties for noncompliance with the 
National Historic Preservation Act? If the Department is not required 
to comply with the Act, under which circumstances would the Department 
choose to comply with the Act?
    Answer. The Department of Defense, like all other federal agencies, 
is required to comply with the National Historic Preservation Act 
(NHPA). The National Historic Preservation Act establishes a 
requirement for federal agencies to consult with State Historic 
Preservation Officers, the interested public, tribal organizations, 
and, in certain situations, the President's Advisory Council on 
Historic Preservation, on all proposed actions impacting historic 
properties. The implementing regulations to NHPA Section 106, 36 CFR 
Sec. 800, Protection of Historic Properties, establish the process to 
meet this consultation requirement. Foreclosure of the Advisory Council 
on Historic Preservation's opportunity to comment on the proposed 
agency action results in written comment by the Chairman of the Council 
to the Agency head and a prescribed waiting period prior to any action. 
Failure to follow the consultation process also opens the agency to 
litigation by interested members of the public and preservation 
advocacy groups. There are, however, no specific legal penalties for 
failure to comply with the National Historic Preservation Act.

                           Demolition Efforts

    Question. It is the opinion of some that the majority of structures 
eligible for the historic register are simply old, with no historical 
significance. What actions are required if you believe demolishing an 
historic or eligible property is the best solution?
    Answer. Generally, with an adverse action, such as demolition, we 
consult with the State Historic Preservation Officer and advise the 
Advisory Council on Historic Preservation. First, if the building is 
clearly not historic, then there is no potential for an adverse impact 
on historic property, and the National Historic Preservation Act does 
not apply. When historic properties are at issue, the NHPA requires the 
Army to consult with the State Historic Preservation Officer, to 
involve the public, and to consult with appropriate tribes and Native 
Hawaiian organizations on its plan to demolish a property. The Army 
must also notify the Advisory Council on Historic Preservation of an 
adverse effect finding, and may invite the Council to participate in 
consultation. The Army must provide the Council with extensive 
documentation in accordance with 36 CFR 800.11. If the Army is unable 
to reach consensus with the State Historic Preservation Officer or 
other consulting parties regarding the mitigation for demolishing the 
property in question, consultation may be terminated by any of the 
parties. The Council shall provide its comments to the Secretary of the 
Army. The Secretary must consider the Council's comments and provide a 
summary of the final decision if he elects to proceed with demolition.
    Question. It is the opinion of some that the majority of structures 
eligible for the historic register are simply old, with no historical 
significance. What actions are required if you believe demolishing an 
historic or eligible property is the best solution?
    Answer. If the Air Force wishes to demolish either a listed or 
eligible property it must first consult with the State Historic 
Preservation Officer (SHPO). If the SHPO concurs, the Air Force may 
proceed with demolition. Documentation of the property's significance 
and design may or may not be required prior to demolition. If agreement 
between the installation and the SHPO cannot be reached, the 
consultation process will advance to the Advisory Council for Historic 
Preservation (ACHP). That consultation may still involve only the 
installation and the ACHP unless the installation requests assistance 
from the MAJCOM or Air Staff. Ultimately, if agreement between the ACHP 
and the installation cannot be reached, the Air Force's notice of its 
final decision to demolish a historic building is sent to the ACHP by 
the head of the agency (in the Air Force's case that is SAF/MIQ who is 
designated the Air Force's Federal Preservation Officer).
    Question. It is the opinion of some that the majority of structures 
eligible for the historic register are simply old, with no historical 
significance. What actions are required if you believe demolishing an 
historic or eligible property is the best solution?
    Answer. Like any other undertaking that affects an historic 
building, demolition would trigger the consultation process with the 
State Historic Preservation Officer (SHPO), interested parties, and in 
some cases, the Advisory Council on Historic Preservation. The National 
Historic Preservation Act does not prescribe an outcome, merely that we 
enter into consultation concerning the affects of our proposed action. 
If a proposed undertaking impacts an historic property, we consult with 
the SHPO on the affect of those actions in accordance with 36 CFR 800, 
Protection of Historic Properties
    Question. It is the opinion of some that the majority of structures 
eligible for the historic register are simply old, with no historical 
significance. What actions are required if you believe demolishing an 
historic or eligible property is the best solution?
    Answer. Simply being over fifty years of age does not make a 
structure eligible for the National Register and subject to the 
requirements of the National Historic Preservation Act (NHPA). A 
structure must meet the criteria for eligibility set forth at 36 CFR 
60.4; for example, a building that is of a significant architectural 
style, or a site that is associated with a significant historic event. 
Even if the structure is listed on the National Register and the State 
Historic Preservation Officer objects to demolition, it may be 
demolished if the Federal agency complies with the consultation process 
pursuant to Section 106 of the NHPA.
    Question. In conjunction with that, can you explain the Services' 
centralized demolition plan aimed at removing structures without 
historical significance?
    Answer. To stop the unnecessary maintenance of facilities or 
structures which are excess or obsolete to the Services, Defense Reform 
Initiative Directive (DRID) #36 was issued in May 1996. This directive 
required the demolition/disposal of 14.9 million square feet of excess 
or obsolete Air Force facility space between Fiscal Year 1998-2003, 
with similar goals set for the other Services. The goals were based 
upon a previous survey of installations to identify their current and 
anticipated excess structures and to develop a plan for their disposal. 
The current Air Force demolition plan is focused on identifying excess 
facilities which can be demolished by Fiscal Year 2003 to meet the DRID 
#36 commitment.
    Question. In conjunction with that, can you explain the Services' 
centralized demolition plan aimed at removing structures without 
historical significance?
    Answer. The centralized demolition plan funds the demolition of 
facilities in poor condition that have been identified by the bases as 
excess to their needs. This takes place after the base has performed 
the checks necessary with the applicable organizations required to 
excess a facility.
    Question. In conjunction with that, can you explain the Services' 
centralized demolition plan aimed at removing structures without 
historic significance?
    Answer. The services have undertaken the demolition of structures 
that have no further utility in an effort to reduce the cost of 
ownership (high maintenance and utility costs) and remove safety 
hazards.
    Question. If you want to demolish a building, but other parties 
disagree, are you required to yield to their wishes?
    Answer. No, an extensive compliance process described above, is 
required in order to reach the final decision to proceed with 
demolition. However, disagreements with the SHPO over determinations of 
eligibility or resolution of adverse effects must be resolved through 
specific steps outlined in the regulation, possibly resulting in 
project delays.
    Question. If you want to demolish a building, but other parties 
disagree, are you required to yield to their wishes?
    Answer. The initial decision to demolish a facility rests with the 
installation commander. After exploring all issues related to a 
facility's demolition including its historic value, the decision to 
retain or demolish a facility is based on knowing the best interests of 
the Air Force. However, in accordance with Section 106 of the National 
Historic Preservation Act, the commander must first consult with the 
State Historic Preservation Office (SHPO) before making a decision to 
demolish a historic building. If agreement between the installation and 
the SHPO cannot be reached, the consultation process will advance to 
the Advisory Council for Historic Preservation (ACHP). That 
consultation may still involve only the installation and the ACHP 
unless the installation requests assistance from the Major Command 
(MAJCOM) or Air Staff. Ultimately, if agreement between the ACHP and 
the installation cannot be reached, the Air Force's notice of its final 
decision to demolish a historic building is sent to the ACHP by the 
head of the agency (in the Air Force's case that is the Deputy 
Assistant Secretary of the Air Force of Environment, Safety and 
Occupational Health (SAF/MIQ) who is designated the Air Force's Federal 
Preservation Officer).
    Question. If you want to demolish a building, but other parties 
disagree, are you required to yield to their wishes?
    Answer. We have incurred no problems with demolition actions. As a 
general rule, these facilities have deteriorated beyond their useful 
life span. Reporting of excess, unutilized, underutilized, demolition 
is performed IAW 41 CFR, Chapter 101, and GSA is the disposal agent. 
The Standard screening process includes:
    --HUD, the clearinghouse for the McKinney Act (homeless needs).
    --Other federal, state, and local agencies.
    --Public Discount agencies for use as airports, hospitals, schools, 
parks, historic monuments, highways, and wildlife conservation purposes
    --Public/general sector
    Interested agencies must submit a request to GSA if they determine 
a need for the excess facility. GSA has final approval on such request 
to:
    --obtain concurrence of holding DOD agency to ensure proposed use 
is compatible with the military mission
    --validate use is consistent with the highest and best use of the 
property.
    Question. If you want to demolish a building, but other parties 
disagree, are you required to yield to their wishes?
    Answer. No. We must follow the procedures of 36 CFR 800, Protection 
of Historic Properties. A Federal agency is required to consult and 
take into consideration the comments of State Historic Preservation 
Officers (SHPO) and the Presidents Advisory Council on Historic 
Preservation (ACHP) when proposing an action affecting a historic 
property. However, failure to implement the recommendations of the SHPO 
and ACHP could result in litigation against a Federal agency.
    Question. How does the transfer of historic properties to National 
and State Park Services' or non-profit organizations fit into each 
Services' overall plan for historic property management?
    Answer. The transfer of historic properties to either the National 
or State Park Services or other non-profit organizations does not fit 
in the Army's overall plan for historic property management because 
only excess properties are considered for transfer.
    Question. What criteria are used to designate properties that can 
be transferred and those properties the Services' want to keep in their 
inventory?
    Answer. The principal criterion for the transfer of properties is 
that they are excess. Conversely, the principal criterion for retaining 
a property is that the Army has a continuing or foreseeable need for 
it. The Army is working with the National Trust for Historic 
Preservation to analyze and evaluate opportunities for public and 
private partnerships and the leasing of historic properties. This 
initiative would possibly mitigate on-going problems with maintenance 
costs, allow the Army to retain ultimate ownership of the property, 
ensure the proper upkeep of our cultural resources, and provide 
possible profits to apply to the upkeep of the property in question or 
other properties on the installation. This initiative is still in the 
formulative stage.
    Question. How does the transfer of historic properties to National 
and State Park Services' or non-profit organizations fit into each 
Service's overall plan for historic property management?
    Answer. The Air Force has not developed a specific plan or strategy 
for the transfer of its historic properties to the National Park 
Service, state park agencies, or non-profit organizations. However, it 
is considering approaches to such actions as part of a Historic 
Properties Integrated Process Team (IPT) which is examining new cost 
saving approaches to Air Forces historic property management.
    Question. How does the transfer of historic properties to National 
and State Park Services' or non-profit organizations fit into each 
Service's overall plan for historic property management?
    Answer. The Marine Corps has not developed a specific plan for the 
transfer of its historic properties to the National Park Service, state 
park agencies, or non-profit organizations. The Marine Corps is 
considering innovative approaches to capture cost savings to assist in 
effectively managing its historic properties.
    Question. How does the transfer of historic properties to National 
and State Park Services's or non-profit organizations fit into each 
Service's overall plan for historic propety management?
    Answer. Any property, historic or otherwise for which a military 
department no longer has a military requirement, should either be 
planned for demolition or declared excess to the General Services 
Administration (GSA) pursuant to Section 202 of the Federal Property 
and Administrative Services Act of 1949, 40 U.S.C. 483. GSA may 
transfer the property to the National Park Service or another Federal 
agency. If no Federal agency has a need for the property, GSA would 
have the discretion to convey the property to a State for park purposes 
or historic monument purposes as well as sell it at public sale. 40 
U.S.C. 484(k). Absent special legislation, a nonprofit organization 
could only acquire surplus property as a high bidder at public sale. 
GSA will occasionally include restrictive covenants to protect historic 
properties in the deed for negotiated sales and public sales.
    Question. What criteria are used to designate properties that can 
be transferred and those properties the Services' want to keep in their 
inventory?
    Answer. In compliance with the Federal Property Management 
Regulations (41 CFR, subpart 101-47.802) and the responsibilities and 
levels of authority defined in AFI 32-9002, Use of Real Property 
Facilities, installation commanders and base civil engineers must 
review real property holdings annually to identify property not being 
used, underutilized, or not being put to optimum use.
    The installation commanders must take into consideration if the 
property is essential to the current or programmed missions. Location 
of the property is also considered if it is significant to the mission. 
Property should be retained if it is essential to protect future 
mission flexibility, operational changes, changes in equipment types, 
mobilization for national security emergency, or for research or 
development of future defense or weapons systems. For a more detailed 
listing, see AFI 32-9002, Use of Real Property Facilities, paragraph 
1.3. See AFI 32-9002 for the criteria that determines if the Air Force 
is authorized to retain government-owned, leased real property.
    Question. What criteria are used to designate properties that can 
be transferred and those properties the Services' want to keep in their 
inventory?
    Answer. Currently, specific criteria have not been developed to 
address transfer of historic properties.
    Question. What criteria are used to designate properties that can 
be transferred and those properties the Services' want to keep in their 
inventory?
    Answer. The military departments may only retain property for which 
they have a foreseeable military requirement and they must report other 
property as excess to the General Services Administration.
    Question. What efforts are currently being made by the Department 
to reach programmatic agreements with the SHPOs and the Advisory 
Council on Historic Preservation.
    Answer. The Navy recently completed a regional programmatic 
agreement for naval activities in Hampton Roads, VA, and a nationwide 
programmatic agreement on historic family housing. The Navy currently 
is working on two programmatic agreements for Pearl Harbor: one covers 
routine operations, and the other covers the Ford Island Redevelopment 
Initiative.
    The Air Force currently does not have any Service-wide programmatic 
agreements established or in the works. Several Air Force bases have 
individual programmatic agreements with their respective SHPOs.
    In 1986, the Military Services signed a programmatic agreement with 
the Advisory Council and the National Conference of State Historic 
Preservation Officers concerning the treatment of World War II wood 
buildings. This document was prepared in response to the 1983 
congressional directive to demolish all World War II temporary wooden 
construction. The Army is interested in pursuing a similar nation-wide 
approach to address Capehart and Wherry family housing.

               General and Flag Officer Quarters (GFOQs)

    Question. The fiscal year 2001 National Defense Authorization Act 
amended the provision in Title 10 of the United States Code, which put 
space limitations on military family housing. As a result, the 
Services' may now construct GFOQ's in excess of 2,100 square feet. With 
this new authority, what efforts are being made by each of the 
Services' to replace aging GFOQ's that are not cost efficient to 
maintain?
    Answer. With this new authority the Air Force will continue to meet 
its GFOQ requirements by the most economical means available. For each 
Air Force housing unit, whether a general officer quarters or not, we 
identify the total cost to make whole-house improvements and meet 
modern-day standards. Typically, when the improvement cost exceeds 
seventy percent of the replacement cost, our economic analysis will 
show that, due to life cycle cost and the need to provide functional 
floor plans, replacement is more cost effective than improvement. We 
will continue to program for replacement of general officer quarters 
and other housing units which our analysis shows are no longer cost-
efficient to maintain or improve.
    Question. The fiscal year 2001 National Defense Authorization Act 
amended the provision in Title 10 of the United States Code, which put 
space limitations on military family housing. As a result, the Services 
may now construct GFOQ's in excess of 2,100 square feet. With this new 
authority, what efforts are being made by each of the Services to 
replace aging GFOQ's that are not cost efficient to maintain?
    Answer. The Marine Corps is reviewing GFOQ's with significant 
revitalization requirements for replacement based on the life cycle 
economic analysis of the revitalization/replacement alternatives, 
consideration of their national or local historic significance, and 
their intrinsic links to Marine Corps history.
    Although we believe the new legislation will allow us to eliminate 
numerous aging GFOQs, at present, the Marine Corps is concentrating its 
GFOQ efforts on the revitalization of several units that are National 
Historic Landmarks. Because of their contributions to the history of 
the Corps, we determined that it would be inappropriate to eliminate 
these national treasures.
    Question. The FY 2001 National Defense Authorization Act amended 
the provision in Title 10 of the United States Code, which put space 
limitations on military family housing. As a result, the Services' may 
now construct GFOQs in excess of 2,100 square feet. With this new 
authority, what efforts are being made by each of the Services to 
replace aging GFOQs that are not cost effective to maintain?
    Answer. The Navy has reviewed the costs of all flag quarters and 
developed long-range maintenance plans for each flag home. The Navy has 
participated with OSD and the National Association of Home Builders on 
a study of comparable sized homes in the private sector. The Navy is 
evaluating flag quarters replacement candidates in view of the 
amendment to title 10 of the United States Code. Future opportunities 
for flag quarters replacement through traditional military construction 
or PPV initiatives will be explored.

                      Historic Property Management

    Question. Given the number of properties that will reach 50 years 
of age in the next five years, do the Services face a huge workload in 
reviewing these properties for historical significance and consulting 
with the State Historic Preservation Offices? What tools are available 
to ease these reviews?
    Answer. Yes, the Army faces a daunting workload in assessing the 
historic significance of properties that reach 50 years of age in the 
next 5 years. The Army is developing historic contexts that will help 
installations assess their properties in a uniform manner. The Army is 
also working with the Advisory Council on Historic Preservation to 
develop uniform treatments for classes of properties. This effort is 
similar to the nation-wide programmatic agreement developed for the 
demolition of World War II temporary construction. The first effort 
will address Cold War era housing, comprised mostly of Capehart and 
Wherry housing and has the potential to effect 20,000 structures.
    Question. Given the number of properties that will reach 50 years 
of age in the next five years, do the Services' face a huge workload in 
reviewing these properties for historical significance and consulting 
with the State Historic Preservation Officers? What tools are available 
to ease these reviews?
    Answer. Although the Air Force will have more properties reaching 
50 years of age in the next five years than in previous periods, we 
don't believe that their evaluation will represent an overwhelming 
workload. Many of the properties approaching 50 years old have already 
been ``screened'' in our initial surveys and the vast majority will be 
eliminated from any further consideration of eligibility as a result of 
that screening. The cost for the evaluation of buildings identified in 
the initial screening must be covered in the Air Force conservation 
budget. Our guidance to the major commands addresses those 
requirements. The most important tool to assist in the evaluation of 
our historic properties is the Cultural Resources Management Plan. 
Other tools specifically designed to assist in the evaluation of 
historic properties have been developed by the National Park Service 
and by the Department of Defense through the Legacy Resource Management 
Program.
    Question. Given the number of properties that will reach 50 years 
of age in the next five years, do the Services' face a huge workload in 
reviewing these properties for historical significance and consulting 
with the State Historic Preservation Offices? What tools are available 
to ease these reviews?
    Answer. No, the National Historic Preservation Act (NHPA) comes 
into play when an ``undertaking'' occurs. If we don't plan an event, 
then the review can wait. However, we are required under section 110 of 
NHPA to know what our inventory of historic properties is, and the best 
way to implement that requirement is through an ongoing process of 
inventory and evaluation. Two useful tools are Integrated Cultural 
Resources Management Plans, and associated inventories and programmatic 
agreements on particular categories of properties. The USMC has active 
programs underway in both areas.
    Question. Given the number of properties that will reach 50 years 
of age in the next five years, do the Services' face a huge workload in 
reviewing these properties for historical significance and consulting 
with the State Historic Preservation Offices? What tools are available 
to ease these reviews?
    Answer. No, the National Historic Preservation Act (NHPA) comes 
into play when an ``undertaking'' occurs. If we don't plan an event 
then the review can wait. However, we are required under Section 110 of 
NHPA to know what our inventory of historic properties is, and the best 
way to implement that requirement is through an ongoing process of 
inventory and evaluation. Two useful tools are Integrated Cultural 
Resources Management Plans, and associated inventories and Programmatic 
Agreements on particular categories of properties.

                           Accounting System

    Question. The Committee understands the Services' reluctance to 
place funding associated with historic properties in a separate line-
item account. Specifically, the lack of flexibility and the inability 
to separate maintenance costs not associated with the historic 
significance of the structure would be difficult. However, with no 
accounting system in place to properly track these costs, the potential 
for excessively high expenditures on these properties is greatly 
increased. How do you propose we better track these expenditures 
without creating a separate, sole-source historic preservation account?
    Answer. A system currently exists to track maintenance costs by 
specific properties on an installation. Once the inventory system is 
improved to identify listed and eligible historic properties, 
maintenance and repair costs for any property of interest can be 
researched. Expenditures on some historic properties are already 
controlled because of existing Congressional reporting requirements. 
Additionally, all major projects in family housing costing more than 
$20,000 per dwelling unit must be submitted to Congress prior to the 
execution of the project.
    Question. The Committee understands the Services' reluctance to 
place funding associated with historic properties in a separate line-
item account. Specifically, the lack of flexibility and the inability 
to separate maintenance costs not associated with the historic 
significance of the structure would be difficult. However, with no 
accounting system in place to properly track these costs, the potential 
for excessively high expenditures on these properties is greatly 
increased. How do you propose we better track these expenditures 
without creating a separate, sole-source historic preservation account?
    Answer. The Air Force agrees with the GAO report's observation that 
we have not maintained an accurate, comprehensive inventory of historic 
properties. As an initial response to the GAO report, we accomplished a 
data call to the Air Force major commands to provide a full accounting 
of the number of historic properties both listed and eligible for the 
National Register of Historic Places. As a result, we now have much 
more complete and updated data on our historic properties. For the 
present, the only means to update such information is by data call to 
the major commands. For the future, our Automated Civil Engineer 
System-Real Property (ACES-RP) module will collect and integrate 
historic properties data, which will be accessible to installations, 
major commands and the headquarters staff, so that we may all view and 
update the same information in a comprehensive database. This same 
software will enable us to link to real property records and 
maintenance data so that we may cross-reference that data for historic 
properties.
    Question. The Committee understands the Services' reluctance to 
place funding associated with historic properties in a separate line-
item account. Specifically, the lack of flexibility and the inability 
to separate maintenance costs not associated with the historic 
significance of the structure would be difficult. However, with no 
accounting system in place to properly track these costs, the potential 
for excessively high expenditures on these properties is greatly 
increased. How do you propose we better track these expenditures 
without creating a separate, sole-source historic preservation account?
    Answer. There are sufficient accounting mechanisms in place to 
track and monitor historic and non-historic funding requirements. 
Funding regulations require Congressional approval of maintenance costs 
exceeding specified funding limits for historic and non-historic 
properties, thereby, giving final approval authority to the Congress.
    Question. The Committee understand the Services' reluctance to 
place funding associated with historic properties in a separate line-
item account. Specifically, the lack of flexibility and the inability 
to separate maintenance costs not associated with the historic 
significance of the structure would be difficult. However, with no 
accounting system in place to properly track these costs, the potential 
for excessively high expenditures on these properties is greatly 
increased. How do you propose we better track these expenditures 
without creating a separate, sole-source historic preservation account?
    Answer. Any system to track meaningfully the funding associated 
with historic properties must be able to do the following:
     Since most historic buildings are in current use, provide 
a way to distinguish between operating costs resulting from the 
building's historic status and other costs that would be expended 
whether the function were housed in a historic building or not. For 
example, most utility costs are driven by the needs of the function 
housed in a building, not by the historic status of the building 
itself.
     Distinguish between maintenance and repair costs resulting 
from a building's historic status and costs resulting from other 
factors. For example, Department of Defense studies of the costs of 
historic family housing indicate that maintenance costs per square foot 
are roughly the same for historic and non-historic housing, but 
historic housing is typically larger than non-historic housing, so 
absolute costs are higher. The absolute-cost driver is therefore 
usually the building's size and not its historic status. A historic 
building may need frequent communications system repair and 
maintenance, but this is likely because of mission requirements and 
rapidly changing telecommunications standards, not because the building 
is historic. Even costs with direct historic components may not be 
wholly attributable to historic status: all buildings need periodic 
window and roof maintenance whatever their age or historic status, so 
only a portion of those costs might arise solely from historic 
integrity considerations.
     Adequately capture long-term life-cycle savings, where 
present. Cost tracking systems would then have to be able to identify 
excessive costs vs. acceptable costs, and the tracking systems 
themselves should be economical in proportion to the expected benefit 
to be gained from data collection and analysis.
    Question. The fiscal year 2001 National Defense Authorization Act 
enhanced the authority of the military departments to lease non-excess 
property (10 U.S.C. 2667, as amended). How can the Services' use this 
new enhanced leasing statute to assist in historic property management?
    Answer. The Army is currently developing a program of innovative 
approaches for the use of leases, gifts and other partnerships to 
rehabilitate selected historic properties. We believe that use of the 
new enhanced leasing statute (10 U.S.C. 2667) will assist in relieving 
the Army of costs for renovation, operation and maintenance for 
selected, under-utilized, historic properties.
    Question. The fiscal year 2001 National Defense Authorization Act 
enhanced the authority of the military departments to lease non-excess 
property (10 U.S.C. 2667, as amended). How can the Services' use this 
new enhanced leasing statute to assist in historic property management?
    Answer. This statute has long permitted leasing of non-excess 
properties to private interests. The new enhanced statute allows for a 
greater use of ``in-kind'' consideration in lieu of cash rent for non-
excess properties. Non-excess properties are those under the control of 
the Air Force that are not needed for public use and that are not 
classified as excess property by Section 3 of the Federal Property and 
Administrative Services Act of 1949. We are examining the pros and cons 
of its application as part of our Historic Properties Integrated 
Process Team's review of new innovations for historic property 
management.
    The fiscal year 2001 National Defense Authorization Act enhanced 
the authority of the military departments to lease non-excess property 
(10 U.S.C. 2667, as amended).
    Question. How can the Services' use this new enhanced leasing 
statute to assist in historic property management?
    Answer. The funds raised pursuant to the authorities in 10 U.S.C. 
2667 may be used to pay for the maintenance and repair of historic 
structures. This authority alone does not free us of the responsibility 
of ensuring funds are available to properly care for historic 
facilities that we have chosen to retain.
    The fiscal year 2001 National Defense Authorization Act enhanced 
the authority of the military departments to lease non-excess property 
(10 U.S.C. 2667, as amended).
    Question. How can the Services use this new enhanced leasing 
statute to assist in historic property management?
    Answer. The changes to 10 U.S.C. 2667 allow the military 
departments to accept in-kind consideration for the leasing on non-
excess property. The military departments may require the lessee to 
repair and maintain the structure they are leasing or other structures 
on base including historic properties as consideration.

                            Budget Exhibits

    Question. In the past, the military services have provided annual 
budget exhibits to Congress that showed the inventory and the cost to 
maintain, repair, and improve historic family housing. The Committee 
understands the cost exhibit will not appear in the fiscal year 2002 
budget submission, but the inventory exhibits will continue to be 
provided. Why are the annual budget exhibits showing the cost to 
maintain, repair, and improve historic family housing being eliminated 
from the fiscal year 2002 budget submission?
    Answer. The Family Housing Historic Housing Costs Exhibit FH-5 was 
eliminated per guidance from the Office of the Secretary of Defense.
    Question. In the past, the military services have provided annual 
budget exhibits to Congress that showed the inventory and the cost to 
maintain, repair, and improve historic family housing. The Committee 
understands the cost exhibit will not appear in the fiscal year 2002 
budget submission, but the inventory exhibits will continue to be 
provided. Why are the annual budget exhibits showing the cost to 
maintain, repair, and improve historic family housing being eliminated 
from the fiscal year 2002 budget submission?
    Answer. The exhibit on Historic Housing Cost has been removed due 
to concerns about the reliability of data as documented in a recent GAO 
report (Defense Infrastructure--Military Services Lack Reliable Data on 
Historic Properties, GAO-01-437). The Office of the Secretary of 
Defense (OSD) concurred with the GAO recommendation that the Services 
update their real property data bases to improve the accuracy and 
reliability of real property data, including historic properties. Based 
on the above, OSD retracted this exhibit, however once the Services' 
property records are updated, the exhibit on Historic Housing Cost may 
be reinstated. The Air Force will continue to provide overall military 
family housing inventory data as part of the President's budget 
submission.
    Question. The Department released a report entitled ``The Cost of 
Maintaining Historic Military Family Housing'' in February 2001. Please 
submit a copy of this report for the record.
    Answer. A copy of the report is attached.
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                      Historic Property Inventory

    Question. By Service, how many Department of Defense properties are 
listed on the National Register of Historic Places? Please provide a 
break-out of the number by housing units and non-housing structures.
    Answer. Accurate data is not available to answer the question. The 
Army has a total of approximately 12,000 structures that are either 
listed or eligible for listing on the National Register of Historic 
Places. Of this total, 7,624 are non-housing and 4,376 are housing 
structures. The Army is in the process of creating a data structure and 
process to capture this information. This effort will be completely by 
fiscal year 2002.
    Question. By Service, how many Department of Defense properties are 
eligible for listing on the National Register of Historic Places? 
Please provide a break-out of the number by housing units and non-
housing structures.
    Answer. Accurate data is not available to answer the question. The 
Army has a total of approximately 12,000 structures that are either 
listed or eligible for listing on the National Register of Historic 
Places. Of this total, 7,624 are non-housing and 4,376 are housing 
structures. The Army is in the process of creating a data structure and 
process to capture this information. This effort will be completed by 
fiscal year 2002.
    Question. By Service, in the next five years, how many Department 
of Defense properties will reach 50 years of age (the minimum age for 
listing a property on the National Register)? Please provide a break-
out of the number by housing units and non-housing structures.
    Answer. According to our real property inventory system 
(Headquarters Executive Information System) 8,581 buildings and 
structures will turn 50 years old in the next 5 years. This includes 
1,757 Army family housing buildings and 6,824 non-housing buildings and 
structures. The Army's inventory data was screened to eliminate 
properties that would not be a future liability if they were determined 
to be eligible as historic properties.
    Question. By Service, how many Department of Defense properties are 
listed on the National Register of Historic Places? Please provide a 
break-out of the number by housing units and non-housing structures.
    Answer. The Air Force has 1,264 properties listed on the National 
Register of Historic Places. Of the listed Air Force properties, 498 
are non-housing structures and 770 are housing structures. Those 770 
housing structures listed contain 1,094 housing units (because some 
structures contain multiple units).
    Question. By Service, how many Department of Defense properties are 
listed on the National Register of Historic Places? Please provide a 
break-out of the number by housing units and non-housing structures.
    Answer.

----------------------------------------------------------------------------------------------------------------
                                                                   On/eligible     On/eligible   Total bldgs on/
                                                                    National        National         eligible
                          Installation                              Register      Register non-      National
                                                                 housing--bldgs  housing--units  Register--bldgs
----------------------------------------------------------------------------------------------------------------
MARBKS Washington DC...........................................              5               3               8
MCAS Cherry Point NC...........................................             53               4              57
MCB Hawaii HI..................................................  ..............             21              21
MCB Camp Lejeune NC............................................  ..............            210             210
MCAS Miramar CA................................................  ..............              3               3
MCRD Parris Island SC..........................................              5              54              59
MCB Camp Pendleton CA..........................................              1               1               2
MCB Quantico VA................................................            164              75             239
MCRD San Diego CA..............................................              5              22              27
MCAS Yuma AZ...................................................  ..............              2               2
                                                                ------------------------------------------------
    Total......................................................            233             395             628
----------------------------------------------------------------------------------------------------------------
Note. Properties ``On/Eligible'' for listing on the National Register of Historic Places are evaluated and
  maintained in accordance with the same National Historic Preservation Act guidelines. Therefore, those
  properties are identified by the same reporting requirements.

    Question. By Service, how many Department of Defense properties are 
listed on the National Register of Historic Places? Please provide a 
break-out of the number by housing units and non-housing structures.
    Answer.

------------------------------------------------------------------------
                                                  Housing    Non-housing
------------------------------------------------------------------------
Navy..........................................          408       *(\1\)
------------------------------------------------------------------------
 \1\ We estimate a total of 8,400 buildings on or eligible for the
  National Register. Navy is developing procedures to capture inventory
  numbers more accurately in the Internet Navy Facilities Asset Data
  Store (INFADS).

    Question. By Service, how many Department of Defense properties are 
eligible for listing on the National Register of Historic Places? 
Please provide a break-out of the number by housing units and non-
housing structures.
    Answer. The Air Force has 2,919 properties eligible for listing on 
the National Register, but not listed. Of those, 2,223 are non-housing 
structures and 697 are housing structures. The 697 eligible housing 
structures contain 1,232 housing units (because some structures contain 
multiple units.)
    Question. By Service, how many Department of Defense properties are 
eligible for listing on the National Register of Historic Places? 
Please provide a break-out of the number by housing units and non-
housing structures.
    Answer. The Marine Corps has 628 properties on or eligible for 
listing on the National Register of Historic Places; 395 are non-
housing structures and 233 are housing properties.
    Properties ``On/Eligible'' for listing on the National Register of 
Historic Places are evaluated and maintained in accordance with the 
same NHPA guidelines. Therefore, those properties are identified by the 
same reporting requirements.
    Question. By Service, how many Department of Defense properties are 
eligible for listing on the National Register of Historic Places? 
Please provide a break-out of the number by housing units and non-
housing structures.
    Answer.

------------------------------------------------------------------------
                                                  Housing    Non-housing
------------------------------------------------------------------------
Navy..........................................          255        (\1\)
------------------------------------------------------------------------
\1\ We estimate a total 8,400 buildings on or eligible for the National
  Register. Navy is developing procedures to capture inventory numbers
  more accurately in the Internet Navy Facilities Asset Data Store
  (INFADS).

    Question. By Service, in the next five years, how many Department 
of Defense properties will reach 50 years of age (the minimum age for 
listing a property on the National Register)? Please provide a break-
out of the number by housing units and non-housing structures.
    Answer. Approximately 13,115 Air Force structures (6,993 housing 
structures and 6,122 non-housing structures) will reach 50 years of age 
in the next five years. The 6,993 housing structures consists of 7,620 
housing units (because some housing structures contain multiple units).
    Question. By Service, in the next five years, how many Department 
of Defense properties will reach 50 years of age (the minimum age for 
listing a property on the National Register)? Please provide a break-
out of the number by housing units and non-housing structures.
    Answer. The recent GAO study identified that about 8,400 of our 
buildings will turn 50 years old within the next 5-10 years; 6,684 of 
which are family housing structures and the remaining 1,716 are non-
housing structures.
    Question. By Service, in the next five years, how many Department 
of Defense properties will reach 50 years of age (the minimum age for 
listing a property on the National Register)? Please provide a breakout 
of the number by housing units and non-housing structures.
    Answer.

------------------------------------------------------------------------
                                        Housing           Non-housing
------------------------------------------------------------------------
Navy............................  Est. 6,000-6,500..  Est. 1,874
------------------------------------------------------------------------
Note. Excludes Base Realignment & Closure (BRAC) properties. Based on
  Internet Navy Facilities Assets Data Store (INFADS).

                       White Sands Missile Range

    Question. White Sands Missile Range in New Mexico is now 55 years 
old. How many historic buildings are located at White Sands Missile 
Range?
    Answer. There are 65 buildings on White Sands Missile Range that 
are either listed or eligible for listing on the National Register of 
Historic Places.
    Question. Are you satisfied that we have a cost-effective approach 
for selecting the buildings to be maintained?
    Answer. Yes. Prioritization of maintenance is done at the 
installation level and, as the primary user, they are the best 
authority to determine the most cost-effective approach. The 
installation commander is given the maximum flexibility to fund the 
requirements at the local level, providing the maximum benefit to the 
Army.
                                         Wednesday, March 21, 2001.

                         HOUSING PRIVATIZATION

                               WITNESSES

RANDALL A. YIM, DEPUTY UNDER SECRETARY OF DEFENSE FOR INSTALLATIONS
PAUL W. JOHNSON, DEPUTY ASSISTANT SECRETARY OF THE ARMY, INSTALLATIONS 
    AND HOUSING
DUNCAN HOLADAY, ACTING ASSISTANT SECRETARY OF THE NAVY, INSTALLATIONS 
    AND FACILITIES
JIMMY G. DISHNER, DEPUTY ASSISTANT SECRETARY OF THE AIR FORCE, 
    INSTALLATIONS

                       Statement of the Chairman

    Mr. Hobson. Good morning. The committee will come to order. 
Our hearing today will focus on the privatization of military 
family housing.
    I am very pleased to have our witnesses here today. From 
OSD, Randall Yim, Deputy Under Secretary of Defense for 
Installations; from the Army, Paul Johnson, Deputy Assistant, 
Secretary of the Army, Installations and Housing; from the 
Navy, Duncan Holaday, Deputy Assistant Secretary of the Navy, 
Installations and Facilities; Air Force, Jim Dishner, Deputy 
Assistant Secretary of the Air Force for Installations.
    Let me take a moment to say that I think this is probably 
the subcommittee's most important hearing of the year. To meet 
the goal of eliminating all inadequate housing by 2010 we have 
got to accelerate both the privatization and traditional 
military construction programs. If we don't get privatization 
going in the right direction from the beginning, then we 
seriously jeopardize the future of the program and our ability 
to get military families into decent housing in a timely 
fashion.
    To date, we have seen 6,722 housing units privatized at 10 
installations since 1996. Although this program may seem 
substantial, it hasn't kept pace with our early expectations. 
Frankly it has been too slow.
    We can all agree that we would like to see more progress 
made. However, I think it is important that we don't push poor 
projects just to meet expectations. Time should be taken to 
ensure the best deal is structured, not just in terms of low 
costs, but with regards to government protection in the deal as 
well. This is a complicated process that is still evolving. 
Each service is trying a different approach which I think is 
healthy. My goal is to develop an arsenal of approaches 
available for the services to pull from to best fit the housing 
needs of an installation.
    One size doesn't fit all. We have got to figure out what 
works for a particular service on a particular base and then 
look at the economics and make sure it works.
    It is important to mention that this committee doesn't 
believe privatization is the only solution to the housing 
situation. Each project or installation is different and we 
have got to evaluate it appropriately. The solution lies with 
the Department's three-pronged approach: privatization, 
increasing housing allowances to eliminate out-of-pocket 
expenses, and continuing with traditional military 
construction. We will continue to work with the services in 
determining the optimal mix needed to meet the Department's 
housing goals.
    Despite the advancements in the privatization effort, I 
have a few concerns. For instance, how do the services 
guarantee contractor performance? What happens if the 
contractor cannot make his mortgage payment? Or if he defaults 
on his loan, who is looking out for the government's interest 
in this case? These are some fundamental questions surrounding 
privatization that I think still need to be addressed. I look 
forward to working with the services to address these issues.
    Our military families deserve the best homes we can give 
them. Privatization allows us to accomplish this faster than 
otherwise possible. Doing it wisely will protect the government 
from undue liability and ensure these families' homes are never 
jeopardized.
    I would also like to remind you that we are going to go and 
we are going to use Texas as kind of a microcosm. We are going 
to look at some things. Fort Hood is something that is going to 
be visited. The Air Force has a facility at Lackland that they 
have privatized. We are going to the Navy to look at the Navy 
project there. So the Army, the Air Force, the Navy, we are 
going to be looking at the various projects there to get some 
idea. I hope some of the committee will go along and take a 
look at this.
    And then later on, we are going to do another trip to--I am 
just announcing so everybody knows in advance. We are going to 
go to Hawaii where there are special problems that relate to 
housing there. Then we are going to go to Okinawa.Then we are 
going to go to Japan, and we are going to go to Korea, Japan is pretty 
good and Korea pretty bad. So that is what we are going to do.
    I want to thank you for your coming. I look forward to your 
testimony, and let me recognize our distinguished ranking 
member who has worked with us very well on this committee, Mr. 
John Olver of Massachusetts, for any opening remarks he would 
like to make for us, and then we will get to your statements.
    Mr. Olver. Thank you, Mr. Chairman. I just want to say that 
Mr. Edwards does his very best to represent all of Texas in 
this situation. Good to see all of you again. You have been 
before us before and were here last year, and I appreciate you 
being here again today.
    It is always easy to follow the Chairman on this particular 
hearing because his strategic and tactical approach to the 
issues of providing you with the necessary housing are so very 
close to mine. He has laid out much of what needs to be said in 
his opening here.
    I just want to say that since last year's hearing, there 
has been progress in--across, I think, pretty much every area. 
In some instances there has been substantial progress. Some it 
has been very slow, but each of these services is moving 
forward.
    What I do see out of your testimony is that we are slipping 
behind. I think the Chairman has already suggested to that in 
trying to meet the 2010 timetable of having all of our housing 
up to standard in the combined way, and obviously I am very 
interested in how we are going to get that back on track.
    I am very interested in what you are going to be giving us 
as this year's update to this program. Thank you.
    Mr. Hobson. First of all, let me say before we start off, I 
don't know how you guys feel, but I am very pleased that 
Randall is still here. We need continuity in order to keep this 
going. He has worked very well with all of us. I have a lot of 
confidence in what he has done and his staff in working with 
all of us to move this forward, and I very much appreciate the 
work he has done in the years I have worked with you as 
chairman, and especially during this period of time where some 
people are going, some people aren't gone and we are trying to 
move forward, and I appreciate the good work you have done, 
Randall. So we want to hear what you have to say today.

                      Statement of Randall A. Yim

    Mr. Yim. Thank you very much for the kind words, Mr. 
Chairman, Mr. Olver, members of the subcommittee. We are really 
very grateful for the committee's support for this housing 
program and your continued effort to assure that we devote the 
proper resources, not only the money, but the proper thought 
resources that are affecting our program within a reasonable 
period of time. This has been a lot of work, but I frankly 
can't think of anything more important than taking care of the 
men and women in our military, and their families.
    I also can't help but be reminded of that famous opening 
line of Charles Dickens from the Tale of Two Cities, ``it was 
the best of times, it was the worst of times.'' There is little 
better than seeing the excitement of the military family moving 
into a newly built house, and there is little worse than having 
to explain why we can't solve our housing problem overnight to 
a family living in substandard housing.
    During this past year, since the last hearing, we have made 
what I believe is significant progress; but it is absolutely 
true, there is much more we can learn and much more we can do 
and much we can do better, and much we should be doing better.
    So what I would like to do briefly, very briefly, is 
explain our three-part strategy, describe some of our 
problems--progress, explain where I believe we need to go and 
identify some areas of concerns that we are closely watching.
    Let me use one chart, if I could, and you have this in 
handouts, it will be difficult for you, but you have this in 
your packet. This is our three-prong approach. About 60 percent 
of our housing, about 180,000 units, is inadequate. It is 
absolutely clear to us that no one strategy can solve the 
problem. We need the strategic combination of the three, and 
our purpose in having the three-pronged approach frankly is 
threefold. One, we have to protect the resources that are 
currently being allocated; and secondly, we have to stretch 
those resources. We have to manufacture more money by 
leveraging upon those resources so that we can fix the problem 
quicker and get better quality products.
    So we focus first on housing allowances, our basic 
allowances for housing (BAH). We wanted those increased. We 
want to pay our people more. That is an immediate assistance. 
That means they could immediately afford more options existing 
in the private sector if we increase their housing allowance 
pay. Currently, before last year, the statute required that we 
pay a minimum of 15 percent out of pocket when people lived in 
nongovernment-owned housing. We thought that was inequitable 
for those people living on post. It created a problem for them. 
If we tried to privatize, there were very sincereconcerns that 
we were solving some of our housing problems on the backs of our people 
because they had to pay out-of-pocket expenses. So we thought one of 
the most effective approaches would be to eliminate that 15 percent 
out-of-pocket. It is being eliminated now, between now and 2005, and it 
does a couple of things.
    It immediately makes more options available for us. It is a 
more flexible program. We are not locking ourselves into a 50-
year or 20-year or 30-year deal by increasing the BAH. We can 
go out and go through the sheets and look at available housing 
in the private sector. It is, in theory, more dynamic, more 
adaptable because the BAH is adjusted. The housing allowance is 
adjusted annually. But you can adapt to market changes 
facilities a little more rapidly than you can in the middle of 
a development deal.
    And last but not least, we think to protect the money, it 
is a good investment because it is unlikely that within our own 
shops, our own comptrollers or programmers that a pay benefit 
would be reduced or diminished as opposed to a military 
construction project where you may see projects advance, but 
something dropping off the back end. There is no net gain in 
that, particularly since we are undergoing a lot of budget 
pressure with the transformation that is occurring in each of 
the services.
    A BAH increase as an important part of this strategy 
immediately makes the privatization deals more viable because 
that was the primary income stream that grows the privatization 
deals. So it improves not only the nature of the products, but 
we could get better quality houses; but the turnaround rate on 
those, we are getting more replacements than renovations. We 
can do this at a faster pace, but it is also crystal clear to 
us that BAH and privatization alone could not solve the problem 
and neither does throwing MILCON programs. I don't anticipate 
that we would ever eliminate the need for government-owned 
housing.
    So what I want to portray to you is that, this three-
pronged approach, is not an all-or-nothing approach. It isn't 
even at a specific location you cannot choose one of the three. 
I believe each and every location we have to develop a best mix 
of these three primary methods, BAH increases, housing 
allowance increases, privatization and MILCON, given the 
demographics of a particular location, very different in 
Killeen, Texas, with Fort Hood, than in Fort Meade, in Anne 
Arundel County in Maryland, or in Lackland or in Elmendorf in 
Alaska, or in Monterey in California. The demographics are 
different, the housing market conditions are different, the 
competitive housing marketplace is different, and the number of 
developers that are viable to compete in that marketplace are 
different.
    We need to evolve our program from last year where we 
wanted to get projects out on the street, get something 
demonstrated, to now saying we have some empirical data from 
the 10 projects that have been awarded, from the 6700 units 
that have been awarded. But to take that empirical data and let 
us analyze the best investment mix, where do we get the biggest 
bang for our buck? Do we stick it in BAH increases because 
there is a robust private sector market? Do we stick it in 
privatization where we know we are going to get competition? Or 
do we stick it in MILCON because of the demographics of our own 
base or the lack of a competitive outside development market 
that privatization isn't going to work? We are going to have to 
build and own our own stuff.
    That is the evolution that I see going on, and the reason 
we need to continue that evolution and thought is related to 
the second chart that I showed you last year, and these are in 
your packet, too.
    One of the reasons we need to talk about this best 
investment mix is that we created a development gap for 
ourselves. What I mean by development gap is the cost of 
constructing the project that we want is typically more than 
the income streams that we can bring to bear to finance that 
particular project. There are several reasons for that. One, we 
have this statutory 15 percent out-of-pocket costs. So the BAH 
income stream and housing allowance income stream was by 
statute until it changed 15 percent less of the total amount 
that would be necessary to drive the product--the project 
itself. That created a development gap.
    We also wanted more than we could afford. We typically 
built to our own standards or larger room size than what the 
income stream could support. That also created a development 
gap, and there was some perceived risks of doing business with 
the military or on the military base that drove up the cost of 
capital or increased the financing cost, again creating a 
development gap.
    But what we need finally is to bridge that gap, either by 
increasing the BAH, which is one way to do it, eliminate that 
out-of-pocket expense, use the privatization authorities that 
are available to us which are scored differently, so we can 
provide equity that is scored favorably, we can make direct 
loans, we can make secondary finance, we can make guarantees, 
these all have different scoring implications. I agree that 
scoring should not drive the project, but scoring is a fact of 
life that has to be considered in the right investment mix in 
the project or when none of those aspects can merge the 
development gap, fill it with military construction.
    An example of military construction is where we need 
tobuild per capita larger bedroom houses for some of our junior 
enlisted that have larger families. Their housing allowance is not 
going to allow them to afford a four bedroom house. It may be that the 
local housing market has a surplus of two bedrooms or three bedrooms, 
but not four bedrooms because the local housing market conditions don't 
support those larger types of rental units.
    So as a result we can target our MILCON and target our 
MILCON to those types of houses that either the BAH does not 
support or the private sector does not support. That is what I 
mean by getting a strategic mix.
    Again, we have made a lot of progress. We have 10 
privatization projects that have been awarded. We have 16 in 
solicitation right now. It is about 24,000 more units. We even 
have privatization both on and off base. So we have moved the 
debate away from off-base housing versus on-base housing. We 
can privatize on base. There has been a significant amount of 
privatization, even in the interior of the base. The Navy 
demonstrates that at Camp Pendleton, where they have a project 
right in the interior of the base.
    Mr. Hobson. Another government contribution is the land.
    Mr. Yim. Yes. We can actually give them equity 
contribution----
    Mr. Hobson. You put the land in, we don't charge rent for 
the land.
    Mr. Yim. Yes.
    Mr. Hobson. That is a contribution.
    Mr. Yim. Yes, and that could help bridge the development 
gap again also by bringing down the land costs.
    We are first testing the housing authority now. There is a 
project the Navy has in Norfolk, Virginia, about 80 units. We 
have the first major RCI unit coming on line from the Army in 
Fort Hood, Texas, that we are very optimistic we will show some 
of the advantages of a more flexible approach in a 6,000 unit 
housing project. That will basically double the size of the 
number of units that we have taken on line, and it is very 
important for us that we look at Fort Hood carefully because it 
is going to establish a lot of precedents, not only doubling 
our program, but in the future for all of the services' 
privatization projects.
    Where are we headed briefly? We need to incorporate what I 
have described as this investment strategy site specific. I am 
not talking about a generic investment strategy across the 
Nation. Each site has different demographics, different housing 
market conditions and different competitive environments. A 
site specific investment strategy that we have asked the 
services to incorporate into their housing master plan, to 
really make that investment strategy work, we need to do that. 
We have developed with the services help a privatization 
evaluation form. It is now in place. The services are reporting 
to us the key points in each of the deals as they go out on the 
street and as they are awarded, so we can roll them up, report 
not only to you here in Congress, but within our own shop to 
fine tune our program.
    And finally, we need to shift some of our focus. The 
construction phase is being completed in some of these 
projects. We didn't expect the projects to crash and burn, if 
they were going to crash and burn, during the construction 
phase. The risk was in entering into long-term 50-year deals 
where during the management phase, the project could run into 
trouble. There wasn't adequate capital reserves being built up 
to do the repair and replacements. The O&M became a problem. 
The condition of the property was managed for. They 
deteriorate. That is what we now need to shift into after we 
have done some construction and be sure that we protect not 
only the government's interest, but also the families' interest 
in those particular projects.
    Here's a quick identification of some growing problems. We 
don't want to have a monopoly as we go out in the street with 
these privatization projects. We are watching to be sure that 
we get a proper mix of small and larger companies. We just 
don't want X, Y, Z development company to eat up 90 percent of 
all of the privatization projects that are on the street. We 
are working closely with OMB. OMB has given us favorable 
scoring. We need to assure we have favorable scoring in our 
projects.
    We need to get better coordination in-house for the people 
that help us work on housing allowances and with our 
privatization of MILCON projects. It is a bit divorced within 
OSD. We hope to bring that closer together, but certainly we 
have some concerns about the rapidity to which the housing 
allowance system can respond to changing market conditions or 
utility spikes or some concerns about how they do the mark-to-
market analysis, and we are working with the services on a very 
important issue to get some consistency in the housing 
requirements determination process because we should not keep 
more than we really need to keep and devote--spread MILCON in 
peanut butter spread across all houses. We should focus on 
those houses we really need to keep and devote our MILCON more 
cost effectively.
    So I am encouraged. We have a long way to go. The strategy, 
I think, is going to be very important to us fulfilling our 
promise to you. Thank you, Mr. Chairman.
    Mr. Hobson. Thank you, Mr. Yim.
    [The prepared statement of Randall A. Yim follows:]
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    Mr. Hobson. Now we will go to Paul Johnson of the Army.

Opening Statement of Paul W. Johnson, Deputy Assistant Secretary of the 
                    Army (Installations and Housing)

    Mr. Johnson. Mr. Chairman and members of the committee, I 
am pleased to appear before you to discuss family housing 
privatization. I have provided a detailed written statement for 
the record, but I would like to speak briefly about several 
important aspects of our program.
    We know that some of our housing privatization pilot 
projects have been taking a long time to show results, but it 
is similar to other new programs or ideas, we have faced 
numerous challenges in developing and executing the program. 
For each pilot project we are expending extra time and effort 
to review and analyze details, educate all the chief 
stakeholders, and document valuable lessons learned to ensure 
the process is streamlined for future projects.
    Residential Communities Initiative (RCI) projects are very 
complex, with each one providing quality Army housing and 
residential communities that are sustainable over time. Rather 
than looking at thousands of individual assets, we are 
approaching it by managing a portfolio, taking a whole Army 
installation and provide one manager, so we don't have variable 
standards on the installation. Frankly, at Fort Hood, there are 
250 different types of existing housing that will have to be 
looked at. We know if we put it all into one overall project, 
it is a community asset.
    To facilitate the planning of such complex projects, the 
Army is utilizing a competitive procurement approach called the 
Request for Qualifications (RFQ) process. The RFQ, as you know, 
it was a very competitive process. We go out, we place the 
proposal on the street and, we pick the best qualified. We have 
had some real good success with that. Competition on Fort Hood, 
Lewis and Meade brought eight, nine and 17 respondents to our 
solicitation. The majority of these have more than met the 
minimum requirements. So there is great competition.
    Also, after we choose the builder the competition continues 
because the builders will go out and go through this process in 
subcontracting work. It is important that he do that because it 
will be cheaper, and the cheaper he gets it the more in the 
black the project will be.
    In an effort to maximize the program benefits and ensure 
the Army receives the best deals, we have teamed with private 
consultants who are a major component of the RCI program. As 
you know, we do not have in the Army enough talent to go into 
financial deals.
    You have mentioned a couple of times that we have spent a 
lot of money on consultants. Actually in 2000 and 2001, we have 
spent $24.9 million. I would like to break that down a little 
to show you just where that went. $5.5 million went to the 
Corps of Engineers to fund environmental National Environmental 
Policy Act (NEPA) studies that are required by law, historical 
property surveys, real estate surveys, and procurement 
processes. Those sort of things have to be done. $3.9 million 
went to headquarters of RCI and Major Army Commands (MACOMs) to 
fund working in headquarters, the travel and per diem and 
computer equipment and salaries. And $15.5 million went to 
consultant contracts.
    They do financial modeling and analysis, real estate 
negotiation, due diligence review, drafting of term documents, 
transition support, assistance to OSD, OMB and knowledge 
management and lessons learned. So that is what we used those 
dollars for.
    The Army is very enthusiastic about the positive momentum 
that we are gaining in the RCI program.
    Mr. Hobson. But Fort Carson is not RCI.
    Mr. Johnson. It is the same authority.
    Mr. Hobson. But it is not RCI.
    Mr. Johnson. It is the same authority given to us. At Fort 
Carson, construction is well underway. Right now we are 
constructing 20 new houses a month and renovating 40 new houses 
a month. Shortly after we awarded the contract, there were 200 
houses that were down for maintenance. In one month we had them 
back on. So it is a very successful program.
    Mr. Hobson. Carson was bid a different way than RCI. Fort 
Carson was bid under the old way. RCI is a different way of 
bidding and there are significant differences in that.
    There was a time--the reason I do that is there was a time 
when nobody wanted to claim responsibility for Fort Carson and 
it got turned around and it has worked very well. So now 
everybody wants to claim it.
    Mr. Johnson. The Fort Hood project is a good deal for the 
Army and provides for the renovation or replacement and 
operations and maintenance of the existing 5,622 homes over 50 
years. In addition, we are going to build an additional 290 new 
homes.
    Mr. Hobson. That is up from the initial proposal.
    Mr. Johnson. Yes, but a total of 5,622, and the development 
partner is going to commit $260 million to plan, design and 
construct, and this will include construction of almost 1,000 
new or replacement units and renovation of over 4,600 units. We 
know that we have to keep the MILCON programs because that 
supports some of our installations. We can't privatize. We know 
that. So we are going to increase the program.
    Mr. Hobson. You are going to? So I can expect to see in the 
requests for MILCON housing in the Army's budget?
    Mr. Johnson. We will have money in our budget for that.
    We thank this committee for the tremendous help and ask for 
your continued support to the Army in helping provide housing. 
Thank you.
    [The prepared statement of Paul W. Johnson follows:]
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    Mr. Hobson. Thank you very much.
    Mr. Holaday.

                      Statement of Duncan Holaday

    Mr. Holaday. Good morning, Mr. Chairman, members of the 
committee, Mr. Olver. I appreciate the opportunity to appear 
before the committee and discuss our housing privatization 
program.
    I am pleased with the Department of the Navy's progress in 
improving family housing for our marines and sailors. By using 
a combination of improved housing allowances, traditional 
military construction, and the privatization authorities, both 
the Navy and Marine Corps remain on course to eliminate all of 
our substandard housing by 2010. We appreciate the advice and 
assistance we have received from the committee that is helping 
us to achieve our goals.
    Since I last appeared before the committee, the Department 
has awarded three housing privatization projects, involving 
1,150 homes, at Marine Corps Base Camp Pendleton; Naval Air 
Station, Kingsville, Texas; and Naval Station, Everett, 
Washington. These three projects will renovate or replace over 
500 existing homes and construct over 600 new homes for 
sailors, marines and their families. The housing privatization 
authorities have allowed us to leverage $43 million of Navy 
family housing funds to stimulate private sector investment of 
over $140 million in housing for our families. Said another 
way, the privatization authorities will allow us to house 720 
more Marine and Navy families that would have been possible 
using normal military construction funding.
    Construction is already underway at each of these 
locations. Families will begin moving in this summer at Camp 
Pendleton and this fall at Kingsville and Everett.
    In addition, we expect to award another four Navy and 
Marine Corps projects later this fiscal year at San Diego, New 
Orleans, south Texas and a project that involves Marine Corps 
installations at Albany, Georgia, and Camp Lejeune, North 
Carolina. These four projects include the construction or 
replacement of over 2,200 homes and the renovation of an 
additional 1,800 existing units.
    There will be other opportunities for privatization beyond 
those that I have identified. We fully evaluate privatization 
opportunities at each of our Navy and Marine Corps 
installations to ensure that we are making the best use of our 
scarce resources to provide the family housing our marines and 
sailors need.
    The objective of privatization is to produce quality 
housing for Navy and Marine Corps families much sooner than 
would otherwise be possible if we were to solely rely on 
military construction. We have carefully crafted an approach 
that, with the help of this committee, meets this objective 
while safeguards the government's and the taxpayer's interests.
    While we continue to make good progress in providing better 
housing for Navy and Marine Corps families, we are not doing as 
well for our single sailors and marines. This is a particular 
problem in the Navy where over 25,000 sailors must live aboard 
ship, not only when they are deployed at sea but also while 
they are in home port.
    When deployed at sea, all sailors must endure bunk beds, 
sharing cramped living spaces with dozens of their shipmates 
and living out of a small locker. When the ship returns to home 
port, their peers who are married or assigned to aviation 
squadrons or submarines get housing ashore, as do all sailors 
who are assigned to shore duty. Because we have too few BEQs, 
these 25,000 shipboard E-1 through E-4 sailors, however, are 
now required to continue living in those cramped quarters 
aboard ship.
    The Navy's home port ashore program, designed to provide 
housing ashore for these sailors, is still in its infancy, and 
we are not making the progress I had hoped when I brought it to 
your attention last year.
    This shortfall in inadequate housing for our single sailors 
makes it even more important that we wisely use our limited 
housing funds, taking every opportunity to use the family 
housing privatization authorities to leverage our scarce 
resource.
    It has been a pleasure working with the committee to 
improve living conditions for our marines and sailors. Whenever 
we ask, they perform their duties admirably, in often difficult 
and dangerous conditions. Ensuring that they and their families 
have adequate quality housing when at home is one of our most 
rewarding tasks.
    Mr. Chairman, that concludes my statement. I look forward 
to answering any questions that this committee may have.
    [The prepared statement of Duncan Holaday follows:]
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    Mr. Hobson. One thing we need to look at, there are people 
who are building military housing for colleges and 
universities, and we ought to look at that as a proposal in 
this particular situation, see if that doesn't help leverage in 
that housing, also. Yes, sir.

                       Statement of Jimmy Dishner

    Mr. Dishner. Good morning, Mr. Chairman and members of the 
committee. I appreciate the opportunity to talk with you about 
our Air Force efforts and military family housing privatization 
modernization program.
    We are very happy of the Air Force and the efforts that we 
made in housing privatization last year, Mr. Chairman. I might 
add to your opening comment that we in the Air Force are also 
pleased that the Deputy Under Secretary is still available, as 
shown with him and his staff, the continuity that is there that 
supports all of us. So we are very happy that he is in his 
position.
    We are very happy of your follow-on with the trip that you 
will be making down to Texas, that you will be able to get down 
not only to Brooks but also over to Lackland to see some of the 
housing that is shown on the second board over there.
    Mr. Hobson. Even though they destroyed my barracks.
    Mr. Dishner. Except they destroyed your barracks, yes, sir. 
We are very happy that the President, as you know, made a 
statement on February 12th supporting housing to the tune of 
$400 million when he was visiting Fort Stewart. 30 days later, 
to be exact, on March 12th, he also visited Tyndall and said 
the same thing in support of housing for our men and women in 
not only the Air Force, but the three services.
    The extension of the housing privatization which was done 
last year to get us to 2004, leading us to eventually possible 
permanent legislation, is helping us to meet the requirements 
of the family housing plan which we have laid out in accordance 
with the Office of the Secretary of Defense OSD to meet their 
2010 road. We are not at 2010 today. We are at 2013 and we 
continue to look at the balancing between the three areas and 
make sure we can get to that 2010 as agreed to and asked for by 
OSD.
    I discussed the status last year of the project at Lackland 
Air Force Base. By June of this year, possibly August 1st, all 
the 420 units will have been constructed. We have gone through 
since they were begun in 1998 when I signed the first contract 
in August, I believe, that we have had one to two turnovers. 
That is significant because as the people live in there and 
they change and the developer comes back in and does repairs or 
painting, et cetera, it gives us a chance to evaluate how he is 
doing or how they are doing, the company that owns the property 
in that venue.
    So we also do interviews with the people as they move out, 
asking them what they thought of the unit, et cetera, and also 
to check to see how they are leaving the unit to go back in. To 
me that is going to be a critical part of this, as we finish up 
and build new houses, how are our people taking care of those 
houses when they rotate and how responsive is the developer is 
who owns and operates and maintains them.
    I have also, since last year, signed contracts at Robins 
and at Dyess, and as you know, on March 15th, signed the 
contract for Elmendorf for 828 units. We go up there on April 
1st to put a pick in the ice or the snow and pick that off for 
construction.
    One thing that I added up to give us all a sense for the 
savings of housing privatization of why we think, all of us, I 
think, would agree with this, but I took the four projects that 
I just mentioned to you, and through privatization, the scored 
cost was approximately 58 million. To build those units, which 
totaled a 2272, 2272 units, we would have required $288 million 
worth of MILCON. That is a savings of 229 million. You get them 
cheaper, not the product itself, but you get a saving of the 
taxpayer, and you get them faster. That says a lot for the 
program.
    Mr. Hobson. I think you get a community standard project.
    Mr. Dishner. And you get a community standard project, yes, 
sir.
    We are looking at five follow-on projects at Goodfellow 
down in Texas. Goodfellow is unique because it is the first 
project that we will have, at least in the Air Force where we 
marry up with the old 801 policy, which the 1986 law, as you 
know, precluded that, from building any more of those because 
they have to be scored, you have to sign 20-year leases. So 
that would join up about 258 units with 96 on base at 
Goodfellow, and for the Air Force this will be our first 
contract with the community, the local community there to do 
that which the law last year allowed us to do. Follow that by 
Patrick, Kirtland and Dover and Wright-Patterson projects.
    One of the equivalent savings that I mentioned to you in 
the projects, Wright-Patterson, the solicitation, we have 
already sent that over to you, as you know, sir, and by April 
30th, which will be the completion of the 60-day notification 
period, we will be able to proceed with that one project, which 
is the last one of the group that we are looking at in the five 
test cases, followed on by the four I just mentioned.
    The average leverage is very important to you as it is to 
us. The four projects that we have so far are looking--are 
averaging out to about 8.1 or almost 9 to 1. So every tax 
dollar we put into these things we are getting another eight 
from the private sector, which is just great, and I am sure 
that is applicable in both the Navy and the Army.
    We continue to program our worst housing first. We want to 
repair those. We are working against that 65,000 units that we 
mentioned to you a few years back. We are down now closer to 
59,000, subtracting the 2320 that I mentioned earlier. We are 
very happy to continue, as Mr. Johnson mentioned, on the three-
pronged approach also, the Air Force, to balance that the way 
we are doing it.
    So we are very happy with the program. We also would like 
to move faster and we think we are doing some smart things 
today that allow us in this coming year to do that.
    That completes my remarks, Mr. Chairman. I stand ready to 
answer any questions you may have.
    [The prepared statement of Jimmy Dishner follows:]
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    Mr. Hobson. Thank you, all of you, for coming today and 
thank you for the hard work you have done. Let me say a couple 
of things, and then I will ask one question and John will ask a 
question and we will do a round. First of all, I want to thank 
all of you. I know this hasn't been easy.
    My goal has been to get some of the things in the ground, 
get them up and figure out what works and what doesn't work so 
that this thing can move forward in a larger fashion, but when 
we move forward hopefully--we are going to make some mistakes 
along the road. That is just part of the deal, but I am hoping 
we can minimize them, and we know we have enough tools, that we 
have done enough that we can now make this thing grow because 
if we made mistakes early, people would kill privatization.
    There are a lot of people who didn't want to do this in the 
beginning in the services and outside the services. I think if 
we get some good product out there, which I understand we are, 
and I think we get some good knowledge base and I think we are 
all more knowledgeable about the process and what the pitfalls 
are. I think our underwriting is far better than when we first 
all started talking about these 7 years ago. The underwriting 
of the deals is much better and we are going to get there.
    I am not as concerned about lagging behind because I think 
once we know where we are going on these, once we have our 
documentation down, we can move forward a lot better than we 
have done to date, but part of this is a learning process by 
everybody.
    We have a chairman in the authorizing committee that has a 
real estate background and very interested in this also and 
shares many of the concerns, and the staff over there does too. 
I think the Senate, we have a better working relationship with 
the Senate on where we are going on these too. So I think 
everything is working well now.

                         THREE-PRONGED APPROACH

    I want to ask one question. The military housing needs can 
be addressed through the use of several tools including 
reliance on civilian housing, enhance housing of parole 
services, adequate housing allowances, military construction 
and now privatization. How do each of you ensure that these 
tools are used in the appropriate combination to optimally 
address the housing needs we have? Do you have any process that 
you go through when you look at things or you look at the 
services overall?
    Mr. Dishner. The way the Air Force does it, since it is 
time sensitive, each one of those methods of providing quality 
housing are time strained, as I am sure you know, Mr. Chairman. 
Obviously, having housing available downtown, then the 
immediate thing would be work through the Basic Allowance for 
Housing (BAH) process or leasing those houses. That would be 
immediate, that we would just give the person the moneys to go 
downtown and take advantage of that. Where we don't have that 
availability but we have time to do it, then you look to the 
next most immediate way to do it, of course, would be by 
privatization, either privatization or MILCON, MILCON taking 
the longest.
    Mr. Hobson. You guys do this or does the base do this?
    Mr. Dishner. In the Air Force the base does it, and then it 
is reviewed at Major Command and we take another gander at it 
when it comes through the building.
    Mr. Hobson. Do you look at it?
    Mr. Yim. Yes. That is one of the things that is our 
responsibility is to look at that option, and what we are 
really saying to them is each one of the things costs the 
service something. A BAH increase, a housing allowance is not 
free to the service. Sticking equity on the table is not free 
to the service. MILCON certainly isn't free to the service. So 
what we are asking them to do is through opportunity cost 
analysis, if you did this cash with this mix, how many houses 
are you going to get, how soon are they going to be renovated, 
was there an opportunity cost going down that particular path 
if you had done this other thing? Give me a comparison. Let me 
know how many houses you would have done under alternative B as 
opposed to the one you have chosen. That is what we are working 
with the services on is to do that type of investment analysis.
    Mr. Hobson. I call that underwriting because that is part 
of the underwriting. Anybody else want--you don't have to 
comment. If you want to you can.
    Mr. Holaday. Just, can I break it into two pieces, sort of, 
as Mr. Dishner did? Since we rely primarily on the private 
sector to meet our housing needs, and in the Department of the 
Navy, we have more people living in the private sector than 
either the Army or the Air Force, the BAH is probably the most 
important thing to us because that is what takes care of 
between 75 and 80 percent of our mandate is the housing 
problems, and we put a big emphasis as a result on how to 
resolve that at the local level, that is handled locally.
    We have a number of programs we have established over the 
years that have helped sailors and marines find adequate 
housing in the community, to help ensure that they are living 
in good neighborhoods with good schools and are properly 
housed. So that is our first local level line of attack on 
making sure that our people are properly housed.
    When we look at what our deficits are or what our 
requirements are to fix up our own housing, the housing we have 
on base, then we get into the tradeoff between using military 
construction or the privatization tools, and what we need--what 
we do is compare the cost and benefits. It is sort of, as 
Randall suggested, what are the cost benefits of using public 
private ventures compared to what is used in military 
construction, again with a thought to make sure that whenever 
it is feasible, we use public private ventures because it is 
cheaper and quicker and we can get more faster for our people.
    Military construction we use in those cases where military 
construction provides a product at a cheaper cost level than 
public private ventures. Those analyses are generally done at 
headquarters.
    Mr. Johnson. There is a marketing analysis to check out all 
of the facilities to see how much you can repair, how much you 
can replace and then we go into how we are going to address 
that, whether we go to privatization or whether we go MILCON.
    Mr. Hobson. John.

                             HOUSING GOALS

    Mr. Olver. Thank you, Mr. Chairman. Randall, may I just ask 
you, the chart that you gave, is that intended for family 
housing alone or does that include singles?
    Mr. Yim. It does include--that is primarily family housing 
there.
    Mr. Olver. That chart is family housing?
    [The information follows:]
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    Mr. Yim. That is family housing. However, it does apply 
also--the three-pronged approach does apply to singles, also.
    Mr. Olver. I don't think we have focused upon the 
additional privatization approach for the singles yet. That is 
my impression, however, I wanted to clarify because I wanted to 
speak on that chart a little bit here. Looking at that chart we 
have just under 300,000 of family housing units. If you break 
that down, and let me put the Navy and the Marines together 
because the testimony on the part of Mr. Holaday has indicated 
that by the year 2010, the Navy believes that it will be able 
to meet that goal. If you look at those two putting the Navy 
and Marines together, you will find that there is just about 40 
still in the red zone there, in the inadequate zone. On the 
other hand, in the case of the Air Force, 60 percent is in the 
red zone, and about 70 percent in the case of the Army.
    I know that, Mr. Johnson, you have indicated that you 
recognize you are running late, and in fact, Mr. Dishner, I 
guess you have said now that you basically think 2013 is the 
date. So, okay, they are somewhat behind. However, since we are 
occupying at the moment only very few privatized units that are 
out there. Reading through your testimony, I think I find there 
are about 5,000 that are awarded, some are already being 
occupied, and there are about 20,000 that are in solicitation 
in that intermediate stage, and then 27,000 or thereabouts from 
your charts and your testimony that are in planning. The sum 
total of that is about 50,000, almost none of which is 
presently occupied. So some of those, I can't tell which are 
done and how much--which ones are in phasing of being done.
    That 50,000--the total inadequate on family housing for all 
of the services together are about 170,000. So we still depend 
a great deal on people being on the market and people being in 
traditional MILCON and a continuation of a strong program, 
going along in this three-prong approach of traditional MILCON 
coming forward, and we are going to meet those goals by the 
year 2010.
    I don't know how much more you can privatize, given how 
long it has taken to make some of these projects go. I don't 
know how much of this 20,000 in solicitation and 27-or-so 
thousand which are in planning can actually be brought to 
completion by the year 2010. Maybe--how many of those would you 
think can be brought to completion, those that are started in 
planning and those that are in solicitation.
    Mr. Yim. I am hoping that we can be able to do something on 
the order of about 30,000 a year. That is very ambitious. I 
don't think we are going to get there. That would be great. 
That would be like four or five good projects at one time, and 
that is probably not possible in a privatization, but we should 
be touching those types of houses each year, if we could, 
touching it either through privatization or MILCON to renovate 
or getting people out into the private sector. So when I say 
30,000, 35, we are not talking about us privatizing 30,000 
units a year but getting people--improving the condition of 
30,000 living units a year would be roughly on the base, that 
means getting people out of substandard homes, MILCON housing, 
getting them in the private sector, counting that number of 
people in the private sector because of the BAH increase, 
renovating houses, taking it out of being inadequate, 
particularly overseas because of MILCON projects. We don't have 
privatization overseas. Doing build-to-lease projects overseas, 
getting them out of inadequate stuff, getting them into build 
to lease stuff in an interim fix overseas.
    So roughly the pace that we analyze is giving 30,000 
units----
    Mr. Olver. Well, 30,000 units per year, first of all, does 
that include the O&M, whatever's done on the O&M budget as well 
as what you have done here with what the O&M budget might 
accomplish or renovation?
    Mr. Yim. I think I am misleading you. It is not 30,000 new 
construction or new privatization, because we could never 
sustain a pace like that. What I am talking about is getting 
people out of existing bad units at the rate of about 30,000 a 
year, 30 to 35,000 a year.
    Mr. Olver. Well, 30,000 a year could save 170,000 
inadequate family housing projects. Maybe your 30,000 is now 
referring to singles and family housing, but 30,000-a-year 
reply to the family housing would get us there in 6 years. 
There isn't anybody who is suggesting we are going to getthere 
in 6 years. I think the Navy thinks they can beat 2010, and we are 
talking about considerably farther, 13 by the Air Force and probably 15 
or 16 because the Army situation is worse. So it can't be as much as 
30,000 a year.
    Mr. Yim. It is not that much in terms of--we think that the 
housing allowance should have the--increase in housing 
allowance should have a significant impact in giving people 
more options off base that would reduce the pressure either on 
government-owned MILCON projects or privatization projects. 
Just by simply increasing the housing allowances alone, and 
again, that is based in 2005, we can solve a lot of our housing 
problems. So I think we are--I confused you. I am talking 
apples and oranges a little bit.
    Mr. Olver. I am, too. I am probably taking that back to 
you.
    Mr. Yim. You are interpreting me to say we need 30,000 new 
units that we have built ourselves or privatized ourselves. 
That is not what I meant to imply. I meant to imply we need to 
take care on that pace, either through getting people out into 
the private sector, which I think is a good chunk of that, 
renovating stuff, not necessarily building new, renovating, 
touching units to remove some of the major indices of why they 
are inadequate, particularly overseas, dealing with the guys, 
getting them off ships, getting them into two-plus-two barrack 
situations or something like that.

                      Basic Allowance for Housing

    Mr. Olver. Okay. When we started this 3 or 4 years ago 
basically, this is roughly when I came on this committee, or a 
little bit after that, the problem was that the amount of money 
we had for traditional MILCON was going down and was clear that 
we had a substantial need. Clearly the inadequacy of the total 
mix of housing substantiates that. The argument was that at 
that time, we had only two problems. One was you would be off 
base or you would be on base in military traditional housing. 
So the privatization gave us a third leg on the stools. Stools 
are much more stable with three legs. It is a good idea and in 
principle. But in large part, the argument was--the timing of 
construction would be better, the cost of construction would be 
substantially less. But I think the argument was, with the BAH 
what it was, we couldn't go out on the market in most areas 
because you couldn't get adequate housing for the value of the 
BAH, and people were having to be put in a substantial amount 
of money over and above whatever the BAH was. So we really 
don't want our people to be living, or we shouldn't want our 
people to be living in inadequate housing.
    So the privatization comes in. Then we discover that in 
fact, it was difficult to make these privatization go in part 
because the BAH was not adequate as it was to make the 
privatization, but now we have upped the BAH. The BAH is now 
much higher. It allows people to go out on the market and get a 
substantially better housing property by themselves. I don't 
know what that mix comes out to, but the total--what I am 
wondering here is whether we really are in a position because 
now the BAH has been upped and that makes the privatizations 
go, but it also makes the off base private individual choices 
go as well. I am wondering whether there are--if you look at 
the whole, what you might call the life cost to the country of 
this program, whether the advantages we are seeing out of 
necessity with the low BAH and the low appropriations for the 
traditional MILCON are as significant as they seem--as they 
must be back 3 or 4 years ago.
    Has anybody begun to look at what the balance sheet of life 
cycle costing now that we are going to be at full payment with 
the BAHs having gone up 15 percent and being eliminated over 
the next couple of years? Whether that mix should be driving us 
toward this very swift kind of effort of privatization? Your 
numbers are driving us pretty quickly, even though at the 
moment only one out of six of all our family housing units is 
somehow planned for privatization, either in award, 
solicitation or in planning.
    Mr. Hobson. There is another thing in there. And that is, 
what if there's another base closure round. You guys have got 
to be careful on your 50 leases where we don't want to end up a 
situation--that is why I don't like the leasing. I don't like 
those closure hearing deals that are in there.
    Mr. Olver. I am thinking that----
    Mr. Hobson. There is another equation that has to go into 
the overall as you do your calculations on the life cycle.
    Mr. Olver. With the change in the BAH, the calculation must 
have changed somewhat here in this combination of factors that 
drives this in one direction or another.
    Mr. Yim. We specifically looked at the change in the BAH. 
So let me give you some numbers based on some preliminary 
screening based on the 2005 situation where we are at zero out-
of-pocket costs. So we have already modelled the full impacts 
of the increase in the BAH to bring out of pocket to zero. It 
is still with that increased cost in paying the housing 
allowance, it is still cheaper for us to have people live in 
nongovernment-owned housing than it is government-owned housing 
for a couple of reasons, and it is roughly--we modelled it at 
least about $450 per unit, per family, per family unit, cheaper 
to have them in private sector housing.
    Mr. Olver. Per month? Per year?
    Mr. Yim. Per year annual cost. The key factors are we have 
to increase the housing allowance to bring it to out ofpocket 
expense. That is a big bill. We also pay a school impact aid that is a 
lessor amount. So there is an impact to the schools that we keep 
people--put people in the private sector. In theory, the property taxes 
if you are owning your own homes or renting your own home is paying the 
school. So we pay a lessor impact. So those are the two major factors 
in what we modelled our costs in to people being in the private sector.
    Mr. Olver. Was that privatized housing, was that the 
modeling--you privatized the goods, we had very little or was 
that off base private?
    Mr. Yim. It could be either.
    Mr. Olver. Private sector?
    Mr. Yim. It is private sector housing either on base or off 
base, private sector housing, nongovernment owned housing. That 
worked out to be under our figures, about $11,600 a year per 
family, if they are living in the private sector. If they are 
living in government-owned housing typically on base, then we 
had a MILCON bill for that for renovation, modernization type 
of thing. We have an O&M bill to keep those things up, and then 
we have a higher school impact aid because, again, we are 
living on government-owned property, there are no property 
taxes. We pay the higher level of school impact aid for the 
education. That worked out to be over 12,000, about 12,100 per 
family to house people in-house, and let me also point out that 
is a conservative number because we know we are not spending 
enough MILCON or O&M on these projects.
    So that 12,000 wasn't really the cost of government-owned 
housing because we won't have inadequate housing if we were 
spending enough money. So there is at least, at least a $450 
differential. Even with the new model increases in the BAH, it 
is better for us to have people live in the private sector, but 
this is not a cost issue.
    The demographics have changed. The RAND study of 2 years 
ago indicated that most people with a changing demographics in 
our military would prefer to live off post if they could afford 
to do that; two spouses now working in a family, greater 
integration of the military into the local community. Used to 
be when we first built houses we were in isolated areas. Now 
most of our bases have developed housing very close by with an 
easy commute. So it is not just because of the cost savings.
    The demographics are driving us toward that and I think 
that that is clearly the way of the future. We are just not 
doing enough by increasing the pay. We shouldn't shut down the 
programs. We still need to drive better private sector deals.
    Mr. Olver. Have I missed a document that shows all of this? 
At least the executive summary of it, or was it that it just 
came and it was so thick that I was intimidated by it?
    Mr. Yim. It probably came and was so thick, but I have 
rollups of the numbers because I anticipated this question 
might arise, and we did specifically model it not only just for 
this hearing, but I mean that is how we managed the thing, we 
have a model where it was a smart investment for us to push for 
investments in the BAH.
    Mr. Hobson. We are going to go to Mr. Farr, Mr. Vitter, Mr. 
Edwards, Mr. Boyd, the way people arrived.

                        Housing Market Analysis

    Mr. Farr. Thank you, Mr. Chairman. I love coming to this 
hearing although I am missing another approp hearing to be 
here. I have learned in Washington that the politicians in this 
town change, but the basic tenor of government never changes. 
What is so exciting is that change is in the air and this 
committee is part of that change. I really want to thank Mr. 
Yim for coming here.
    What we are learning is that we have got to break this 
down. It is interesting how we all like to say all politics is 
local. What we have learned is it is all housing development is 
local. The land is different. The climate is different. The 
building codes are different and so on, and I like the fact 
that we are beginning to understand that and put that into our 
lessons, but what I don't see is change in the bureaucracy in 
Washington. I have a couple of questions.
    One is a fundamental question of how much the HMAs, the 
housing marketing analysis, influence the decision to privatize 
or not to privatize?
    Mr. Yim. The housing market analysis is a very important 
part of determining the requirements and whether the private 
sector existing marketplace could fulfill the requirements or 
not, or whether we need to construct our own houses. It is 
extremely important.
    Mr. Farr. So it is fundamental and I understand it is 
flawed in the way--I mean you don't combine the BAH. It is 
essentially trying to figure out what the rent structures are 
out there, and the housing allowance is trying to figure out 
what the vacancy rate is.
    Mr. Yim. There definitely needs to be better 
synchronization in how we determine the BAH rates. The market 
analysis is fundamental to that. One of the problems is it 
doesn't accurately factor the availability factor. So it may be 
a good survey and say that a two-bedroom rents for $1,500 a 
month, but it doesn't model well enough that there may be only 
10 of those on the marketplace where it is an extremely, hot 
competitive market, and our guys aren't goingto be able to get 
that particular unit at $1,500 a month.
    We have raised that issue with them and we are looking at 
ways to perhaps factor in better the availability or the lack 
of availability or the competitive nature of the marketplace 
that we are looking at. It also doesn't model a good--it 
doesn't capture spikes as well we wish it would, spikes in 
utility costs or Silicon Valley that you are familiar with, 
spikes in housing markets because of dot coms, et cetera.
    Mr. Hobson. It is one of the reasons we had to go back to 
the Secretary and change some things after the change in the 
BAH because the study was flawed, and to their credit, they 
recognized it pretty fast and changed it, but it shows the 
underlying was wrong.

                          Housing Requirements

    Mr. Farr. Following up sort of the discussion with Mr. 
Olver, you indicate in your testimony that there are 180,000 
substandard units in the United States, that if we just 
continue business as usual, just to get around to rehabing 
those or replacing those will take about 30 years and about $16 
billion. We can't wait that long. And we don't need to spend 
that much money. If you are building within a vibrant 
community, if you are not an isolated base, there is obviously 
big demand for privatization. There is good opportunity for 
privatization both on base and off base. Is there a way of 
dividing up those 180,000 units so we can begin seeing where we 
can go geographically on privatization and get it done a lot 
faster?
    I mean I don't really need an answer to that. I hope you 
will start categorizing those 180,000 units which are the 
tools--and there are a lot of tools in the tool box, how these 
tools in the tool box can work better together. I understand 
there is a lot of overlapping, and different services have 
different ways of going about it within the Defense Departments 
that are responsible for different parts of information. How 
can we bring these housing needs and requirements and tools 
available to the private sector out there to utilize them more?

                              OMB Scoring

    Let me just finish with this, about scoring. Scoring, 
really bothers me. Scoring, we never did that when I was in 
county government or State government. It is interesting, we 
always had balanced budgets. Here in MILCON if we are going to 
build an apartment unit and lease it, say we are going to build 
to lease, if it rents a dollar a year and we build 10 units, 
that is going to be $10 a year, but we have got to score that 
thing for 10, 20, 30 years. It goes up the first year. It 
doesn't make any sense at all. No wonder we can't get any money 
to build these units because we can't appropriate that much 
money the first year.
    And when anybody asks me, I ask if they score all of these 
military bases that closed; if so, we must have jillions of 
dollars out there in savings just in OMB alone. Could you 
respond to some of my----
    Mr. Yim. Let me respond to the scoring a bit. I think we 
have received favorable scoring from OMB. One of the things 
that we needed to keep working on now with them is the deals 
are not just structured as purely debt financing deals. They 
are depending a lot, as they are in Fort Hood, on the net 
operating income over a period of time to generate revenue, and 
then if you put in a reserve and fund the basics of a new 
construction project or management project that is perhaps one 
of the big differences in Hood compared to a smaller Air Force 
project, for example. They have a 6,000 unit project there that 
is going to be taking several phases a long period of time, and 
if they simply borrowed the money up front, the debt service 
probably would have killed the project in some of the later 
phases.
    So instead, very innovative approach, they are looking at 
capturing net operating income from some of the earlier phases 
to key the project later, but we need to have OMB recognize 
that it is not just a 5-year construction project, that this is 
a 50-year management project, and when we do other than debt 
financing or traditional financing, that there would be 
favorable scoring for these innovative ways. If we can assure 
that the money is being plowed back into the project and it is 
not being sucked off for development profit for example, that 
if the money is put in a lock box and actually being reinvested 
and the innovation is leading to a greater number of houses or 
a quick return on it, that is what we are convincing OMB on 
Fort Hood, for example, and that is where I think we would need 
some help in ensuring that the different tools that are being 
brought to bear by the services and privatization because they 
are being used differently, they are used over a longer period 
of time, it is not as familiar perhaps as other projects, 
facilities built that OMB is typically looking at and MILCON 
projects. It is different. This is a management project as well 
as a construction project, that we receive that favorable 
score.
    The other aspects of turning stuff quicker, there is a 
balance between getting the worst first stuff and the areas 
that have the most robust housing privatization market and that 
is difficult because it is sometimes you just go and bite the 
bullet and take the ones that may be not the most economically 
viable projects because the guys are living in just crummy 
conditions and can't stand it. So that is kind of the mix we 
are having.
    Mr. Farr. Mr. Johnson said something about the 
Army'sapproaches to repair and replace the MILCON projects first and 
then go to privatization. Did I hear you correctly on that?
    Mr. Johnson. We look at them to see what conditions they 
are and look to see which is the most economically viable.
    Mr. Hobson. Any of you guys want to comment on anything he 
said here?
    Mr. Dishner. I just made a note here, it is the Federal 
Credit Reform Act of 1990 that directs the scoring rules. Of 
course, OMB, as we all, know has policies, et cetera. That is 
why we do get, not hard and fast return from them, but we get 
some flexibility from OMB scoring, but the scoring rules 
themselves are in that 1990 Act, very specific, by the way, but 
OMB tries to work within that, Congressman.
    Mr. Farr. I think we, Congress, tried to waive that several 
years ago.
    Mr. Dishner. Yes, sir, it did.
    Mr. Farr. And it passed?
    Mr. Dishner. Yes.
    Mr. Hobson. I talked to the chairman of the authorizing 
committee about scoring, and he has the same concerns I think 
many of us do about scoring, and my feeling is, Sam, and I 
think you would agree that, I think OMB is being a little more 
understanding about our things, but we should not allow scoring 
to drive us to do a dumb deal, and we will have to--and I think 
that is the point that you are trying to get.
    Mr. Farr. Yeah.
    Mr. Hobson. And if you see that happening, what we are 
saying here is you need to come back and talk to us, let us try 
to carry some of that fight. We don't want to do a dumb real 
estate transaction that we would never do in the private sector 
simply because of scoring. I can't justify that to the 
taxpayers, but there is a reason for the scoring. It was to 
show what the costs of something, so they couldn't hide things 
by doing leases and not showing what the true cost of that 
lease would be over time.
    So there is a purpose here because one of the ways you can 
hide costs is by doing a 50-year lease with escalators in it 
and nobody really looks at what that is going to cost, and then 
you go, we should have bought that thing, should have bought it 
for 20 percent of what it cost us.
    So that is part of what is in this, but sometimes we go 
to--people get in charge of these things and suddenly they wind 
up making us do things we wouldn't normally do. I think that is 
the point we are trying to get here.

                          Housing Requirements

    Mr. Farr. One other point on this. On the auditing process, 
my understanding is that there are different auditing agencies. 
The General Accounting Office and the Congressional Budget 
Office conducted reviews of the defense Department's housing 
requirements. A determination of the process, in determining 
that there was a significant problem, specifically the services 
used different methods. And you might be talking a little bit 
about that. Should we rely first on the private sector? How do 
you resolve their problems between the services and their 
approach to the housing requirements can be better resolved and 
more practically resolved?
    Mr. Yim. First, I think we need a consistent housing 
requirement determination process as applied across all of the 
services. But if we are maintaining houses that we really don't 
need, then we are spending MILCON inefficiently. We are 
spending MILCON and O&M dollars, maintaining stuff that has run 
out its useful life, rely on the private sector, because as I 
said, it is cheaper for us to run our houses for us than it is 
for us to own our houses ourselves, and services do take a 
different approach to this.
    Services are changing now. Some of the services used to 
look to fill up the existing on base housing first, and then 
determine for those people who could not be housed on base, 
whether the private sector could take care of them or not. In 
our view, that is backward.
    Mr. Hobson. You were ordered to live in the housing that 
was on base.
    Mr. Farr. So you are ordered to live in inadequate housing.
    Mr. Hobson. They do it in a nicer way, assigned a facility.
    Mr. Yim. They should do it the other way. They should look 
to the private sector first, see what the private sector is 
able to handle for our people and then look to what needs to be 
fulfilled from government-owned housing. That is in general. 
There is always going to be a need for some government-owned 
housing. So for example, there are some issues that the Army 
and other services want the unit cohesion. A certain number of 
people by grade represent the key essential personnel that need 
to be in housing, certain types of houses that the private 
sector can't supply, like for a junior enlisted with a large 
family, but unless we can come honest with ourselves on what 
our requirements really are, we can't make the proper 
investment decision on whether I should stick my money in BAH 
increases, stick my money in MILCON and maintaining the 
government-owned houses or stick my money in the private 
sector, leveraging with the private sector. That is absolutely 
key.
    GAO has criticized us for that. We have been working with 
them for about a year. There are some difficult issues working 
with the services and with OSD. We are kind of being the bad 
guys on it. We are not trying to take away an on-base benefit 
for people. What we are saying is we need to make a good 
investment decision with the resources we have.
    Mr. Hobson. I need to go to Dave.

                                Leverage

    Mr. Vitter. Thank you, Mr. Chairman.
    I thank all of you for your testimony today and for your 
service. I have one general question and then a few specific 
questions about a public-private venture in the New Orleans 
area, part of which I represent.
    Mr. Yim, I guess you would be the best person in terms of 
the general question.
    I am new to the committee and new to the issues, so excuse 
me if some of these are prima questions, but I assume a 
traditional MILCON project, pure government construction, 
doesn't involve in any way a housing allowance in terms of 
paying for it over time.
    Mr. Yim. That is correct.
    Mr. Vitter. So when we are looking at these figures of 
leveraging, like I am just looking at at Fort Carson, Colorado, 
leverage is approximately 22 to 1 compared to military 
construction, that doesn't take into account enormous payments 
over time with regard to the private venture.
    Mr. Yim. Yes. We take care of it in a different way.
    We look at a life cycle cost analysis. So when we look over 
the life cycle of a project, for example, we factor in the cost 
of paying the housing allowance, if we went to the private 
sector. Then compare that to the cost if we don't have to pay 
that allowance or we have a higher military construction bill 
or an O&M bill; and before we will approve a privatization 
project, the life cycle cost has to be in favor of 
privatization.
    Mr. Vitter. But that analysis is the sort of 12 to 11 
bottom line you were describing earlier, certainly not 22 to 1 
or 3 to 1.
    Mr. Yim. That is correct.
    Mr. Olver. So the true economic comparison over all of the 
projects is something like 12 to 11 or whatever you said it 
was.
    Mr. Yim. There is a much smaller amount that it saves us to 
go to the private sector. Privatization ensures that we don't 
budget enough to really fix the housing. We could never budget 
enough MILCON, given all of the other demands for MILCON, to 
devote that $16 billion to housing. It would not be programmed, 
frankly; it would go to weapons or health care or some other 
type of program.
    So this allows us to put what we do have on the table and 
attract private sector capital, something we would not have 
budgeted ourselves.
    Mr. Vitter. I understand that. And don't get me wrong, 
because I am a big fan of this concept, because I think it can 
be used very effectively in a lot of situations, not every 
situation, but a lot.
    I guess my point is, I am just wondering what the validity 
or significance of this sort of leverage figure is. I mean, in 
real-world terms it doesn't mean a whole lot.
    Mr. Yim. Actually I think I would disagree, Congressman. 
What it means is since we don't budget the amount of money it 
would take to fix these houses in terms of construction or O&M 
dollars, it would take us three times as long if we were just 
using military construction funds to go through the inadequate 
houses and renovate them. By putting something on the table to 
then match in four or five or eight times--twelve times in the 
Air Force--we actually are multiplying the resources; we are 
fixing the houses twelve times faster. So it is a significant 
benefit.
    Mr. Vitter. I said in real-world terms. I think you are 
talking about Pentagon/government scoring/et cetera terms.
    Mr. Yim. No. I am sorry, I guess I am not making myself 
clear.
    We actually--it would take us 30 years to do a MILCON 
project. If we leverage it through privatization, we can do 
that same project, same number of units, maybe in 10 years' 
time or 8 years' time or 5 years' time. It is a real-world 
benefit to us to pursue privatization because we just get the 
project done quicker because of the infusion of outside 
capital. It is not just budgetary magic; it is an actual 
benefit to our people in the field to get the project done.
    Mr. Hobson. The real-world answer is, we probably wouldn't 
even get there. We would not be able to build the number of 
units. So we just wouldn't do it because no matter how much we 
try, we wouldn't get the money; and our kids would continue to 
live--the ratios, I don't know, they are maybe not as high they 
are, 10, 15 percent maybe, but it is still significant in the 
fact that you not only leverage, but you get a product and get 
a better product than we might have done otherwise.

                              New Orleans

    Mr. Vitter. Okay. I had some specific questions about what 
is going on in the New Orleans area, and I guess this is best 
addressed to Mr. Holaday, a Navy project.
    We are very excited about what is going on in Belle Chasse, 
and last year this subcommittee and the Congress voted $5 
million to that; and that, with previous money, is going to get 
us to about 526 units. But there is an additional need, which 
you all documented last year with your 1391s, and according to 
your documents last year, that would be about 270 more units or 
about $5 million more because your 1391 last year was 10 
million total.
    Can you confirm that continuing need for purposes of our 
direction in the subcommittee?
    Mr. Holaday. Yes, sir.
    I am not--the privatization project that we have in place 
in New Orleans now, which should--we are in final stages 
ofnegotiation right now with the group that we are working with--will 
actually provide us with a total of 935 houses; and according to the 
information I have available to me, that takes care of the entire 
requirement in New Orleans. We take care of renovating about 416 
existing units and building 519 new units for that total of 935. So, as 
far as we know, this takes care of the entire requirement in New 
Orleans.
    Mr. Vitter. Let me back up. All of the local commanding 
officers disagree in terms of the need. They say there is more 
need out there, about 270 units.
    Mr. Holaday. Sir, again, this has been, I talked to both 
Admiral Totushek and General Maus, and they both told me that 
they agreed with these numbers and this met their requirement.
    Mr. Vitter. What changed between last year and this year?
    Mr. Holaday. We have additional units. We received 
additional money from the committee, and we added additional 
units to the project. The additional project was about 300 or 
400 units less than what we are able to accomplish today in 
going forward.
    Mr. Vitter. But last year the 1391 was far more than--was 
for $10 million more, and we got $5 million last year. So there 
is a gap of $5 million.
    So in terms of that $5 million differential what changed 
between last year and this year?
    Mr. Holaday. Because we are using--if we used traditional 
military construction, then we would have needed $10 million to 
build about, I think it is around--the number is around 200 
houses. I have probably not got the numbers right. Actually, it 
would be more like a 100,000, because we usually average 
$100,000 a house; $10 million would be about 100 houses.
    Because we are using a public-private venture, we are able 
to leverage the money that we have available, and we are 
actually able to do more housing than if we had done MILCON.
    Mr. Vitter. But last year the model was certainly a public-
private venture. We weren't saying we were going to do it 
MILCON last year.
    Mr. Holaday. Sir, the original proposal for New Orleans was 
to do less than the full requirement in New Orleans. As a 
result of the help we received from the committee, the 
additional funding that was put in the project, we were able to 
meet the full requirement in New Orleans.
    Mr. Hobson. How many houses did they tell you they need?
    Mr. Vitter. Something like 270 more.
    Mr. Hobson. Over 900, they say they need 1,100 houses?
    Mr. Vitter. Twelve hundred.
    Mr. Holaday. This is not the information I have available, 
but was provided and coordinated with both generals down there, 
both the Navy and the Marine Corps.
    Mr. Vitter. Let me back up a little because I don't think 
we are understanding each other.
    A year ago the model was certainly public-private, not 
traditional MILCON, and a year ago you all sent us a 1391 for a 
total of $10 million, and a year ago we responded with $5 
million. So that means, in terms of what you said you needed 
and what we did, there is a $5 million gap. So what has changed 
in a year to make that $5 million need go away?
    Mr. Holaday. Well, essentially the original public-private 
venture project at New Orleans would not have met the full 
requirement, housing requirement of New Orleans. We were 
originally planning on doing 147 houses as a PPV, and that was 
it. We weren't planning on doing any additional construction at 
that time.
    As a result of working with the committee and getting 
additional funding, both from other Navy sources and the money 
that was provided by the committee, we were able to increase 
the amount of housing we were providing to a total of 935 
houses. So that meets the full requirement.
    Mr. Vitter. But again----
    Mr. Holaday. Sir, I will be happy to work with you.
    Mr. Vitter. Can you explain in a more focused way what 
changed, what made this $5 million gap disappear?
    Mr. Holaday. Let us talk the leverage issue that Mr. Yim 
addressed a little bit.
    Mr. Vitter. But that leverage was built into the figure 
last year.
    Mr. Hobson. I need to get to him, but I am willing to come 
back if you want to come back.
    Mr. Edwards. Is this 5 minutes or 10 minutes?
    Mr. Hobson. There are going to be four votes. So I want you 
to get in.
    Mr. Vitter. Why don't we go to vote now, and if we come 
back----
    Mr. Edwards. I would like to wait and come back.
    Mr. Hobson. Why don't we go vote and come back? You have 
three or four questions you want to ask. I want to give you 
time.
    David, I want you to finish up yours. So we are going to go 
do four votes and those--you guys are going to have to come 
back. The rest of you know we are going to come back, and we 
are going to finish this because it is important to these 
members; and we will come back.
    [Recess.]

                               FORT HOOD

    Mr. Hobson. Okay. We are going to start and we will go 
ahead and let Mr. Edwards ask some questions. Then we will come 
back to David, and hopefully they got you an answer.
    Mr. Edwards. If he wants to continue.
    Mr. Vitter. My discussion is mostly with Mr. Holaday, so 
why don't you go ahead?
    Mr. Edwards. Thank you. Thank you, Mr. Chairman. Mr. 
Chairman, if I could begin just to make a couple of 
observations, and then I would ask Mr. Yim and Mr. Johnson a 
question with regard to the Fort Hood RCI project.
    My observation is this, and I think everyone in this room 
would agree with this: It is just wrong, period, to have 
hundreds of thousands of military families, children living in 
substandard housing. And what bothers me is that a Congress 
that can decide a couple of years ago that all of the sudden we 
need a dramatic increase in highway spending and airport 
improvement spending, Congress can pass those two pieces of 
legislation, can't treat military families with the same level 
of respect we treat highways and airports.
    And I am sure that if this committee had its way, we would 
allocate the funds to take care of this problem, not over 20 or 
30 years, but you know, we could do it. But we all live in the 
real world, and I accept that for now.
    We have to have privatization as one of the three-pronged 
approaches, but that gets me to Fort Hood, and I, of course, 
have two interests. As you know, one, I represent it; but two, 
a little less parochially, 20 percent of the active Army duty 
divisions worldwide are located in Fort Hood. I am told 
approximately 20 percent of the Army family children, active 
duty children, are in the Fort Hood area.
    And the problem, if I use Mr. Olver's three-legged stool 
analogy, I accept the strategy: some kind of privatization and 
BAH, but let me talk about how that three-legged stool has not 
stood up very well at Fort Hood in terms of enlisted personnel 
with children.
    For them, BAH isn't a real solution because there are not 
many private developers building four- and five-bedroom homes, 
in many cases not even three-bedroom homes that an enlisted 
person with two, three, four children can afford. So that leg 
of the stool falls down.
    Then we have traditional military construction funding for 
family housing. I have supported DOD, defended DOD for 4 years 
now, and I have told people back home I support the fact that 
we have taken money that otherwise would have actually turned 
dirt and had people living today in new housing, I supported 
holding off on that money in the hopes that we could combine 
that and leverage it with privatization.
    So the second leg of the three-legged stool is MILCON 
family housing, and so for 20 percent of the Army divisions in 
the world there has been none of that for the last 4 years.
    Then that gets us to the third leg of the stool, which is 
privatization, and I want to commend both of you for the 
thorough and thoughtful approach you have taken to dealing with 
RCI. I think both this committee and your leadership have made 
it, when it is fully implemented, a program that will work and 
will work much better because of the questions that have been 
raised and the suggestions that have been made.
    But at some point there is a fine line, in my opinion, 
between thorough analysis and paralysis by analysis. I am 
beginning to wonder if in terms of 20 percent of the active 
duty Army divisions at Fort Hood--after 4 years of my 
supporting DOD's program for privatization, I am beginning to 
wonder if we are not at paralysis by analysis. And I know it is 
not totally in your hands at this point; OMB is an important 
player in this process. I guess they are not here to testify 
today, but----
    Mr. Hobson. He has had some discussions with them recently, 
so he can answer.
    Mr. Edwards [continuing]. I respect that. And that gets me 
to my final specific question.
    Given 4 years of frustrations but acceptance that you have 
to be thorough and careful and do it right--there is a limit to 
patience at some point. And the bottom line is, since we have 
been talking about this and I have been supporting this for the 
last 4 years, two rotations of families, real people with real 
children, have moved into Fort Hood and left Fort Hood without 
a single family home being built under any of these three legs 
of the strategic stool. Where are we on Fort Hood? How close 
are we and when do we think this committee can take a look at 
the proposal in order to give its final yes or no to the Fort 
Hood project?
    Mr. Yim. Well, let me take a first shot at that.
    It would be easy for me to say it is OMB's fault because 
they are not here today, but that is not the case at all. OSD, 
my office, me personally, asked some very difficult questions 
of the Army because I needed to be sure that I fulfilled my 
oversight responsibility.
    Mr. Edwards. And I respect it.
    Mr. Yim. And this is going to double the amount of the 
privatization we have done today. It was very important for all 
of us that this one be done correctly. It took us actually 
going down to Fort Hood. I think that we did have a little bit 
of paralysis by analysis, because we are just looking at paper 
and sometimes the paper doesn't tell us the whole story. So let 
me give you an example.
    We were wondering why the developer was looking at touching 
25-year-old houses before the 45-year-old houses, that doesn't 
make any sense; but then as we went down--and my director of 
housing went down and talked to the developer and talked to the 
base commander, understood the concepts of targeting particular 
areas and why that worked and some of the flexibility built 
in--we became a lot more comfortable.
    So I think that is why you have to get away from looking at 
the paper, get out in the field, look at the dirt, look at the 
houses, talk to the people, et cetera.
    We conveyed that to OMB, saying, okay, we just can't look 
at the raw numbers; there is a rationale that is underlying a 
project that should not just focus on the first couple of years 
for construction, but has to focus over the entire 50 years of 
the management of it and the recapitalization of the project. 
So you can't be as reticent when we are bringing different 
tools on line that are primarily to deal with the management 
aspects, as opposed to the construction aspects of it.
    I think the project that is odd, weird, different is not 
going to get a favorable scoring; and we believe now, from our 
office we can trace the money that is being done, from some 
innovative ways into actual improvement in project scope and 
the timing of the project. So we made those arguments and we 
have, in general, pretty good support from OMB.
    The concern that they had was the fine line that is created 
between a in which there is significant private sector risk 
that would entitle us to the favorable credit scoring. And we 
have certainly, as you know, had a lot of meetings with them; I 
talked with them just before the hearing, coming in yesterday 
evening. It is moving up the significant chain in OMB.
    There are some questions, I understand, that are going to 
be asked of the Army because of the relationship between the 
Army making a loan to an entity of which they are an equity 
partner, and whether that is an entanglement that insulates the 
credit scoring or goes over the line of being just a limited 
partner.
    So there are really two kinds of related issues, a 
liability issue of losing the limited liability protection, as 
well as getting a favorable credit scoring. I believe that we 
are on the track to work this out, and it is not just a hope 
and a prayer; I believe that when they saw that the money is 
getting reinvested in the ways that it is, a lot of their 
concerns, just like our concerns, were alleviated.
    Now, I know they are briefing the new political people that 
have come into OMB and they are moving it up the chain. I asked 
them, could you please resolve this by Wednesday at 10 a.m., 
because I am going to be looking Congressman Edwards in the 
eye, and I would like to have a good news story for him; and 
they could not. They are telling me probably early next week 
they will have a much more definitive answer to it.
    Mr. Hobson. But they have been receptive to you?
    Mr. Yim. They have been very receptive.
    Mr. Hobson. They have not been negative towards creative 
reasoning?
    Mr. Yim. They haven't. They have similar concerns that I 
have had: Are we making the right investment decision in terms 
of these resources?
    Mr. Hobson. Tell them about the utilities.
    Mr. Yim. The utilities, this is an issue that all of the 
services, except the Army, make the members themselves 
responsible for the utility costs. The Army, for other reasons, 
wishes to have the members insulated from utility spikes or 
having to pay their own utility bills.
    I personally believe that the analysis would show that that 
is not the right investment decision, but in Fort Hood there 
are some unusual circumstances that have caused me to rethink 
that, at least for the applicability to Fort Hood. You have 
different demographics, as you point out. You have many 
people--this is their first assignment, many people really 
aren't used to homeownership. Demographics are different. Some 
of those responsibilities are in a high training ratio, and 
they have the larger families.
    So what we asked the Army to do was focus on energy 
conservation and structured measures, if they were not going to 
back off of their policy of insulating the individual member 
for the responsibility. That fulfills some, but not all, of my 
requirements. And the deal I am cutting with my colleague, my 
good colleague to the left, is, we are going to resolve this 
issue one way or the other before the other Army projects come 
down the road, but for Hood we worked out a situation that I 
think I can live with, and live with the situation.
    But the problem for OMB was that they think that is another 
government entanglement that makes this a nonprivate sector 
risk project. So the combination of the loan to an entity when 
there is an equitable--equity interest plus the utility made it 
look and sound and feel more like a government project than OMB 
was comfortable with initially.
    Mr. Edwards. On what basis do you think we are not going to 
be discussing these same issues 6 months from now? I am not 
going to ask you to speak for OMB and say when a decision is 
going to be made, but at some point we have to ask, where is 
the bottom line and when is dirt going to be moved. Because not 
one soldier's family has been helped in 4 years.
    I think we are getting closer. I think we can. Because of 
the questions you raised and the role that this committee has 
played, I think this is going to be a much better program, a 
more sound program for military families and taxpayers.
    Mr. Hobson. Fort Hood suffers from something else. It is 
the first one in the line and it is big, and if it doesn't 
work--here's the problem. If it doesn't work right, then all 
the privatization, not just the Army, but everybody is going to 
suffer because we have 5,000 units there--what is it, 6,000, 5- 
or 6,000 units--and it is a totally different or a lot 
different approach than has been done before.
    If it doesn't work, and we get some things in place here, 
and he has got a lot of--there is tendency to have a--well, you 
did at Fort Hood--you have a got-to-do-it-here type of 
syndrome. And if we don't get this one right, privatization 
probably is really hurting, because there are people in the 
service, people in the Congress, who don't want privatization. 
They aren't on this committee, I don't think, but they are out 
there.
    And so it is very important that we get this one right, 
going in.
    So there is some fear there, and we are working through all 
these things.
    I will be very frank with you. We will probably makesome 
accommodation on the utilities here at Fort Hood, but don't look for it 
elsewhere, because it is the wrong policy decision to do, because 
people don't conserve when they are not involved in investment of it. I 
have been an apartment manager and owner, and you go by and there is 
nothing that bugs you more, if you are paying the utilities, than to 
see the air conditioning coming on in the summer with the windows open; 
or it just got too hot in there, so they just open the windows and the 
heat comes out, and they are not paying for it and you are paying for 
it.
    So it is not, overall, the right thing to do. There are 
some unusual things here. First of all, it is going to be a 
while before they get any grant because they have to go beyond. 
This is just the beginning. When you get to the point of--maybe 
that is the question. You ought to ask him.
    Mr. Edwards. That would be a good question.
    Mr. Hobson. We are not going to take forever with OMB; we 
are going to get this resolved. I think they understand--I 
think Joe Sykes pointed out and is very helpful to the project.
    We are going down to the project. I think that will be 
helpful, too, but we can't afford to nitpick this forever. We 
have got to get it done and got to get it going, assuming that 
when we look at all of the numbers in the underwriting--and I 
think one of the things we have done is, we had a meeting, when 
was that, in November or December, where we discussed a lot of 
these things and tried to get this. So I was assured by a high-
ranking official within the Army a month ago that this was all 
done, and it wasn't; and so we are working through that, and we 
are going to get this--I assure you we are going to get these 
things resolved.
    I think the OMB has a better understanding of what they are 
dealing with. They had the same fears that everybody else had 
about the size, the scope, what would really be next, because 
it is innovative and it is new. The Senate has certain number 
of days, to look at it. Then it goes back, and he has go out 
and probably bid this thing, I guess.
    What is your timing? Let us assume that we get to the point 
where he signs off, we sign off, Senate signs off, what is 
realistic to think about being in a grant?
    Mr. Johnson. I would think, once the Congress has signed 
off and we get the paper back to go and it is ready to go for 
the construction, I would say 60 days after we get the approval 
for the contract scoring.
    Mr. Hobson. Let me ask you this: When you did Fort Carson--
and I am intruding; I won't charge you on this--when you did 
Fort Carson, the first thing that that developer did that I 
thought was really smart was, he went in there and he started 
managing the property and responding to families right away.
    Do you think that will happen here?
    And started doing some little rehab stuff and got everybody 
behind him. Correct me if I am not saying it right.
    Mr. Johnson. That is correct. He started right away, and in 
30 days he had 200 units back on line, that is, down from 
maintenance, and got them moved in before Christmas.
    Mr. Hobson. That created a wonderful atmosphere.
    Mr. Johnson. Yes.
    Mr. Hobson. Is there any kind of plan like this?
    Mr. Johnson. After Congress has approved it, we are ready 
to go to work in 90 days.
    Mr. Edwards. Just assume April 1st OMB signed off, I 
believe Congress has 45 days for approval, so that takes us 
into mid-May.
    Mr. Hobson. We may not need all that depending on the level 
of detail.
    Mr. Edwards. Say, by May 1st Congress has approved it. When 
would we think the first family could move in to a new home? Or 
would renovation be the first part of that process?
    Mr. Johnson. Well, I suspect renovation would be the first 
part of the process, because there are some to be renovated. 
But that doesn't take as long as building a house.
    Mr. Hobson. Why don't you get a number and get back to us, 
because I don't think you have got those numbers right now.
    [The information follows:]
              Renovations and Moving Families in New Homes
    Question. What is the timeline of events that will take place after 
Congress approves the Fort Hood Community Development and Management 
Plan (CDMP) and when will construction start?
    Answer. Upon approval by Congress, the Army will issue a Notice to 
Proceed (NTP) to the Installation Commander at Fort Hood, Texas. 
Subsequently, over the next 60-90 days, the Fort Hood Family Housing 
(FHFH) Limited Partners will conduct the transition phase as described 
in the Community Development and Management Plan (CDMP). The key events 
during the transition phase include: (1) a Subcontracting/Small 
Business Fair, (2) procurement of subcontractors, (3) financial 
closing/agreement signing, (4) a groundbreaking ceremony, and (5) 
conveyance of housing units and the transfer of operations and property 
management.
    The first phase of new construction and renovations will begin 
immediately after the transfer of operations. The first phase of new 
houses will be ready for occupancy in 10 months, and the first phase of 
renovations is expected to be completed in 5 months.

    Mr. Edwards. I think the idea the chairman mentioned that 
occurred at Carson, some quick tangible results, I can only go 
down there so many times and tell them for 4 years, trust us, 
it is really going to be great. After 4 years they begin to 
look at you. And fortunately some of those people have left 
now, so I have got a new group I can say, trust us.
    Mr. Hobson. And I wasn't here 4 years ago.
    Mr. Edwards. I know.
    I will summarize by saying, I really do respect what you 
have done, Mr. Secretary, in working with the Army and what the 
Army has done to try to be thorough in this process, because 
the chairman is right, this is a big project. This will 
determine maybe the future fate of RCI, so I want it done 
right, and I don't want a disaster occurring on my watch and in 
my district. It needs to be done right and done well.
    I just hope we don't end up with somebody at OMB with 
paralysis by analysis stretching us out for months longer. If 
we took that approach, no President would ever make a decision, 
no Member of Congress, ever cast a vote. There comes a time 
when we just have to make a decision, having thoroughly 
evaluated risks and pluses and minuses.
    Mr. Johnson. This is a great project, and we are behind it 
as hard as we can push.
    Mr. Edwards. Thank you for what you have done, for both of 
you for what you have done.
    Thank you, Mr. Chairman.

                   RESIDENTIAL COMMUNITIES INITIATIVE

    Mr. Hobson. Let me ask one other thing. Then I will go to 
David.
    The only thing I am concerned about with the Army is, you 
are only looking at RCI. I really think the Army needs to look 
at other programs along with that and have in your arsenal 
different types of programs; and the three big deals that you 
have done so far are all RCI. I haven't seen any other approach 
within the Army. I haven't even--you sent a budget down here, 
you knew I would get back to this.
    The first budget I received didn't have one MILCON project 
for a house in Columbus, which obviously meant that you didn't 
do anything except rely upon this. And I think it is not 
prudent for the Army, with all the different problems you have 
got everywhere, just to rely upon one huge program. You know, 
we are going to make this work, but it shouldn't be the only 
thing that you do anywhere around the United States. There have 
got to be other posts where other things could be proceeding.
    I think one of the problems we have is, when this takes so 
long and nothing else is going on, it looks like you haven't 
been doing anything. And you have been; I know that.
    Mr. Johnson. We are going to work on the three-pronged 
approach, and we will have privatized 20 installations, 56 
percent of our inventory, which is 67,000 units now. But we 
have got to get the rest of that out of MILCON at no out-of-
pocket expense for the soldiers.
    Mr. Yim was talking about some of these soldiers have moved 
out of town and there would be a huge increase. That is an 
adequate analogy, too.
    So with the three-pronged approach, we will privatize and 
be finished, hopefully, by 2010; but right now it looks like it 
is 2015.
    Mr. Hobson. Well, I hope you will also look at the barracks 
for single, enlisted people. We have got to find some creative 
ways--and universities have done this in their own areas, where 
they don't build them all themselves anymore; they find ways. 
We can find creative ways to build those also, and some of 
those are--I think Fort Bragg is where they have got that, 
barracks where they put people they want to keep, and put them 
in this awful barracks, and it is not a long-term barracks.
    They don't consider them long term. I do. I forget how long 
the training was, but it was longer than a few months, and it 
is a dump. And these are people that you are training to keep 
in the service, because you are giving them upgrade training in 
special forces stuff. We put them into that, and we don't have 
the money.
    We have got to figure out a way, and normally I would saywe 
have got to finish it off, but in a case like that, I don't think we 
can. But if we make the deals right, we don't have to worry about that 
that much in this. So I would encourage all of you to look at that.
    And then I will go to David. You have got another question?

                              NEW ORLEANS

    Mr. Vitter. Yes, thank you, Mr. Chairman. I won't dwell on 
this local project, but I did want to follow up with Mr. 
Holaday about it and certainly get some things on the record. I 
think it is obvious, we have a disagreement about the need that 
is there, but I do want to correct a couple of things.
    Number one, all of the local commanders agree that there is 
an additional significant housing need there, and you 
referenced Major General Maus in particular. I took the 
opportunity at the break to talk to Major General Maus by 
telephone, and he confirmed what he has always told me, that 
there is a continual additional housing need there, above what 
we appropriated last year, which was $5 million.
    The second point I wanted to correct for the record is, it 
seems to me that additional need is confirmed by the Pentagon 
itself in terms of the request, the 1391 that was sent to us 
last year, that was for a total of $10 million. The 
appropriation process yielded 5; obviously that is not 10, that 
is half, with a gap remaining of $5 million.
    That request came over not as traditional MILCON; it was 
specifically labeled PPV project, and I have the documents here 
from last year. And so it came over, $10 million add-on project 
for privatization PPV. So it seems to me that also the Pentagon 
itself confirms that additional need, and I just wanted to get 
that on the record, and I will submit this for the record.
    I have a couple of other specific questions, but, Mr. 
Holaday, I don't know if you want to say anything in response 
to that.
    Mr. Holaday. Sir, we will check the requirement. Again, as 
I said earlier, I did have confirmation from both Admiral 
Totushek and General Maus that they agreed with the requirement 
of about 940 homes in the New Orleans area, which was an 
increase over the number we had about a year earlier. If 
General Maus thinks we have an additional need, we will go back 
and redo the housing market analysis; and if the market survey 
demonstrates we have an additional need, we will support that. 
And I will be happy to work with you and your staff on 
clarifying the numbers to make sure we understand what is 
wanted and our requirement.
    Certainly our intent and the commitment we made to the 
committee last year was that we would fully build out the 
requirement as we knew it; and that is what we think we are 
doing. So if there is an additional requirement we have the 
capability to make that adjustment----
    Mr. Vitter. I look forward to working with you, and maybe 
we can talk together with Major General Maus. But again, even 
from the Pentagon's perspective, what I don't understand is how 
the cost to meet the complete need in a year has shrunk from 
$10 million to $5 million.
    Mr. Holaday. Sir, it is a difference between how we spend 
the money and the number of houses we are getting. Originally 
we had in New Orleans, I think, a project for $12 million that 
would have built us, or renovated and built some new homes. The 
requests came in for--this is a new request that you are 
talking about there of--10 million came in. Five million was 
appropriated. That gave us a total of about $17 million in 
MILCON money. If we used that money strictly to build housing 
the traditional way, it would have bought us about 170 houses. 
The Navy, through other funds of about $6 million----
    Mr. Vitter. Can I interrupt for a second?
    Mr. Holaday. Sure.
    Mr. Vitter. The request didn't come as traditional MILCON. 
The request on this piece of paper is PPV.
    Mr. Holaday. I will have to check the paper. The important 
thing is the number of houses, not the amount.
    Mr. Hobson. Some of that is leverage?
    Mr. Holaday. Yes, sir, I think it is a leverage issue.
    Mr. Vitter. But in other words, that should have been built 
into this $10 million?
    Mr. Hobson. Actually, if I understand it right, they may 
have done a better job.
    Mr. Vitter. If they are doing the same thing for half the 
cost, they are definitely doing a better job.
    Mr. Hobson. I think that is what happened. There may be a 
difference of opinion as to what may be there, but part of the 
idea is not to use all the MILCON, if we don't have to, to get 
the number. And there is some disagreement, I think,of what the 
top number is, which is where you are. And it wouldn't have been this 5 
million for that, because if they would have used all this on the 
original public-private partnership thing that they had originally 
proposed, I would have been mad at them, because they would have gotten 
about what the original proposal was, which was a fewer number of 
houses. But by doing it, they were able to get better leverage.
    I think the question still out there in your mind that we 
need to answer is, do we need to go back and put more money 
back in down there to build more houses? Do they need 1,800? Do 
they need 1,500? What is the right number there? And that is 
where disagreement is.
    But I don't want anybody to use the 10 million to get to 
the original deal if we can save money, but I don't know what 
the original deal was, and that is where the disagreement is.
    Mr. Vitter. Absolutely, and we will clarify the numbers.
    Mr. Hobson. Maybe it says in there. Does it have a number?
    Mr. Vitter. The add-on number is 577, but again this is not 
going back to the original deal.
    Mr. Hobson. No, no. What is the number of houses they were 
going to do in that deal?
    Mr. Vitter. The deficit, which this is designed to meet, is 
577.
    Now, there was a lot that went before to meet the overall 
need, but this is just to add on to the project a year ago. 
This isn't going back to day one; this is just a year ago when 
everyone should have understood what the leverage opportunity 
was. And it is in that context I don't understand how you could 
be 100 percent off.
    Mr. Hobson. Well, they are going to have to justify it.
    Mr. Holaday. We will check the numbers, and I will get back 
to you.
    [The information follows:]

    The Navy's projected family housing deficit in the New Orleans, LA 
area is 577 units. This estimate remains unchanged from the projection 
cited in project documents provided to the Committee last year. Based 
on the discussion during this hearing, the Navy will update the market 
analysis that is the basis for this deficit projection.
    The housing privatization project, currently in exclusive 
negotiations, would result in the construction of 519 units, or 90 
percent of the total deficit. (This is consistent with Department of 
Defense policy, which allows building only to 90 percent of the total 
family housing deficit.) Our intent remains to completely address our 
family housing requirements in New Orleans in a single project. We will 
seek to accommodate any changes in the scope of the public/private 
venture (PPV) project based on the results of the updated market 
analysis.
    The current estimated project cost for the New Orleans PPV project 
is $23 million. The Navy plans to use the following fund sources to 
finance this project: $12 million authorized and appropriated in Fiscal 
Year 1998 Family Housing, Navy funds for New Orleans; $5 million 
authorized and appropriated in Fiscal Year 2001 Family Housing, Navy 
funds for New Orleans; and $6 million in prior year Family Housing, 
Navy construction program savings.

    Mr. Vitter. A couple of more real quick follow-up 
questions.
    I understand we are on the verge of signing a contract. 
Your testimony says this fiscal year, but do you know when that 
is going to happen, more specifically?
    Mr. Holaday. If I say within the next 2 months, will that 
be all right? Part of the hesitancy there is, we should 
complete formal negotiations within the next 30 days. Then we 
go through the process, the approval process within both the 
Department of Navy, Department of Defense and then the 
committee. So I am hoping this summer we will get it.

                       JOINT COAST GUARD PROJECTS

    Mr. Vitter. The other specific question: There is an 
additional need besides what we are talking about. Above that 
there is a real additional need of the Coast Guard, which has a 
district headquarters there.
    I would like to ask all of the services either to say a few 
words now, maybe to follow up with my office. I understand 
there are projects which have gone on in the past, cooperative 
projects with the Coast Guard to help meet Coast Guard housing 
needs. How has that been structured and can we use that as a 
model in New Orleans?
    Mr. Holaday. Well, certainly, I can't speak to the previous 
experience, but in New Orleans if the Coast Guard has a need, 
we have a capability to modify the project that we are working 
on there, to take money from them and use it to build housing 
for the Coast Guard.
    Mr. Hobson. That money has to come from us?
    Mr. Holaday. Comes from the Coast Guard.
    Mr. Hobson. I asked, because I have been concerned about 
this, too, because I hear the Coast Guard has got some bad 
housing. We don't fund the Coast Guard; the Transportation 
Committee does that--we have had some jurisdictional 
discussions about that.
    Mr. Vitter. Does that sort of joint project take money from 
the Coast Guard above and beyond their allocation?
    Mr. Holaday. Yes, sir, it would take some investment from 
the Coast Guard.
    Mr. Vitter. It would take some up-front money from the 
Coast Guard?
    Mr. Holaday. Just as we have to have up-front money also.
    Mr. Vitter. Have there ever been projects of the services 
that have built the Coast Guard into the project, not using up-
front money, but only their housing allowance?
    Mr. Holaday. We are talking with the Coast Guard. I am not 
aware of any. That doesn't mean there are not any.
    What we do today--this doesn't really answer your question, 
but it deals with the need--is, if we have excess housing on a 
base and the Coast Guard is in the area, we will allow Coast 
Guard families to live in the housing if we haveno requirement 
for Army, Navy, Air Force, Marine Corps personnel. So they can, in 
fact, move into the housing. And I believe that there is some--they pay 
for that in terms of an allowance to the Department because of the 
interdepartmental requirements.
    Mr. Dishner. We are doing the same over at Bolling, 
Anacostia. I know that we had bedded down some Coast Guard 
there, and the note they gave me was, we are talking to the 
Coast Guard now about privatization to see how we can help, for 
a share of what we are doing here with them.
    Mr. Vitter. Okay. I guess my question is--not to fill up 
unused space, but to build space to meet their needs, what is 
the minimum you need from them? I guess that is my question.
    Mr. Holaday. In New Orleans specifically?
    Mr. Vitter. Yes.
    Mr. Holaday. I would have to know what their requirement 
was.
    Mr. Vitter. Okay. If you could work with us on that, that 
would be great.
    That is all I have, Mr. Chairman. Thank you.
    Mr. Hobson. The Coast Guard thing is interesting. They are 
a service, but we don't have the authority in this committee to 
work on that, except we have done more housing than most people 
have. So I would encourage everybody to work together on that 
to see what we can do to help.
    We don't want to get into somebody else's jurisdiction 
though. That creates a whole other set of problems.
    Mr. Dishner. If I could add to that, at Fort Dix and 
McGuire--we are including the Coast Guard needs there at Fort 
Dix; there will be no up-front dollars put in by the Coast 
Guard. There is another example.
    Mr. Vitter. That is basically what I want to hear as a 
model.
    Mr. Hobson. The one thing that I wanted to mention to all 
of you on this thing is, there are places where one service or 
another has housing or is going to leave housing. I think, for 
example, the Navy is going out of a facility in California 
someplace. Air Force--people drive a lot farther in California, 
a lot farther to work than most of us would--except in Texas, I 
guess they drive a long way, too, because it is just big.
    But I hope we are all cooperating as we move in and out of 
facilities to make sure that somebody else--if somebody else 
can use these facilities, that before we give them up to 
wherever we have to give them up to, we make sure that there is 
not some other service that can use them.
    And, you know, for example--I keep coming back to this, but 
Fort Ord, it is just outrageous to me that we BRACed that base, 
and we left all that housing there. None of that housing meets 
code, which creates another problem; and if we had kept it, we 
could have done it. But by giving it up, it creates a whole 
other problem, and I don't know how to--I don't want to get 
into that, but it is outrageous to allow the public's money to 
sit there for 7 years, to deteriorate and not be utilized.
    And I am sure there are other places around the country 
where things like this have happened, and if we do, as we look 
at closing facilities or moving facilities or--I don't want to 
use the word BRAC, it frightens everybody. But we need to take 
into better account how we handle some of these assets. 
Because, I mean, I assume some of these assets are--a quarter 
of a million dollars there, and there are 2,500 of them, if I 
am not mistaken, just standing there, weathering in the sun; 
and nobody was cutting the grass or watching the--I am 
surprised something bad hasn't happened to them over the period 
of time.
    So if you can, make sure you are talking to each other and 
that OSD is looking at these as we move things around.
    Mr. Dishner. That interoperability is going on today, Mr. 
Chairman, with the Navy down in southern California, with the 
units that they no longer needed. We moved in and we had some 
demolished, some with Paul at McGuire and Fort Dix. We took 
over some of his housing when they put Fort Dix up for closing.
    So there are two examples just off the top of my head that 
we have done work together with.
    Mr. Vitter. Real quickly, if the services here, officers, 
could get to me just some basic information about any project 
you have done or are doing with the Coast Guard--I don't mean 
where you have extra space, and you let them live there, but I 
mean where you are actually essentially building for Coast 
Guard need in addition to your need and what you get from them 
to do that.
    And the second thing, if you could get to us, it would be 
real helpful just all of any outyear, meaning maybe 2003 to 
2007, projects you have in the pipeline for greater New 
Orleans; in other words, the 1391s for the outyears of what you 
are planning, whether it is housing or anything else.
    [The information follows:]
                         Housing Privatization
    The Air Force Reserves and Active Air Force have no joint projects 
programmed or executed in the recent past with the Coast Guard.
    The Air National Guard (ANG) has joint basing and/or operations 
with the Coast Guard at three locations--Selfridge ANGB, MI; Otis ANGB, 
MA; and Gabreski ANGB, NY.
    The only ANG project completed in recent history with the Coast 
Guard was an FY00 Repair Primary Electrical Distribution project at 
Otis ANGB, MA. The ANG part of the project was executed with RPM ($3.2 
million), and the Coast Guard piece was executed with MCP ($1.3 
million).
    The Air Force (Active and Reserve component) does not have any 
MILCON or housing projects, including or excluding projects for the 
Coast Guard, in the New Orleans area.

                          Contract Enforcement

    Mr. Edwards. Mr. Chairman, I would like to ask two 
questions. First, a legitimate concern I know you have 
addressed, but I would like to hear specifically what our 
leverage would be on a developer 20 years out, 30 years out, 5 
years out, just in maintaining the houses to the standards the 
DOD says is necessary.
    What leverage do we have in development to see that they do 
their job and meet the standards that we put against that?
    Mr. Yim. What we need to do is be sure we have good 
contract mechanisms to put them in default, take the stuff back 
from them; and one of the best methods is that we are putting 
lockboxes essentially on towns that have limited ways you can 
withdraw money from this account. So they have to be 
recapitalized at certain rates, but money comes out of those 
lockboxes and certain priorities as the developer isn't able to 
take all the profit out without adequately capitalizing 
reserves, that type of thing.
    In many cases, we have conveyed title only to the units 
themselves, but retained the underlying ground; so that gives 
us some additional leverage on default mechanisms.
    So that is a big concern with us. It is not just the first 
5 years; it is really more like 10th year to 12th year when 
numbers may begin to go south a little bit on us.
    Mr. Edwards. So at the beginning, the deal is structured 
such that the developer has his own self-interest to stay 
involved and it does get its money back for X number of years. 
So at that point clearly it is in their self-interest to stay.
    Beyond that, lockboxes, other possibilities. Okay.

                            Exit Strategies

    Mr. Hobson. And I have raised a lot of questions about 
existing contracts within the services, because I don't like 
the way they draw their contracts; and I think their exit 
strategy in deals, in other contracts I have seen structured, 
other types of things, it is not the best. So we are going to 
look at some of these documents a lot stronger than they have 
looked at them in the past.
    You have got to have some mechanism, if these things fail, 
that you have got somebody who can move in and take over--
having done that once; I walked in and threw a guy out of his 
property once--you have got to be prepared to do this. You are 
going to get court cases and all kinds of stuff.
    Somebody has to have a plan in place, and I would hope it 
is a common plan, because this is not something that changes. 
Jurisdictions will affect it. So everybody has got to be up. 
And these things aren't all going to work someplace along the 
line. Something is going to pop; it is just business.
    This is going to have to be the last question. I have got 
to go chair VA, HUD.

                     Local Contractor Participation

    Mr. Edwards. Finally, do we have a process of determining 
how much of the developer's expenditures go to local suppliers 
and developers? I hope they understand the importance of using, 
whenever it is economically feasible, local businesses as 
suppliers. You are going to lose political support for these 
projects around the country if some outside group comes in, 
absorbs all the resources and doesn't put any back into the 
community.
    Do we have a system for getting that information from the 
project developers?
    Mr. Yim. Yes. We have it, nonmandated, and it is targeted 
along those lines.
    Mr. Edwards. But--they are not mandated percentages, but is 
there a process for getting that information back so if a 
member of Congress wanted to ask, how much is a local developer 
spending, or DOD wanted to ask, we could get that information?
    Mr. Yim. Yes, you could, and actually it is good business 
sense for us because rather than prescribe certain building 
materials nationwide, it makes better sense to use local 
materials, that people are used to working with, supplied for 
us. So there are some business reasons driving it, as well as 
our policy to encourage small business partner submission.
    Mr. Edwards. Thank you, Mr. Chairman.
    Mr. Hobson. No bundling. We don't like bundling. That is 
the message for another hearing, not here.
    Again, thank you all very much. I think part of the 
litigation is moving forward. I think when we get done we are 
going to have a model to get stronger programs and more of it, 
because we all know the need is there; and we can get you back 
to 2010, if we can get more aggressive, if we know what works 
and what doesn't work.
    So I thank all of you for your patience in working with us, 
and Randall, for the underwriting you have to do. We don't 
really have a very good ability to underwrite within Congress, 
but we are trying.
    Thank you.
    [Clerk's note.--Questions for the record submitted by Mr. 
Yim.]

                      Future Housing Requirements

    Question. Before the military enters into a long-term 
privatization commitment, the military needs to know with a 
high degree of certainty the installation's future housing 
needs. To do this, the military must determine whether the 
installation will be needed in the future; and if so, then 
forecast the installation's future mission, military 
population, and family housing requirement. Yet, most service 
forecasts of these variables only cover a period of 3 to 5 
years. How can each Service assure that the housing in a 
proposed 50-year privatization project will be needed over the 
term of the agreement?
    Answer. The Services cannot assure that privatized housing 
will be required by military members fifty years into the 
future; however, privatized housing provides a much more 
flexible approach to facing that uncertainty than traditional 
military construction housing which is government-owned.
    With privatized housing, the government subsidizes private 
owners to develop and operate housing intended for military 
members. The private owners must attract the members to live in 
their developments. If the housing demand of military tenants 
is reduced for an extended period of time, the private owner 
must look to alternative private tenants to occupy the housing. 
If the base were closed, the private owner would have to 
permanently adjust to serve a private tenant base. In either 
case, the government has no legal obligation to occupy the 
housing. In many past base closures, housing availability to 
attract anchor tenants is a major issue for local communities. 
Privatized housing would greatly facilitate reuse in this 
regard.
    Additionally, if the government has guaranteed a private 
loan against closure or realignment, it is potentially liable 
for assuming that loan. However, to assign the loan to the 
government, a private lender must prove that the closure or 
realignment directly caused a loan default by the developer, 
and that the developer could not avoid the default by renting 
to the private sector.
    Question. What exit strategies are built into privatization 
agreements should the Services' need to reduce their 
requirement or get out altogether? What about the future on-
base housing requirements?
    Answer. Privatized housing is operated and managed by 
private owners, who must attract individual member tenants to 
occupy the housing. Each project is structured somewhat 
differently depending on factors such as project location, the 
local housing market, and the optimal means of providing a 
subsidy to the private developer. If the Service's housing 
requirements were reduced or eliminated, individual tenant 
members would no longer be available to occupy the housing, and 
the owner would have to find an alternative tenant source to 
continue as a going concern. If the private housing were 
located off-based, no exit strategy would be required, though a 
Service might pursue the return of its investment. If the 
private housing were located on-base, depending on the 
circumstances, it might be necessary to restructure the 
property ownership. Most of DoD's projects are on land 
severable from the base. Those that are not represent such a 
small portion of the total housing stock that only total 
closure of the base would have an effect.
    Question. GAO found that many military members prefer to 
live off base, but live on-base only for economic reasons. The 
increase in BAH rates could stimulate these facilities to make 
the move off-base. Have the Services accounted for this when 
determining future housing requirements?
    Answer. Yes. The Department requires a current Housing 
Market Analysis (HMA) be conducted for family housing 
construction projects that are proposed to be included in 
budget requests. The HMA process projects out five years to 
determine housing requirements. In order to determine the 
availability of local housing markets, the analysis estimates 
housing allowances over the same five-year period to define the 
maximum affordability military members might expect to pay for 
renting housing.
    Question. What steps need to be taken to get a consistent 
housing requirements determination process across all Services?
    Answer. Unfortunately, though the issue has been under 
review for well over a year, DoD has not reached consensus on 
the highly complex issue of surveying local market capability 
to house our military families. The Military Departments have 
genuine concern that a new process will excessively decrease 
their on-base housing inventory and that the market's response 
time will be too slow. For a long time, DoD has retained on-
base housing while private sector housing was being developed 
around its installations, but then failed to adequately fund 
the upkeep of its housing inventory. Both the requirements 
determination process and the adequacy of funding will require 
continued and focused attention. I am confident that we will 
come to closure on these important decisions and put an 
appropriate housing requirements process in place that will 
look to the private sector first to satisfy our housing needs.

                        Institutional Knowledge

    Question. What steps are being taken by each of the 
Services to institutionalize capacity within its offices for 
developing future privatization projects and managing long-term 
privatization agreements?
    Answer. Each Service has established or is establishing a 
portfolio or program manager to institutionalize its capacity 
to develop future projects and to manage long-term agreements. 
These portfolio managers are situated within the Air Force 
Center for Environmental Excellence, the Army's Residential 
Communities Initiative, and the Naval Facilities Engineering 
Command.
    Additional, the Office of the Secretary of Defense has 
instituted the Housing Privatization Program Evaluation Plan 
(PEP). The PEP evaluates the advantages and disadvantages of 
various authorities, the financial condition of the program and 
individual projects, contractor performance, and service member 
satisfaction. Semi-annually, the Service portfolio manager will 
report on its program to OSD, which will in turn roll up the 
Service reports into an overall program report. At present, the 
Services have provided their first reports, and the first 
program is expected to be complete by June.

                            Life Cycle Costs

    Question. Has the Department developed a standardized 
methodology for comparing the government's long-term costs for 
a housing project financed with traditional military 
construction funds and with the privatization authorities? If 
so, please describe the methodology, and if not, why not?
    Answer. Yes, the Department has issued guidance for 
calculating life-cycle costs in its Draft Military Housing 
Privatization Initiative Policies and Procedures Memorandum, 
dated October 9, 1998. On March 16, 2001, it issued Draft 
Revised Housing Privatization Life Cycle Guidance for Service 
comment and review. After this review, final guidance will be 
issued.
    The methodology is a constant dollar analysis of two 
alternatives, privatization and a Milcon project identical to 
the privatization project. All costs must be included and; to 
help ensure accuracy, consistency, and simplicity; Milcon O&M 
costs will be determined from a private sector cost index. An 
economic analysis comparing long-term costs is required for 
both concept approval prior to solicitation and project award. 
The OSD policy is that the life cycle cost of privatization 
must be less than or equal to the cost of the military 
construction alternative.

                         Rising Utilities Costs

    Question. What impact is rising utility costs having on 
both completed privatization deals and those in negotiation? 
Additionally, how are the current privatization agreements 
structured to handle future spikes in utility costs?
    Answer. Projects are structured to allow member tenants to 
pay their rent and utilities costs entirely with their housing 
allowances. Generally, member tenant rents constitute their 
housing allowances reduced by 110% of their expected utility 
costs. The basic allowance for housing (BAH) includes the 
average cost of utilities based upon annual data surveys. Since 
surveys may lag a short period of time in capturing spikes, 
risk is involved in the estimated cost. Generally, members are 
at the risk that their BAH will be insufficient to cover 
utility bill spikes during this lag time. Developers must 
recognize this risk to their project income and account for it 
in how they price their projects.

                              Competition

    Question. It is Department policy that privatization 
projects must be solicited in a manner that promotes 
competition to the maximum extent possible. Each Service has 
their own approach for developing and soliciting privatization 
proposals. Some projects are very large which limits the number 
of participating developers to only those capable of executing 
large-scale deals. What steps are being taken by each Service 
to ensure competition is not limited? Are we getting the best 
deal for the taxpayer?
    Answer. Each Service has adopted the solicitation approach 
it feels best serves its program objectives. The Army uses a 
Request for Qualifications (RFQ) to select a developer based 
largely upon its past experience. The Army then works with the 
selected offeror to develop a Comprehensive Development and 
Management Plan. Army projects tend to be very large, full-base 
projects, and the Army believes that the RFQ provides the 
flexibility to design the optimal housing community for its 
members.
    The Air Force has adopted the concept of Privatization 
Support Consultants (PSC), to leverage its capacity to direct 
multiple solicitations while exercising appropriate oversight. 
The Air Force generally uses a three-step process to (1) narrow 
the field of offerors, (2) select a proposal based on best 
value, (3) work out administrative details and close the deal.
    The Navy uses a combined RFQ/RFP methodology, which is 
similar to the Air Force's three-step process. However, in the 
third step, the Navy enters into exclusive negotiations with 
the selected developer to finalize substantive deal points.
    In all three approaches the solicitations are open to all 
proposers. With the larger Army projects more construction 
capacity in required. However, it is common to gather a team of 
developers, builders, managers, and lenders. While smaller 
firms may not be able to compete and win the large projects 
alone, opportunities exist for smaller firms to team with other 
development entities to propose and be selected.
    Each Service is striving to ensure competition is not 
limited and to get the best deal for the taxpayer. Different 
solicitation and deal structuring methodologies are being 
developed, tested, and refined to ensure that the government 
obtains the best housing, with the least liability, and with 
the least amount of subsidy and guarantees.
    The goal is now to identify best practices in terms of both 
solicitations and deal structures. To this end the Program 
Evaluation Plan instituted by OSD will evaluate Service 
projects side-by-side to identify the relative costs, benefits, 
risks, and trade-offs, of the Service's approaches.

                            Lessons Learned

    Question. How are lessons learned from the initial 
privatization projects being incorporated into subsequent 
projects? Also, because each military service is responsible 
for its own privatization program, how are lessons learned in 
one service shared with the other services?
    Answer. Each Service has a well-established central office 
that has experience with previous solicitations and projects 
and which disseminates lessons learned to installations and 
source selection teams taking on their initial projects. Each 
Service has established or is establishing portfolio managers 
to oversee on-going projects which have been awarded. The 
Services have established independent relationships with 
contacts from the other Services with whom they can share 
lessons learned.
    OSD, is its program oversight role, also has contacts with 
the Service program offices and shares nonsensitive information 
concerning the projects of other Services and lessons learned 
in other source selections and projects. Finally, the recently 
instituted OSD Program Evaluation Plan will allow services to 
make side-by-side comparisons between their own projects and 
those of the other Services.

                           Community Housing

    Question. The Department's policy is to rely first on the 
private sector to meet the military's family housing needs. 
Yet, prior audit reports have reported cases where the 
communities surrounding some military installations could meet 
thousands of additional family housing needs. What steps are 
being taken to ensure that maximum use is made of civilian 
housing before new investments are made in military housing?
    Answer. In addition to developing a single, consistent DoD-
wide process for determining housing requirements, we are 
reviewing the benefits of using computer and internet resources 
to provide enhanced housing referral services. Military members 
reporting to new duty stations are often provided varying 
degrees of assistance in finding private sector rental housing. 
With two-thirds of military families living on the economy, the 
Department must do everything it can to promote the 
availability of safe, adequate, and affordable private sector 
housing. In order to maximize a military member's ability to 
seek adequate housing before departing their current duty 
station, DoD is developing an Internet-based housing referral 
system. This system will allow real estate managers to offer 
their properties to military members, which local housing 
managers will screen for adequacy, resulting in a more up-to-
date, user-friendly process for obtaining private sector 
housing. An additional strength of this system is that the data 
used in determining the Basic Allowance for Housing can be 
obtained from this consistent database providing a more 
accurate and readily available source of data for determining 
local housing allowances.

                       Housing Referral Services

    Question. Another tool that can help address the military's 
housing needs are housing referral services. In particular, the 
Navy has adopted an aggressive, or enhanced, approach to help 
families find housing in local communities. Could the other 
services' benefit from the Navy's approach to housing referral 
services, and if so, are plans in place for the other services 
to implement enhanced referral services?
    Answer. Housing referral tools can be exported to other 
Services. However, they must be looked at carefully to 
determine whether it is cost effective or applicable to the 
local housing market surrounding our installations. For 
instance, a large part of the Navy's homeport bases are located 
in metropolitan areas. Housing markets are large and well 
supported by the private sector. However, other Services 
contend installations located in rural areas with small and 
dispersed pockets of viable housing areas. We encourage the 
Services to share new initiatives and ideas for assisting 
military members in locating available private sector housing.

                  Coordination with Personnel Offices

    Question. To a large degree, privatization results in a 
shift in funding from military housing construction, operations 
and maintenance accounts to military personnel accounts to pay 
for increased housing allowances. However, there seems to be a 
continued lack of coordination with your personnel and 
readiness offices with regard to privatization issues. What 
steps are you taking to ensure better cooperation?
    Answer. Coordination with the personnel and readiness 
offices takes place in the context of the Department's Housing 
Policy Panel, the working-level group that includes all the 
Services and their associated housing and compensation offices, 
and the Installation Policy Board, the decision-making group 
chaired by the Deputy Under Secretary of Defense for 
Installations and his counterparts in the Services. As we 
continue to adjust our allowance accounts to reach zero out-of-
pocket allowances by 2005, the coordination between our offices 
has increased to ensure maximum consistency between the 
allowances and the housing needs of our service members.

                        Land and Unit Valuation

    Question. Under the current housing privatization 
authorities, DOD may convey or lease land, existing housing and 
ancillary facilities to an eligible entity for privatization 
deals. How does each Service value land and units with respect 
to the conveyance or lease of Government-owned property in 
privatization?
    Answer. Whenever appropriate, the Services prepare or 
contract for real estate appraisals to support valuations of 
land and units that are leased or conveyed by fee title. 
Generally, when land is conveyed with no limitation on its use, 
the land will be valued at the market value based upon 
comparable sales for its highest and best use. Where the use of 
the leased or conveyed property interest is strictly limited, 
as it is in many housing privatization projects, the value is 
based upon the value of the property's ability to generate 
income. This valuation is reduced by the value of the work that 
the government requires in order for the developer to take 
title to the property.
    [Clerk's note.--End of questions for the record submitted 
by Mr. Yim.]
    [Clerk's note.--Questions for the record submitted by Mr. 
Johnson.]

                      Future Housing Requirements

    Question. Before the military enters into a long-term 
privatization commitment, the military needs to know with a 
high degree of certainty the installation's future housing 
needs. To do this, the military must determine whether the 
installation will be needed in the future; and if so, then 
forecast the installation's future mission, military 
population, and family housing requirement. Yet, most service 
forecasts of these variables only cover a period of 3 to 5 
years. How can each Service assure that the housing in a 
proposed 50-year privatization project will be needed over the 
term of the agreement?
    Answer. The Army can not assure with complete certainty 
that housing will be needed for 50 years at Residential 
Communities Initiative (RCI) locations. However, there is a 
high degree of certainty that housing will be needed, and the 
Army does this by reviewing the most current and projected 
mission and troop populations for each site similar to reviews 
conducted prior to constructing family housing under the MILCON 
process. The Army Stationing Installation Plan (ASIP) is used 
to obtain the most current projections for troop strengths at 
RCI locations. The ASIP provides a five-year forecast and is a 
source document for all Housing Market Analyses. These analyses 
indicate the long-term requirement housing requirements at 
Army's RCI locations. Further, prior to building new units, the 
Army and its selected development partner validate the 
identified housing deficit. As part of this validation process, 
the Army and partner work closely with the local community to 
ensure that adequate, affordable off-post housing assets are 
not projected to become available in the community.
    Additionally, RCI projects are built to local standards so 
they may be easily assimilated into the local economy, and 
housing areas on the periphery of the installation can easily 
be transformed into private residential communities.
    Question: What exit strategies are built into privatization 
agreements should the Services need to reduce their requirement 
or get out altogether? What about the future on-base housing 
requirements?
    Answer. The Army's privatization projects will have similar 
exit provisions built into the deal structure as found in 
traditional military construction projects and other 
outscourcing contracts.
    The Fort Hood RCI transaction has multiple layers of an 
``exit strategy''. It is unlikely that the Fort Hood partner 
will attempt to abandon the partnership during the initial 
scope of project due to the construction guarantee. Beyond the 
initial development period, it is expected that the lender and 
Bank One will exercise their substantial influence to ensure 
Lend Lease does not depart. The lender and Bank One, who's debt 
is not callable, have an ongoing relationship with Lend Lease 
which is of great value to Lend Lease. Additionally, Lend Lease 
has an equity stake in the partnership for the life of the 
project. In the event that the lenders and the loss of its 
equity does not dissuade Lend Lease from exiting the 
partnership, the lenders will undoubtedly exercise their right 
to retain a general partner to ensure the safety of their loans 
and investments. The Army and Bank One must approve the new 
general partner.
    The process to replace a departing contractor, as opposed 
to a partner (e.g., the maintenance contractor) will be 
incorporated into the legal operating agreement which will be 
executed at closing. To terminate a contractor, there is a 
process that begins with the asset manager and proceeds through 
the major decision board, which the Army is a member.
    The Army cannot directly terminate a member of the 
partnership for its own convenience. Termination of any partner 
would require the partnership to be dissolved. The Army could 
terminate the ground lease for cause if a material breach of 
the Ground Lease Operable Documents is not cured by the 
partnership (or the project lenders). However, this would 
result in the dissolution of the partnership. Absent the breach 
of a material condition of the Ground Lease Operable document, 
the Army can only effectively terminate the ground lease by 
either breaching the partnership agreement or through 
exercising its right of eminent domain to condemn the ground 
lease.
    A breach of the partnership agreement would result in the 
potential payment of breach damages (i.e., the partner's 
partnership equity plus anticipatory profits). Exercise of the 
power of eminent domain would require the Army to pay the 
partnership the ``fair market value'' of the ground lease and 
any partnership improvements on the leasehold.
    The Army can influence a partner to leave the partnership 
since we control the performance awards that form a significant 
portion of the property management and development fees. Beyond 
the initial development period, if the Army is not satisfied 
with the developer's performance, execution of further 
development will not be approved.
    Other controls in place to further protect the interests of 
the government include escrow accounts, quality assurance and 
quality control oversight functions, and independent portfolio 
manager to monitor financial activities, review audits/reports, 
and conduct trend analysis of operations.
    In regard to future housing requirements, a comprehensive 
Housing Market Analysis is conducted prior to selecting a site 
for privatization in order to determine the long-term housing 
requirements. At sites that may see significant changes in 
their housing requirements, the Military Housing Privatization 
Initiative legislation provides the Army the authority to 
provide a loan guarantee against base closure, downsizing, or 
extended deployments. Further, prior to building new units, the 
Army and its selected development partner validate the 
identified housing requirement. As part of this validation 
process, the Army and partner work closely with the local 
community to ensure adequate, affordable offpost housing assets 
are not projected to become available.
    Should housing requirements decrease due to base closures, 
downsizing, or extended deployments, the developer can rent to 
persons other than military. This is based on a priority list, 
starting with currently assigned military and ending with the 
general public. RCI projects are built to local standards so 
they may be easily assimilated into the local economy, and 
housing areas on the periphery of the installation can easily 
be transformed into private residential communities.

                        Institutional Knowledge

    Question. What steps are being taken by each of the 
Services to institutionalize capacity within its offices for 
developing future privatization projects and managing long-term 
privatization agreements?
    Answer. The Army is taking several steps to 
institutionalize internal capacities for developing and 
managing privatization projects in the future.
    First, Army civilians in the RCI Office are gaining 
knowledge from lessons learned in the pilot projects and are 
developing best practices and skill sets that will be used in 
the follow-on projects. To ensure that we are making the most 
of lessons learned during the pilot phase of the program, more 
government personnel are participating/supporting the RCI 
program through developmental assignments. The new knowledge 
and skills that these government employees will carry forward 
when the RCI program is institutionalized will reduce the 
overall time and cost required to complete an RCI project, 
including reduced consultant costs.
    Second, to help Army civilians develop the requisite skill 
sets, the Army's RCI Office has encouraged its staff and other 
agency housing professionals to obtain specialized private 
sector training. RCI personnel have participated in the 
University of Maryland executive education program, specialized 
training developed by our consultants, the National Development 
Council's housing finance certification, specialized 
negotiation training, and the Institute of Real Estate 
Management's certified property management courses. The Army is 
continuing to learn from the pilot program and identify 
required skills that will help to shape future training 
requirements.
    Finally, it is important to remember that there is no 
substitute for real-world experience in the field of community 
development. Thus, the Army will continue to need private 
sector expertise in real estate services, investment management 
and property management.
    The Army, in conjunction with the Congress, will remain the 
major decision maker in all of its housing privatization 
projects. It will continue to depend on a combination of 
institutional knowledge and the skill sets of its government 
and military employees as well as the private sector 
consultants.

                          Rising Utility Costs

    Question. What impact is rising utility costs having on 
both completed privatization deals and those in negotiation? 
Additionally, how are the current privatization agreements 
structured to handle future spikes in utility costs?
    Answer. Rising utility costs has had little impact on the 
privatization initiatives which have been awarded, or those 
under development. The Army pays utilities at Fort Carson. At 
Forts Hood, Lewis and Meade, the service managers will be 
responsible for utility payments. Since the Basic Allowance for 
Housing (BAH) is reflective of rent and utility expenses in the 
surrounding communities, it should compensate service members 
for utility price increases, although the potential exits for 
an adjustment lag of approximately one year. Should future 
spikes in utility costs adversely affect the projects or the 
soldier's out-of-pocket costs, the Army may pursue other 
remedies to augment the BAH.

                              Competition

    Question. It is Department policy that privatization 
projects must be solicited in a manner that promotes 
competition to the maximum extent possible. Each Service has 
their own approach for developing and soliciting privatization 
proposals. Some projects are very large which limits the number 
of participating developers to only those capable of executing 
large-scale deals. What steps are being taken by each Service 
to ensure competition is not limited? Are we getting the best 
deal for the taxpayer?
    Answer. The Army has very large deals, and by employing the 
Request for Qualifications (RFQ) process, we have promoted fair 
and open competition in a manner similar to that found in the 
private sector.
    Using the RFQ process lowers the entry cost required for 
private sector offerors to compete. The proof that this process 
is working is the fact that the Army received more proposals on 
their RFQs as the programmed matured. Fort Carson (RFP) 
received six offers, Fort Hood received eight, Fort Lewis 
received nine, and Fort Meade received 17.
    The Army can be assured that it obtained the best deal 
because the highly-competitive RFQ process selected the best 
qualified developer to enter into a long-term business 
relationship. Also, the Community Development and Management 
Plan (CDMP) process incorporated a competitive process to 
significantly reduce:
     Construction costs--via competitive 
subcontracting.
     Financing costs--via a competitive analysis of 
several debt providers.
     Operations and maintenance costs--via competitive 
subcontracting (e.g., painters, landscapers, etc.) and by 
benchmarking fees against industry standards and integrating 
incentive payments versus fixed fees.
    The open-book nature of the CDMP negotiations lets the Army 
see all anticipated expenses. Finally, the Army hires expert 
private sector consultants to monitor development of the CDMP 
and provide advice related to private sector real estate 
operations, management, financing, incentive programs, etc.
    In addition, the Army conducted several program and 
procurement lessons learned sessions, and the Army is looking 
at a streamlined two-step RFQ process that will further reduce 
cost, and time requirements for both the government and private 
sector, as well as increase competition.

                            Lessons Learned

    Question. How are lessons learned from the initial 
privatization projects being incorporated into subsequent 
projects? Also, because each military service is responsible 
for its own privatization program, how are lessons learned in 
one service shared with the other services?
    Answer. Throughout the RCI program, we are using lessons 
learned from each of the pilot projects to improve the overall 
process. The lessons learned have helped the Army to save time, 
lower delivery costs and maximize opportunities for interchange 
between developers, the local community and the Army in the 
follow-on projects.
    To help identify lessons learned from the on going 
privatization projects, the Army has conducted Lessons Learned 
seminars to include attendees from Department of the Army, the 
Major Commands, RCI installations, future sites, and our 
development partners. A procurement Lessons Learned workshop 
was held in December 2000 to discuss ways to improve the 
procurement process. Key lessons learned include:
     The success of the Fort Carson project has proven 
that the 1996 Military Housing Privatization Initiative (MHPI) 
authorities that were provided by Congress allow the Army to 
build quality houses for Army families much faster and at less 
expense than traditional MILCON.
     To improve the procurement process and take full 
advantage of private sector expertise, the RCI program switched 
to a Request for Qualification (RFQ) process to provide greater 
flexibility than the Request for Proposal (RFP) process.
     More emphasis is being placed on identifying and 
resolving issues with key stakeholders such as local 
governments, school districts, businesses, employees, and 
soldiers and their families. The RFQ process provides greater 
flexibility to accomplish this.
     More focus is needed on schools and infrastructure 
upgrades.
     Installation commanders must become personally 
involved in resolving Impact Aid and taxation issues.
    Further, we continue to meet periodically with the 
Department and other military Services to provide program 
updates, share ideas, and review lessons learned from housing 
privatization projects.

                  Coordination with Personnel Offices

    Question. To a large degree, privatization results in a 
shift in funding from military housing construction, 
operations, and maintenance accounts to military personnel 
accounts to pay for increased housing allowances. However, 
there seems to be a continued lack of coordination with your 
personnel and readiness offices with regard to privatization 
issues. What steps are you taking to ensure better cooperation?
    Answer. The Army's RCI Office continues to fully coordinate 
all aspects of the privatization effort with the personnel and 
readiness offices. All housing privatization actions, including 
planning, programming and budgeting, are fully reviewed and 
coordinated by all Headquarters, Department of the Army 
agencies. The most significant example is the establishment of 
the Integrated Process Team (IPT). The purpose of the IPT is to 
provide a systems-based approach to implementing the RCI 
program that integrates near and long-term policy, planning, 
and execution for privatization of Army housing. The IPT 
consists of a Senior Official from each of the eleven different 
Army functional areas to include the Assistant Secretary of the 
Army (Financial Management and Comptroller), and the Assistant 
Secretary of the Army (Manpower and Reserve Affairs). This 
group meets periodically to jointly evaluate the RCI process, 
identify opportunities for improvements, and provide program 
guidance and policies. Through the IPT, coordination efforts 
have greatly improved the housing privatization transition 
process.

                        Land and Unit Valuation

    Under the current housing privatization authorities, DOD 
may convey or lease land, existing housing and ancillary 
facilities to an eligible entity for privatization deals.
    Question. How does each Service value land and units with 
respect to the conveyance or lease of Government-owned property 
in privatization projects?
    Answer. The Army is using the income approach for valuation 
determinations of the properties scheduled to be conveyed under 
the ground lease.
    For the purpose of determining the Present Value (PV) of 
the property covered by the Fort Hood ground lease the Army 
used the OSD recommended income or economic approach. An income 
based appraisal determines a property value as the PV of future 
cash flows expected to be generated. The income approach to 
valuation was selected because it is the preferred method of 
determining the fair market value of properties for which cash 
flow and tax savings are the principle benefits of ownership. 
For military family housing, the income approach considers as 
revenue the soldiers' Basic Allowance for Housing (BAH) not 
market rent. The term for the valuation is the duration of the 
initial development period, not the project term. The Army is 
using the income based approach for appraisal determinations 
related to properties scheduled to be conveyed under the ground 
lease.

    [Clerk's note.--End of questions for the record submitted 
by Mr. Johnson.]
    [Clerk's note.--Questions for the record submitted by Mr. 
Holaday.]

                      Future Housing Requirements

    Before the military enters into a long-term privatization 
commitment, the military needs to know with a high degree of 
certainty the installation's future housing needs. To do this, 
the military must determine whether the installation will be 
needed in the future; and, if so, then forecast the 
installation's future mission, military population, and family 
housing requirement. Yet, most service forecasts of these 
variables only cover a period of 3 to 5 years.
    Question. How can each Service assure that the housing in a 
proposed 50-year privatization project will be needed over the 
term of the agreement?
    Answer. We cannot provide absolute assurance that 
privatized units (or, for that matter, Government-owned 
housing) will be required over a 50-year period. However, the 
Department of the Navy's (DoN) privatization business 
agreements are structured in a way that allows DoN to increase 
or decrease the number of units in response to changes in 
military family housing requirements.
    Question. What exit strategies are built into privatization 
agreements should the Services' need to reduce their 
requirement or get out altogether?
    Answer. By virtue of the terms of the privatization 
projects, the business entity has the ability to respond to a 
situation where military family housing requirements are 
reduced for a limited period of time or permanently. If the 
reduction is for a limited period of time, the units would be 
available for rent to civilians. Should military housing 
requirements subsequently increase, referral priorities in the 
business agreements would ensure military or Department of 
Defense personnel are given the opportunity to rent vacant 
units before they are rented to civilians.
    In the event that the DoN decides it needs to get out of a 
project altogether, i.e., early termination, the business 
agreements executed with the private partner allow DoN to 
require the units be sold with the net sales proceeds returned 
to the partners as specified in the business agreement. In many 
cases, the privatized units are located on the fence line and 
can be easily isolated for rent to civilians or sale.
    Question. What about future (increases in) on-base housing 
requirements?
    Answer. Business agreements, used in conjunction with DoN 
housing privatization projects, are structured in a way that 
can accommodate increases in family housing requirements. For 
example, there is flexibility to build new units by the 
managing member, taking out additional debt, or using funds 
that have accumulated in project reserve accounts. Such actions 
would require DoN approval.

                        Institutional Knowledge

    Question. What steps are being taken by each of the 
Service' to institutionalize capacity within its offices' for 
developing future privatization projects and managing long-term 
privatization agreements?
    Answer. The Naval Facilities Engineering Command (NAVFAC) 
is both the acquisition agent and program manager for Navy and 
Marine Corps housing privatization projects. NAVFAC 
Headquarters and its Engineering Field Divisions (EFDs) 
continually review their organizational structure, procedures, 
and staffing to ensure there is sufficient capacity to execute 
the program and that there is a consistent, corporate approach 
to the development and management of projects.
    At the Headquarters level, general transition procedures 
have been developed for Navy and Marine Corps locations going 
from traditionally family housing management to privatization 
projects. Transition strategies for particular projects are 
developed during exclusive negotiations by a team composed of 
EFD, Headquarters personnel for Marine Corps projects, base and 
developer personnel. Member Advisory Boards have been designed 
to support the DoN member of the partnership with regard to key 
decisions over the live of the 50-year deal. Such boards would 
be composed primarily of local people such as the base business 
manager, housing director, ombudsman, and Command Master Chief. 
A Portfolio Management Group will be established to monitor the 
financial aspects of each agreement, deal with issues raised by 
the Member Advisory Boards having program significance, analyze 
the overall performance and financial stability of the 
projects, approve expenditures of project funds, and make other 
necessary decisions.

                          Rising Utility Costs

    Question. What impact is rising utility costs having on 
both completed privatization deals and those in negotiation?
    Answer. To date, existing Department of the Navy (DoN) 
projects (Corpus Christi, Everett I, Kingsville II, Everett II, 
and Camp Pendleton) have not been impacted by the increased 
utility costs as the projects include adequate utility 
allowances for the normal user. Similarly, utility allowances, 
based on normal utility usage, have been established for 
projects currently in negotiations. Those allowances will 
reflect the latest estimate of costs prior to award.
    Question. Additionally, how are the current privatization 
agreements structured to handle future spikes in utility costs?
    Answer. DoN projects are designed so that the Service 
member's Basic Allowance for Housing (BAH) covers rent and 
normal utilities. Increases in the cost of utilities should be 
reflected in annual BAH adjustments. The existing privatization 
deals, as well as those in exclusive negotiations, will provide 
a share of net cash flow to the DoN. These funds may be used to 
provide an interim ``back stop'' for the military family in the 
event of a spike in utility costs that would cause them to be 
out-of-pocket until the BAH is adjusted accordingly.

                              Competition

    It is Department policy that privatization projects must be 
solicited in a manner that promotes competition to the maximum 
extent possible. Each service has their own approach for 
developing and soliciting privatization proposals. Some 
projects are very large which limits the number of 
participating developers to only those capable of executing 
large-scale deals.
    Question. What steps are being taken by each Service to 
ensure competition is not limited?
    Answer. The private sector is advised of a proposed or 
potential privatization project by means of announcements 
placed in the Commerce Business Daily, the Wall Street Journal, 
USA Today, and other national and local media outlets. Mailing 
lists have been developed and are used to personally 
communicate with representatives from the financial and 
development communities and other known interested parties. In 
certain cases, conferences are held to present project 
requirements, DoN's business approach and the acquisition 
process. Finally, the solicitation document (``Request for 
Qualifications/Request for Proposals'') defines the project 
scope and requirements, DoN's objectives and priorities for the 
project, and the rules of the competition.
    DoN projects have been well received by nationally 
recognized developers as well as local and regional developers. 
The larger projects are receiving more responses from the 
national developers but the competition is not limited. The 
largest DoN project, San Diego, received responses from large 
national developers and from small developers who had teamed 
with partners with more national qualifications. Regardless of 
the size of the development team which submits a proposal, the 
products and services of regional and local subcontractors, 
suppliers and service providers will be required during the 
initial construction period and throughout the term of the deal 
as units are periodically recapitalized.
    Question. Are we getting the best deal for the taxpayer?
    Answer. Yes. To date, all DoN projects have met or exceeded 
the 3:1 leverage guideline and shown positive life cycle 
savings. Additionally, the DoN shares in all net cash flow and 
receives the majority of net cash flow from any ``up-sides'' 
the project might realize, including the planned increases in 
the Basic Allowance for Housing. Cash flow received by the DoN 
is available to renovate all units over the long-term to ensure 
safe, good quality and affordable housing for military families 
and for any other use determined to be in the best interest of 
the project, all without additional taxpayer contribution.

                            Lessons Learned

    Question. How are lessons learned from the initial 
privatization projects being incorporated into subsequent 
projects?
    Answer. The DoN holds quarterly public/private venture 
(PPV) Housing Transition meetings which include participants 
from existing privatized housing, representatives from 
activities that currently have projects in exclusive 
negotiations, and activities which have projects for which a 
Request for Qualifications/Request for Proposals is about to be 
released to the public. The two-day meeting provides an 
opportunity to exchange information, incorporate our best 
business practices into our business agreements and local 
housing procedures, and make the transition as smooth and 
transparent to the Service member as possible.
    Lessons learned are reflected in process changes and 
incorporated into template documents, including the source 
selection plan, the business points memorandum, and the 
operating agreement, including supporting documents such as the 
design-build contract, the independent architect contract, and 
the management agreement. Further, special attention is now 
being given to the full spectrum of residual management 
function, i.e., post-award contract activities, to ensure the 
successful operation, maintenance, and management of DoN 
projects.
    Question. Also, because each military service is 
responsible for its own privatization program, how are lessons 
learned in one Service shared with the other Services?
    Answer. We are sharing DoN privatization project 
experiences with the Office of the Secretary of Defense (OSD) 
and the other Services. For example, other Services are invited 
to participate in the Housing Transition meetings discussed 
above. We have also submitted our first Program Evaluation Plan 
(PEP) report to OSD. This report provides key data on awarded 
projects and a summary of lessons learned. Finally, we are 
meeting with representatives of other Services and OSD to 
discuss privatization issues that affect all Services, such as 
utilities, customer satisfaction surveys, etc.

                  Coordination with Personnel Offices

    To a large degree, privatization results in a shift in 
funding from military housing construction, operations, and 
maintenance accounts to military personnel accounts to pay for 
increased housing allowances. However, there seems to be a 
continued lack of coordination with your personnel and 
readiness offices with regard to privatization issues.
    Question. What steps are you taking to ensure better 
cooperation?
    Answer. Steps have been taken to improve coordination on 
privatization issues within the Navy and Marine Corps. On the 
Navy side, there has been a significant increase in 
communication between offices responsible for family housing 
and military pay so that the latter is kept informed on all 
housing privatization matters that would affect Basic Allowance 
for Housing (BAH). This would include projected BAH impacts on 
all current and planned public/private venture (PPV) projects. 
Further, the Manpower and Personnel Office is now represented 
as a member of the Navy's Family Housing Integrated Process 
Team.
    Likewise, on the Marine Corps side, several processes and 
organizational changes have been implemented to achieve more 
effective coordination between the Family Housing and Military 
Personnel Office. The Family Housing Program Evaluation Group, 
which is responsible for the development of long-range plans, 
including the preparation of the Future Years Defense Plan, is 
co-chaired by representatives from the Family Housing Section 
and the Manpower and Reserve Affairs Department. This 
arrangement ensures that the two offices work closely from the 
inception of privatization projects. Further, the Family 
Housing Office distributes updated information within the 
Marine Corps through multiple media sources to give greater 
visibility to the privatization program. Briefs are regularly 
given to the senior leadership to keep them apprised of the 
status of privatization efforts, quarterly reports prepared for 
Congress are distributed throughout Headquarters, and proactive 
coordination is maintained between action officers in the 
Family Housing and Manpower sections.

                        Land and Unit Valuation

    Under the current housing privatization authorities, DoD 
may convey or lease land, existing housing and ancillary 
facilities to an eligible entity for privatization deals.
    Question. How does each Service value land and units with 
respect to the conveyance or lease of Government-owned property 
in privatization projects?
    Answer. There are two different categories of Government-
owned land utilized in Department of the Navy public/private 
venture projects.
    Category 1: Existing Department of the Navy (DoN) land that 
will be transferred in fee to the private sector, with the 
proceeds from that transfer used to carry out privatization 
activities. The appraised land value has been used in this 
situation. It is valued at ``highest and best use,'' as 
preliminarily determined by third party appraisals and 
validated in the market place.
    Category 2: Existing DoN land that will be used for the 
siting of new privatization units. The value of such land is 
determined by the use restrictions, limitations, encumbrances 
and requirements imposed on the property by the Government as 
described in the lease and associated business agreement. The 
restrictions, limitation and encumbrances define the ``highest 
and best use'' of such land. In this case, the value of the 
land is a function of the income stream produced by the rental 
units that sit on the land, and the value of the underlying 
land.
    The valuation of existing units to be privatized, including 
their underlying land, is also a function of the income streams 
that can be generated from the units. The income streams are 
based on occupancy at prescribed rents. The use to which the 
units can be put during the term of the deal is limited by the 
contractual agreement. Accordingly, value is calculated as the 
supportable debt generated by the income streams from the units 
less the renovation to the units that must be carried-out to 
bring them up to an acceptable standard.
    [Clerk's note.--End of questions for the record submitted 
by Mr. Holaday.]
    [Clerk's note.--Questions for the record submitted by Mr. 
Dishner.]

                      Future Housing Requirements

    Question. Before the military enters into a long-term 
privatization commitment, the military needs to know with a 
high degree of certainty the installation's future housing 
needs. To do this, the military must determine whether the 
installation will be needed in the future; and if so, then 
forecast the installation's future mission, military 
population, and family housing requirement. Yet, most service 
forecasts of these variables only cover a period of 3 to 5 
years. How can each Service assure that the housing in a 
proposed 50-year privatization project will be needed over the 
term of the agreement?
    Answer. Forecasting beyond 5 years is always difficult. 
However, the Air Force commitment in a 50-year privatization 
deal is no greater and actually may be less than the commitment 
for a traditional military construction (MILCON) project with 
follow-on operations and maintenance (O&M) funding. Unlike 
traditional MILCON, a privatization initiative shifts most of 
the risk of owning housing to the private sector. Should the AF 
requirement for privatized housing decrease, then the developer 
can make units, no longer required by the Air Force, available 
to members of the civilian community.
    In the extreme, should the Air Force decide to close a 
base, and a developer is unable to rent the units to members of 
the civilian community, then the Air Force exposure would be 
limited to the unpaid principal amount of the loans guaranteed 
by the Air Force. This exposure typically is much less than the 
Air Force would have invested in traditional MILCON and O&M, 
and is further reduced each year the private developer pays 
toward reducing the loan.
    Question. What exit strategies are build into privatization 
agreements should the Services' need to reduce their 
requirement or get out altogether? What about the future on-
base housing requirements?
    Answer. Under housing privatization, the Air Force does not 
lease the units nor do we guarantee occupancy as was done in 
previous housing programs. If the Air Force must reduce its 
mission or close the installation, then the developer has the 
option to continue operating the housing and make the units 
available to the local community. If the Air Force provided the 
developer a loan guarantee against base closure, extended troop 
deployment, or significant downsizing of the military 
personnel, then legal documents stipulate government liability 
for the remaining balance on the private first and the 
government second mortgages. Air Force liability is contingent 
upon the developer proving government decisions adversely 
affected his or her ability to operate.
    Many factors will influence how we address future on-base 
housing requirements. A future increase in on-base housing 
requirements must be addressed situation-specific and when they 
occur.

                        Institutional Knowledge

    Question. What steps are being taken by each of the 
Services' to institutionalize capacity within its offices' for 
developing future privatization projects and managing long-term 
privatization agreements?
    Answer. The Air Force has institutionalized its housing 
privatization process to cover the entire process from project 
concept development to project award to long term project 
management.
    First, the Air Force established the Air Force Center for 
Housing Excellence at the Air Force Center for Environmental 
Excellence to establish and maintain the Air Force corporate 
expertise and knowledge for housing privatization projects. Due 
to the lack of specific expertise in structuring housing 
development transactions, and the fact that the AF wanted to 
fix the housing problem sooner rather than later, the Air Force 
retained the services of consultants to assist with financial 
modeling, Requests for Proposal development, and proposal 
assessments and evaluations. Hiring this expertise allows the 
Air Force better management of resources and provides the 
required flexibility to surge and respond as needed.
    Second, for long term management and oversight of the 
privatization ``portfolio'', Air Force Center for Environmental 
Excellence (AFCEE) was also designated the Air Force Housing 
Privatization Portfolio Manager. The Portfolio Manager's 
primary duties and responsibilities, working in concert with 
the installation and Major Command, include, but are not 
limited to: data collection; trend analysis; monitoring; 
reporting; and problem resolution. This process covers the 
housing privatization project from project award through the 
life of the project.

                          Rising Utility Costs

    Question. What impact is rising utility costs having on 
both completed privatization deals and those in negotiation? 
Additionally, how are the current privatization agreements 
structured to handle future spikes in utility costs?
    Answer. There is no impact on either completed 
privatization transactions or those in negotiation or 
development. This is because the structure of Air Force 
transactions does not place responsibility for utility payments 
on the developer (once all the units are metered). Air Force 
privatization transactions place a reasonable amount of 
responsibility on the military occupant of privatized housing, 
comparable to that experienced by members who receive a housing 
allowance and occupy housing in the community. As such, the 
structure of transactions under development at this time will 
also not be significantly affected by rising utility costs.

                              Competition

    Question. It is Department policy that privatization 
projects must be solicited in a manner that promotes 
competition to the maximum extent possible. Each Service has 
their own approach for developing and soliciting privatization 
proposals. Some projects are very large which limits the number 
of participating developers to only those capable of executing 
large-scale deals. What steps are being taken by each Service 
to ensure competition is not limited? Are we getting the best 
deal for the taxpayer?
    Answer. The Air Force uses a two-step request for proposal 
methodology to competitively solicit its privatization 
initiatives. These requests for proposal are widely circulated 
so all qualified firms have an opportunity to prepare a 
proposal. In the first step, the qualification phase, proposers 
are screened to ensure they have the experience and financial 
backing to accomplish the initiative. In the second step, the 
technical proposal phase, the Air Force competitively selects 
the best value proposal. Smaller firms, unable to handle the 
workoad on their own, can partner with other firms to build a 
competitive proposal.
    The Air Force is getting the best value for its members and 
the best deal for the taxpayer by attracting and competitively 
selecting the most qualified companies with the best proposals.

                            Lessons Learned

    Question. How are lessons learned from the initial 
privatization projects being incorporated into subsequent 
projects? Also, because each military service is responsible 
for its own privatization program, how are lessons learned in 
one service shared with the other services?
    Answer. Following the closure of privatization initiatives, 
the Air Force holds a lessons learned workshop to formally 
document and discuss the experiences gained and outline process 
improvements for future initiatives.
    Regarding the question on sharing of information between 
Services: other military services are invited to these 
workshops and the Air Force attends like conferences sponsored 
by the other services to gain lessons learned. Additionally, 
the services meet periodically and with OSD to correlate 
information, procedures, policy and guidance. We will post our 
lessons learned on the Air Force Center for Environmental 
Excellence web site (http://www.afcee.brooks.af.mil/) in the 
next 90 days.

                  Coordination with Personnel Offices

    Question. To a large degree, privatization results in a 
shift in funding from military housing construction, 
operations, and maintenance accounts to military personnel 
accounts to pay for increased housing allowances. However, 
there seems to be a continued lack of coordination with your 
personnel and readiness offices with regard to privatization 
issues. What steps are you taking to ensure better cooperation?
    Answer. Throughout both development of the President's 
Budget submission and our Family Housing Master Planning 
process, we ensure future basic allowance for housing (BAH) 
requirements are adjusted for housing privatization 
initiatives. Our budget, personnel and readiness offices 
coordinate closely to ensure our near and long term budget 
strategy is responsive to actual and potential BAH increases 
due to privatization. Each edition of the Family Housing Master 
Plan is fully coordinated across the Air Force staff to ensure 
future BAH requirements are addressed. To date, these efforts 
have been very successful in accurately funding housing 
allowance increases.

                        Land and Unit Valuation

    Question. Under the current housing privatization 
authorities, DOD may convey or lease land, existing housing and 
ancillary facilities to an eligible entity of privatization 
deals. How does each Service value land and units with respect 
to the conveyance or lease of Government-owned property in 
privatization.
    Answer. Land to be conveyed is valued by independent 
appraisal. However, AF policy is to lease the government land. 
As such, for housing privatization initiatives involving 
leasing of land from the government, the land has a zero 
development cost since land purchase is not necessary.
    The fair market value of conveyed housing units is based on 
the income generating ability of the property, the value of 
these units is usually considered to be the net present value 
of the cash flow expected to be generated by the units before 
they are renovated.
    Ancillary facilities that are conveyed are valued at their 
depreciated value and reduce the government's cost of the 
development by that amount. In the case of morale, welfare, and 
recreation (MWR), Army and Air Force Exchange Service (AAFES) 
or Defense Commissary Agency (DeCA) owned facilities, the 
developer typically is required to pay the owning agency the 
depreciated value of the facilities.
    [Clerk's Note.--End of questions for the record submitted 
by Mr. Dishner.]
                                         Wednesday, March 28, 2001.

                          U.S. PACIFIC COMMAND

                               WITNESSES

ADMIRAL DENNIS C. BLAIR, USN COMMANDER IN CHIEF, UNITED STATES PACIFIC 
    COMMAND
GENERAL THOMAS A. SCHWARTZ, USA COMMANDER, UNITED STATES FORCES KOREA, 
    COMMANDER IN CHIEF, UNITED NATIONS COMMAND/COMBINED FORCES COMMAND
COLONEL ROBERT E. DURBIN, SPECIAL ASSISTANT TO CINC, U.S. FORCES KOREA

                       Statement of the Chairman

    Mr. Hobson [presiding]. The committee will come to order.
    This afternoon, we are going to be discussing military 
construction projects in the U.S. Pacific Command. Like its 
counterpart command in the Atlantic, the Pacific Command 
includes assets in countries and regions thousands of miles 
apart from each other. But what many people may not realize is 
the size of the U.S. military presence in the Pacific. All 
told, there are more than 300,000 Americans stationed in their 
areas of responsibility from Korea and Japan to Hawaii and the 
West Coast of the United States. We owe them decent and safe 
homes to live in and state-of-the-art facilities to work in.
    Economically and militarily, the Pacific is one of the most 
important areas of the world to the United States. And I think 
with some comments that have been coming out of the Defense 
Department, they are beginning to understand that a little bit, 
too, and some discussions that I have seen in the paper.
    For example, 35 percent of the U.S. international trade and 
34 percent of the gross world product comes from this area. 
Militarily, the Pacific area of responsibility comprises more 
than 50 percent of the Earth's surface and 60 percent of the 
world's population. Six of the world's largest armed forces are 
in this theater. Five of the seven U.S. mutual defense treaties 
are maintained with allies in the area.
    For these reasons and others, it is clear the United States 
has a vital interest in preserving peace and commerce in the 
area and will continue to play a significant role in the area 
for many years to come.
    This year, the subcommittee is focusing a little more on 
overseas military construction and the importance of the funds 
to our troops located so far from home.
    Two weeks ago, General Joseph Ralston joined us to talk 
about the importance of overseas military construction in his 
area of command. Today, I am very pleased to welcome Admiral 
Dennis Blair, the commander in chief of the Pacific, and 
General Thomas Schwartz, the commander in chief of U.S. and UN 
forces in Korea, to the subcommittee.
    Both Admiral Blair and General Schwartz have come a long 
way to be with us, and I know the subcommittee joins me in 
thanking you for your efforts.
    As the fiscal year 2002 budget process begins, the 
subcommittee looks forward to hearing from you both about the 
construction challenges and priorities you have, about the 
conditions of existing facilities and about what other quality 
of life issues that you and your people face.
    Your prepared statements will be entered into the record as 
though read. Before I ask you to summarize them, my ranking 
member is not here at the moment, but, Mr. Edwards, I am going 
to ask him, who is taking his place for the moment, if there is 
any statement he might like to make.
    Mr. Edwards. Mr. Chairman, Admiral Blair and General 
Schwartz came further than I did for this hearing today, so I 
just want to join you and other committee members, staff, in 
thanking you both for coming here.
    And I really want to commend you, Mr. Chairman, for your 
special focus on the need to improve housing in our overseas 
military operations and installations. It is important, and I 
commend you that.
    And thank you both for being here. I think your testimony 
will be very significant to us. Unlike when you are trying to 
build aircraft carriers or new tanks or Air Force jets, you do 
not have subcontractors in 50 states lobbying on behalf of 
family housing needs, especially when those family housing 
needs are overseas. So it is terribly important that you are 
here. Thank you for taking the time out of your schedule, and I 
look forward to hearing your testimony.
    Mr. Hobson. Admiral Blair, you are up.

                  Statement of Admiral Dennis C. Blair

    Admiral Blair. Yes, sir. I think this is a great 
opportunity, and I appreciate being able to be here. In recent 
years the department has really concentrated hard on readiness. 
There has been a lot of attention for that, asyou know, 
hearings, funding. There has been a lot of concentration, and 
justifiably so, on compensation, pay, benefits. And of course, there is 
always concentration on modernization, building for the future.
    There really has not been concentration on the camps, 
posts, stations and bases where we live. And so I think this is 
really long overdue.
    Let me just give you three quick vignettes that illustrate 
where we are in the Pacific. Last summer, the Disney studio was 
out in the Pearl Harbor area filming the movie ``Pearl 
Harbor,'' which is going to be opening here next month, in 
Hawaii. I was over watching filming, and the director said to 
me, ``Admiral, this is great, to film an historical movie here. 
We do not have to change a thing.'' [Laughter.]
    And he was excited about it. I was embarrassed.
    I was commanding officer of the Pearl Harbor Naval Station 
12 years ago. I now live on that base. And it is in worse shape 
now than it was 12 years ago when I commanded it.
    Last month I was in Alaska at Elmendorf Air Force Base. An 
officer who worked on my staff is now the wing commander at 
Elmendorf. And he told me that he has a rapid reaction team to 
deal with steam leaks in these utilidors, which are these 
buried steam and electricity cables that are going around 
Elmendorf. He has to repair a steam leak quickly because, if he 
does not get to it, steam pressure will go down, he will lose a 
whole section of base housing, and you will not be able to get 
back in it until the spring. And that is an actual concern to 
him, is the speed with which he has to make these repairs.
    Over in General Schwartz's area, Osan Air Base, that is the 
base that is the most under the gun of any Air Force base in 
the Pacific.
    Mr. Hobson. I know about Osan, a little bit about a house 
there, but go ahead.
    Admiral Blair. It is also the base that has the highest 
number of water breaks and power outages in the Air Force. So 
our most important, in many ways, base is the base that has the 
least reliable utilities and storage.
    So we can do better than this, Mr. Chairman.
    And so I welcome the attention of this committee. I welcome 
a visit which I hope you will be able to make here soon. And I 
applaud your efforts to call attention to these matters. And I 
am ready to discuss them in more detail, sir.
    [The prepared statement of Admiral Dennis C. Blair 
follows:]
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    Mr. Hobson. General Schwartz?

                Statement of General Thomas A. Schwartz

    General Schwartz. Thank you, sir, for being here.
    Let me just start off by saying, you know, this great 
alliance that we have in Korea with wonderful people has been 
going on for about 50 years. And they are great allies. They 
will stand by us. They will fight with us. And I am 
tremendously proud to be CINC in that part of the world, 
representing the soldiers, sailors, airmen and Marines, 37,000 
of them serving over there.
    And the incredible part about the 37,000 is 96 percent 
change every year; only four percent stay there for a two-year 
period. And so you can see the dynamic of change and how much 
focus it takes for a combined effort, like we have, with the 
great ally we do, to keep this whole thing going and spinning 
like we need to.
    They are ready to fight tonight, sir. We will do a great 
job. I want to reassure you of that.
    Before I talk a little bit, I would like to say, the Army 
transformation General Shinseki's doing is not just about new 
platforms. It is not just about more mobile, more lethal, more 
survivable. Those are great parts of it, but it is also about 
quality of life. It is also about the well-being of soldiers, 
sailors, airmen and Marines, in this case, with the Army, the 
soldiers, but it is about trying to improve their quality of 
life and the sort of things we are going to talk about today. 
So we are transforming in that way, also.
    This whole thing today is really to try to tell you a 
couple of stories about bettering the quality of life of these 
great people. And I always talk about balanced readiness. And I 
say, it is about training, yes, but it is also about quality of 
life. It is also about infrastructure. And those are the kinds 
of things we are here to talk about today, and I appreciate 
that.
    Every time I talk to the soldiers about those kinds of 
things, I see good in their eyes and I see bad in their eyes. I 
see a little hurt in their eyes sometimes, because they tell 
me, the good things are, they like Korea. They like the 
challenge. They like the training. They like the things you did 
for them, and Congressman Edwards, you did for them, last year 
in funding for the barracks.
    Mr. Hobson. I do not think they like the weather sometimes.
    General Schwartz. Sometimes they do not like the weather. 
[Laughter.]
    In fact, it kind of was nice to get back here to a little 
warmer weather, but it is still cold in Korea.
    Mr. Hobson. Especially when the roof leaks in a dozen 
places.
    General Schwartz. The barracks are good. The flood money 
you gave us did wonders. When you come, Congressman, and see 
what we did, and we are proud of it. We are proud of the $250 
million.
    But, you know, hope is not a method. We cannot hope for 
more rain so we get more money. We had to have a program. We 
have to be able to come and articulate to you what our needs 
are. We hope to do that today.
    And the RPM you gave us last year, the increase, $39 
million increase in RPM. When I called the commander, theater 
commander, and I said, ``Listen, you have $39 million that you 
did not have before.'' And he started talking about what he was 
going to do with it. He started talking about fixing barracks. 
He started talking about heaters. He started talking about 
leaks. Those are the kind of things that really have a powerful 
impact, right here and now, on the great soldiers, sailors, 
airmen, Marines on that peninsula. So it made a difference, and 
we deeply appreciate that kind of money.
    But what they tell me they do not like, they do not like 
the substandard living; they do not like the Quonset huts. They 
do not like some of the quality of life things. And they do not 
like the hurt that they have a little bit of being separated 
and the cost that it takes.
    I remember talking to you and, I think you, Congressman 
Edwards, about some of this hurt. We have the separaterations. 
When we take it away from the spouse back home, that equates to about 
$4,000 a year that she does not have that she had when he was home. And 
that puts a hurt on her financial planning and on that household. And 
then when you put the hidden costs on top of that for these soldiers, 
sailors, airmen, marines just to exist over there, day to day, food, 
TV, phone calls back home, you add it all up, it is another $4,000. It 
is $8,000 to $10,000 out of their pocket, they are going to serve their 
country. They are not complaining too much about it, but it hurts.
    I can remember when my wife, in 1976, wrote me a letter 
saying, and I was there alone, ``quit writing checks because it 
is hurting us.'' It was hurting back home. If it hurts a Major, 
that I was, in 1976, it sure hurts a Sergeant. And so these 
associated costs, we call them hidden costs and separate rents, 
are putting a hurt on these people when they serve their 
country. And I hope we can turn that around in the long run.
    But I think it is the right picture. They love what they 
are doing, but there is a little hurt there, and I think that 
is where you can help us. And I appreciate your help.
    I wanted to tell you up front that the Koreans are doing 
their fair share. I mean, we have this Special Measures 
Agreement. And we set a goal for them. And we have said that, 
``X dollars, you need to achieve about 75 percent of that 
goal.'' They have, to this day, achieved about 41 percent of 
that. I have encouraged them this year to jump to 50 percent to 
55 percent. It looks good. We are in a Special Measures 
Agreement period here where we are beginning to negotiate the 
next three years. And so we are putting a lot of pressure on 
them to raise the dollar amount, to help us out with quality of 
life stuff, and I think it is going to pay dividends. So we are 
working on that side of it, too.
    But I have also done a thing called Land Partnership Plan. 
I am excited about it. And I think I explained it a little bit 
to you, Congressman Hobson, about trying to consolidate the 
bases and camps and stations we have in Korea. If you add them 
all together, there are about 95 of them. If you look at the 
major installations, there are about 46 of them.
    We are trying to take 46 of the major installations on the 
peninsula and consolidate them down to 25. That is a major 
effort. But I think we are going to gain huge benefits from 
that, not only in dollars and efficiencies, but in terms of 
force protection, in terms of stopping the encroachment that is 
going on in our training areas, increasing the training and 
readiness of our effort there on the peninsula. So I think it 
is a good effort.
    The Koreans are into this. We asked them to step up to the 
plate and pay for a lot of this, about $400 million, to help 
us, with no cost to the U.S. Government in this plan over the 
next ten years. It is a good plan. It is a win-win for us and 
for the Koreans. And so we are excited about that and I think 
it is a good effort to consolidate and do more efficiently and 
handle more efficiently the dollars that you give us.
    I broke MILCON, in my statement, down into three areas, 
quality of life, and I broke it down into infrastructure, and I 
broke it down to war-fighting readiness.
    On the war-fighting readiness side, if we can gain those 
dollars, we can harden some of our command and control bunkers, 
we would fix some of the airfields we have, the Osan Air Base 
the Admiral was talking about, and we could fix some of the 
logistic facilities that are being run down over the last 30 
and 40 years. So from the war-fighting side, we will do that if 
you give us more dollars.
    From the quality of life side, we will work on our barracks 
and our housing, our unaccompanied officers' quarters that we 
have neglected for so long, and some of our fitness centers and 
dining facilities. They need help, and we have to get the 
dollars in there. We have, kind of, neglected them too long.
    It reminds me of a little story. I had an Assistant 
Secretary of the Army visiting us in Korea. I took him into one 
of the houses. We had a wife, husband and two kids. He toured 
their 800 square feet, that they were living in. He came out, 
and he said to me, I will never forget it, he said, ``If they 
made me live here and I were that Captain, I would leave the 
Army.''
    And I said, ``I am going to quote you on that.''
    And he said, ``I do not care how many times you quote me. I 
would not be in the Army if you made me live here.''
    And it, kind of, made me think, ``Well, we are making this 
guy live here.''
    And so, it is not good. We need to fix some of that. We 
have some good plans to do that with our housing effort and 
some of the things we are looking with you at, Congressman 
Hobson, to do some leasing and some innovative things in Korea 
that we have not done before. And I think it is going to pay 
huge dividends for our people.
    So I would just say, in the end, that this opportunity to 
be here today is a great opportunity for Admiral Blair and 
myself. And we hope that we can champion the cause of the great 
people, because we love them, and that is the reason we serve 
like we do.
    Thank you very much.
    [The prepared statement of General Thomas A. Schwarts 
follows:]
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    Mr. Hobson. Well, thank you, General.
    I would like to make a couple of comments about a couple of 
things, and maybe ask a question about it. I do think we need 
to be more innovative, and the Koreans are very innovative 
people. I am concerned that we give up land too early, then we 
never get the land that is promised later. And we have to 
struggle over that. And I think you gentlemen know the history 
of this better than I do. But I want to put people on notice, 
that I do not think Congress likes that.
    I also think we need to figure out how to do some way, and 
I have been told this is difficult to do, but I think there 
ought to be a way to figure out how we find ways that we build 
housing or they build housing or somebody builds housing that 
we can lease from them in a facility or off of a facility. I do 
not care, as long as it is, you know, secure from our 
standpoints. But there needs to be some creative ways to do 
that. And they need to work with us.
    I think there has been some hesitancy in the past or some 
rules or some regulations or something by them that have 
inhibited our ability to do that. And the Koreans are wonderful 
people. I have been there before. They are a good ally. But 
they have to remember that our kids, you know, most of the kids 
do not really want to be there. They would like to be at homes 
with their wives and their mothers. And they are making a 
sacrifice to be there. And I think there has to be a better 
understanding of our role if we are going to continue to stay 
there. And I believe we will be there in their defense for a 
long time to come.
    But I think that this cannot be just a one-way street. And 
I think this committee, and I am sure Chet and Sam and the 
Republicans all agree, we are willing to help you in trying to 
be creative to get this kind of housing. And I do not want to 
do it five years from now. I want to figure out a way to start 
doing this sort of thing now.
    And I have had some people come to me and say, ``You know, 
we would like to be there. We would like to help.'' I do not 
have any particular people or bias in this. My bias is, I want 
to get it done.
    And I am going to show you a picture. This is a picture of 
a guy, how he lives in Korea. If you will notice, on the one 
side is a toilet and his door and then a basin. And that is the 
way this soldier was living in Korea when Brian was there.
    And I have also told the story, which has been embarrassing 
to the Army in the past. And they tried to find this thing. And 
they say it does not exist. But I told the story about the kid 
that was fixing a fire in a building when I was on a retreat 
here. It was an Army troop here. And he said he had been in 
Korea. And I said, ``Well, your housing must have been pretty 
bad.''
    I told this to the chief at a defense hearing. And he said, 
``Oh, no, sir. My housing was not too bad. I lived in condemned 
Air Force housing in Korea.'' [Laughter.]
    Well, the Army went all over and was extremely embarrassed. 
And said, first of all, I never got that kid's name, so they 
were not able to find him or he would have been dead. 
[Laughter.]
    But they said, ``We do not live in any condemned Air Force 
housing.'' So what it may have been was housing that the Air 
Force had released to the Army. But I thought it was a rather 
interesting story, so I would just repeat it for you guys.
    I think Korea has been a challenge for some years. And we 
want to make a difference.
    Our chairman, Mr. Young, has been very interested in doing 
this. He has been there. He is coming back. I am going.
    I am hoping that my colleagues in the Senate become as 
concerned about this as we have been. They have been a little 
more forthcoming in Korea and the Pacific than they have been 
in Europe.
    But I do not object to the coming down to the 25 places as 
long as it is done in the right manner and we are not giving up 
anything and we are not getting anything in return. The Koreans 
are good negotiators, and we need to make sure that we are as 
good at negotiating at our contracts when we do it.
    I was going to ask the question and you answered it to a 
degree: I am concerned about, I have always been concerned 
about, the host nation agreements that we have, in Korea 
particularly. And you are negotiating those now or when?

                       SPECIAL MEASURES AGREEMENT

    Admiral Blair. It is different in Japan and Korea, Mr. 
Chairman.
    Why don't I talk about Japan, and then General Schwartz can 
go on about Korea?
    You really have two categories. The special measures 
agreement covers the salaries of Japanese who work on our 
bases. In addition, it covers utility subsidies. That is about 
$3.5 billion a year, and it amounts to about 75 percent of 
those costs. And we have just negotiated those with the 
Japanese last year, we concluded an agreement.
    That agreement came down about 3 percent from the previous 
agreement, five years before, which we thought was fair in 
terms of the difficulties the Japanese economy has been going 
through. But it is roughly comparable.
    Their construction program, called the 
FacilitiesImprovement Program, FIP, amounts to about $800 million a 
year, and that builds new facilities. The United States has not had a 
MILCON project completed in Japan since 1989.
    Mr. Hobson. Does that include Okinawa?
    Admiral Blair. That includes Okinawa. Yes, sir, it does.
    So Japanese host nation support is the largest on a 
percentage basis and in absolute terms of any of our allies.
    The United States does pay for certain construction costs, 
primarily design, and features that are unique to U.S. bases, 
but that amounts to 20 million dollars a year. And then we are 
responsible for part of the operations and maintenance. 
Although, the Japanese workers are primarily paid by the 
government of Japan. That is our utility bill. That is how it 
works.
    Mr. Hobson. Who pays for the utilities?
    Admiral Blair. Japan pays for about 80 percent of the 
utility costs on our bases.
    General Schwartz. We are a little bit different, 
Congressman Hobson.
    We have a cost-sharing agreement with the Koreans. Like I 
said earlier, we set a goal of X dollars. They have to achieve 
75 percent of it. And then we measure them on their 
achievement. They have achieved, over the last five years, 
about 40 percent of it.
    Again, I have encouraged them. They have to step up to the 
plate. We expect them to jump up at least ten percent this next 
year, this next agreement. It covers about a three-year period. 
We hope to see that. We are encouraged by what we see in the 
early negotiations.
    But if you take the money they contribute under this cost-
share, we call it, special measures agreement, it breaks down 
to four areas: labor, logistics, Republic of Korea-funded 
construction, and then the combined defense improvement 
program, we call Combined Defense Improvement Projects.
    I will give you a feel for it. Last year, under those four 
categories, the Koreans contributed about $415 million. If you 
get inside of that, in terms of ROK-funded construction, which 
we use for quality of life type projects, and then the CDIP, 
which we use for war-fighting type project----
    Mr. Hobson. But that is all in that $415 million.
    General Schwartz. That is all in the $415 million. Those 
two add up to about $145 million.
    We get a MILCON each year of about $130 million.
    So one of the things somebody asked me, ``Is it one for 
one?'' It is not linked one for one. But they are, in fact, 
exceeding what we put in the MILCON each year.
    Mr. Hobson. But the $130 million is an average.
    General Schwartz. It is an average.
    Mr. Hobson. Because you put more than that in----
    General Schwartz. No, sir. Let me see if I can correct 
that. The average, believe it or not, over the time we have 
kept track of this, is $60 million MILCON. The reason that 
average has been drawn down like it is, $60 million, because we 
had five years with no MILCON. And that really throws the 
average off. So I do not think that is fair, in the sense of an 
average, but it is $60 million.
    Lately, over the last three years, we have been about $128 
million, $130 million, we are hoping for in 2002, about $132 
million. So we are hovering around $130 million, per year, 
MILCON, without any add-ons. That is just the going-in 
position. Last year you gave me an add-on----
    Mr. Hobson. Yes.
    General Schwartz [continuing]. That boosted it up, but we 
cannot count on those. We hope for them and fight for them.
    So the Koreans are doing, I think, a fair share. I mean, we 
are asking them for more, sir, and I hear you loud and clear. 
We need to have them step up to the plate. And believe me, the 
Secretary of Defense, when he talked to the president of South 
Korea, he asked for them to step up to the plate. So we are 
moving in that direction.
    Mr. Hobson. Okay. Chet, do you have a question you would 
like to ask?
    Mr. Edwards. Well, thanks again for your testimony and for 
being here.
    General Schwartz, let me just say on a personal note, we 
miss you at Fort Hood.
    General Schwartz. Thank you.
    Mr. Hobson. He may not recognize Fort Hood the next time he 
comes back. We have to rebuild Fort Hood when you come back, 
one of these days. [Laughter.]
    Mr. Edwards. We are grateful you are serving our country in 
Korea.
    In fact, Mr. Chairman, I would like to add to the record 
your photograph. This is a picture of a staff sergeant living 
in a 100-square-foot old Quonset hut, four sergeants living, I 
guess, in this one Quonset hut, and that 100 square feet does 
not include the fact that half your ceiling space is cut off by 
the curvature of the wall.
    And then to follow up on your comment about living, with 
family, in 800 square feet, I dearly love my 3- and 5-year-old 
sons, but if anybody made me live in a 800-square-foot facility 
with them, I know I would get out of Congress and anything else 
I was in at the time. [Laughter.]
    But this is unbelievable. This is a photograph, Mr. 
Chairman, that some spouses of Army soldiers in Korea hadshown 
me recently. This is the living room with the washing machine next to 
the TV, next to the cruddy, old sofa, in a terribly old-looking 
facility. The bathroom, you have to turn sideways to sit on the john 
because of the washing machine right next to it.
    I think we ought to be embarrassed, as a nation, that we 
ask men and women to put their lives on the line and then to 
live in barracks like this. Even if they are willing to do it 
to serve our country, we ought to be ashamed that we are asking 
them to do this, because this sends a message of how important 
we think you are. I wish, somehow, this committee could 
continue to try to sell to our colleagues in Congress that we 
do not have a budget surplus until we correct the 60 percent of 
substandard housing that our military families are living in.
    My specific question on Korea is what percent of our 
soldiers and their families are living in housing that does not 
meet DOD standards in Korea?
    General Schwartz. Over 50 percent does not.
    Mr. Hobson. You do not have very many accompanied people, 
do you?
    General Schwartz. No, sir, we have about six percent of our 
people that are accompanied and 94 percent are unaccompanied.
    But in terms of that 50 percent, how it breaks down, I am 
not sure. Overall, greater than 50 percent is unacceptable 
standards. So we have a long way to go to get it back where we 
need it.
    Mr. Edwards. All right. Okay.
    Admiral Blair, let's just take Hawaii, for example, the 
high cost of living there, what percentage of service men and 
women under your command, just specifically in Hawaii, are 
living on military installations versus off of those 
installations? And then what is the situation of those having 
to actually go out into the market for housing? How good or how 
bad is it?

                         Military Housing Costs

    Admiral Blair. If you look at Alaska and Hawaii together, 
there are about 62,000 members of the armed forces who are 
living there. Roughly half of those are married.
    We do not, as you know, have a goal or think it is right 
that everybody would live in on-base housing. We think we ought 
to be members of the community in which we live when there is 
good housing available, and there certainly is housing 
available in Hawaii and, to a lesser extent, in Alaska, because 
of the remote nature of some of the places.
    We try to ensure, however, that our people who are living 
in off-base housing are not out-of-pocket for that, rather than 
ones who live in on-base housing who then are charged their 
Basic Allowance for Housing but get housing, which, by 2010, 
will be adequate; about 40 percent of it is not adequate now, 
and, of course, utilities are included.
    Right now it costs people, in addition to their Basic 
Allowance for Housing, which might run anywhere from $500 to 
$1,800 a month, it will cost them another, somewhere from 22 
percent to as much as 50 percent over that.
    We have a goal now of increasing that Basic Allowance for 
Housing, including a variable allowance, which includes your 
cost of living, so that they will not be out-of-pocket, but we 
are not there yet.
    Our families who live out in Mililani or in Kaneohe 
routinely pay several hundred bucks extra per month to live 
there. The housing that they live in is fine. It is comparable 
to what Hawaiians live in, but they are paying extra out of 
their pockets for it compared to their same shipmates or people 
in the same squadron who live in base housing.
    Now, that base housing is not all adequate. If you come in 
from the airport into Pearl Harbor, you will see some wonderful 
new housing that is just a pleasure to see, pleasure to live 
in. It is not big. It is generally duplex or townhouses, but it 
is in accordance with Hawaiian standards.
    You go up in the back of Schofield, up in the center part 
of the island, and you will see some stuff that was used for 
filming ``From Here to Eternity,'' and it is still there.
    Mr. Edwards. It is going to be there an eternity.
    Admiral Blair. I hate to make all these movie references--
--
    [Laughter.]

                        Public-Private Ventures

    Admiral Blair. But you can do it. And that is not all going 
to be replaced by 2010, unless some of the Army's public-
private ventures (PPVS) come through in a pretty aggressive 
way.
    So we have a backlog in Hawaii, in Alaska. And certainly we 
have----
    Mr. Hobson. On Alaska, we are doing----
    Admiral Blair. A PPV there. Yes, sir, Air Force is. Army up 
in Fort Wayne, right next to Elmendorf, there is one 72-unit 
area that I am familiar with in particular that is 50 years 
old.
    Mr. Hobson. Can I interrupt you for a second, please?
    Do you think you can get the Army to look at something that 
small for a change, sir?
    Admiral Blair. For PPV?
    Mr. Hobson. Yes, because maybe you can, I cannot get the 
Army to look at anything less than 3,000 or 4,000, 5,000 units 
at a time. Maybe you would have more success in talking to the 
Army leadership down there to get them to do something other 
than the whole base deal.
    Admiral Blair. Let me look at that, sir.
    Mr. Hobson. I am suggesting they need an arsenal of things, 
not just one program, as they look at these things.
    Admiral Blair. Yes, sir.
    Mr. Hobson. So maybe an admiral in the Navy can have more 
effect on them than a chairman of a committee in the Congress.
    Admiral Blair. We are pretty joint these days, Mr. 
Chairman. [Laughter.]
    Mr. Hobson. Sorry, Senator.
    Mr. Edwards. No, Mr. Chairman. Thank you. I have used my 
time and would like to defer to other members, then. Thank you, 
Mr. Chairman.
    Mr. Hobson. Sam?
    Mr. Farr. Thank you, Mr. Chairman.
    Thank you, Admiral.
    Mr. Hobson. Yes, go ahead, and then Joe is next.
    Mr. Farr. I have been on this committee for 2 years, and I 
am still learning. And I just wonder, could you walk me through 
how we build on foreign soil? Do we buy it? Lease it?
    General Schwartz. Okay, that is a great question, sir. Let 
me tell you how we are doing it right now. Under the previous 
Status of Forces Agreement (SOFA) agreement, you could not 
build or contract to build on SOFA-granted land.
    Mr. Farr. What is SOFA?
    General Schwartz. SOFA-granted land is the status of forces 
agreement that we had in Armistice. It is negotiated 
periodically, but it is an agreement between two nations when 
you have a foreign country occupying one, how we deal with our 
soldiers, how we deal with the land, how we deal with housing.
    It has many different facets to it. But it goes to your 
question about, what does the SOFA say specifically about SOFA-
grant land, those pieces of land where we have servicemembers 
serving overseas.
    In Korea, for example, there are 95 camps and stations or 
little pieces of land that we own that are governed by SOFA 
rules.
    Mr. Farr. We own it?
    General Schwartz. We own it. In the sense that we own it, 
they gave to us to construct and accommodate and our people to 
live and train. So we own it in that sense, but we do not own 
it in the sense that it will not ever go back. It is under 
future negotiations. Periodically, it comes up for negotiation. 
We could lose it in negotiations, too.
    Mr. Farr. So it is kind of a lease.
    General Schwartz. It is kind of a lease, I think is a good 
way to look at it.
    Mr. Farr. And then when the buildings are built, who 
builds?
    General Schwartz. Once we get the SOFA-granted land, then 
we have, under the SOFA agreement, permission to build on it. 
We do not need their permission any longer to build our housing 
or our barracks. We inform them, as to what we are going to do, 
but we do not need their permission.
    Mr. Farr. Whose specs do we build them to?
    General Schwartz. We build to a combination of American and 
Korean specifications. So sometimes we will contract out back 
here, and we will have pure American-spec-built barracks or 
facilities. But in most cases, we go out and have Korean 
contractors come on SOFA land and build in accordance with 
their specifications.
    Mr. Farr. Well, here is my point: It is a shame that they 
are living in buildings like this, but it is probably even more 
shameful that we build them like that. I am trying to put this 
in perspective.
    And the BAH rent, $600 a month, if you try to go out in 
Washington and buy or rent an apartment on the Hill for $600 a 
month, you would probably get the same kind of a picture that 
you have right here. Part of the problem is the amount we are 
allowing for rent and the availability in private sector.
    But what really galls me is, when the government builds 
something, why it does not last.
    I live in a house, it was built in 1935, 1,200 square feet. 
Plumbing is the same. It was built for $1,500. Plumbing is the 
same. Electricity is the same. No remodel. And the house is 
worth $1 million today. That is because of the city it is in.
    Mr. Hobson. In California.
    Mr. Farr. But why we cannot build stuff that lasts, that is 
attractive?
    Help me walk through a couple of things here. On page 7 of 
your testimony, you are talking about here, near the last, 
second paragraph, bottom of the page, we need 28 new Quonset 
huts at the cost of $49 million per year over the next 10 
years. That works out to $1.9 million a unit.
    General Schwartz. That could be so.
    Mr. Farr. Where is the money going?
    General Schwartz. I can answer that two ways. One, these 
Quonset huts and these barracks that were built 30 and 40 years 
ago, they were designed for one year at a time. Wedid not see a 
long-term presence. We threw up these Quonset huts that were built 
locally, or even if we contract, most cases we contracted locally. So 
there was not the vision then that we needed long-term quality of life.
    But as we begin to stay year after year, now 50 years, and 
we begin to look into the future and think, ``My gosh, we might 
be here 50 more,'' we started to look at Korea from a different 
perspective and say, ``Hey, we need long-term, enduring quality 
facilities,'' not ones that kind of built to accommodate us 
this year and maybe we will go away next year. So it is a whole 
different philosophy.
    Mr. Farr. Are housing costs that expensive in Korea? And we 
use Korean labor? Or are these----
    General Schwartz. You know, some of these barracks we are 
talking about accommodate 300 to 350 soldiers. So when you talk 
about $1.9 million, if that is the case----
    Colonel Durbin. If I could? The unoccupied officer 
quarters, 28 units. A unit will occupy 48 officers, separate 
rooms. So you would take your number, sir, and divide it by 48.
    Mr. Farr. Okay. That is helpful. I appreciate that.
    Now, let's turn to page 8, because we get into the physical 
fitness centers and dining facilities. And you say, in bold 
letters, need to be replaced at the cost of $15 million per 
year over the next 10 years. And 21 dining facilities, we need 
immediate replacement at the cost of $14 million over the next 
10 years. And so on, it then goes down to $127 million over the 
next 10 years for physical fitness centers and so on.
    It just seems to me that we are paying more money than 
anybody would ever pay to build these kinds of facilities. And 
by the pictures, they are crummy facilities.
    General Schwartz. Well, the facilities we are talking about 
building are not anything like the facilities you see in the 
pictures. The facilities we are talking about are world class, 
and we have a few of them up, what we did with the flood money, 
and we have done with some MILCON.
    So they are totally different than what you see. What we 
showed you in the pictures were facilities that we built 30 and 
40 years ago that we are using and continue to use until we can 
get the world-class facilities that these figures demonstrate.
    So I think you would be proud if you came over and see what 
we are building. It is world class, and it meets the right 
specifications.
    Mr. Farr. What if we tried to do it different where we put 
up a pot of money that you are asking us for, and we put out a 
sort of bid with some generic statements, just say we want for 
this many soldiers, built for this kind of aesthetic quality 
look. People pay a good price when they live in nice places. 
And really, the private sector market could tell you how many 
they could build for that. You may get double your money.
    I am not really complaining about your command and the need 
for housing. What has upset me, from being on this committee 
and dealing with base closures, is going in and seeing how much 
we pay for such lousy stuff. And somebody has been making a lot 
of money off the Department of Defense.
    And it is either us, for not even knowing that we could 
build for higher standards----
    Mr. Hobson. Nobody ever asked what anything cost per square 
foot until we start going around. Now we have.
    Mr. Farr. The chairman has been on top of this. And this is 
something this committee has been jumping on. We are not going 
to allow it to continue to happen.
    My feeling is that you own the land or lease the land. You 
are exempt from all the local stuff. So instead of building 
lousy, we could build better, because we are not going to have 
the same cost. And you could use the best designs, coming out 
of the best schools in America, the best architecture and the 
best plans.
    The military bases that we build ought to be the envy of 
the private sector, not the other way around.
    General Schwartz. I agree with you.
    Mr. Farr. And soldiers ought to be--you know, you go out 
and ask soldiers, they would rather live off-base. That, to me, 
is criminal.
    We have the ability to build better than the private 
sector.
    General Schwartz. I agree with you there completely. And I 
think the stuff we are putting up, and the chairman knows this 
and when he comes, we will show it to you, is first class, and 
it is commensurate with those cost.
    I mean, they seem high to me. I cannot believe the cost of 
building anything today. But fact of the matter is, and I will 
look into it, to make sure that I do not think we are really 
being shammed here. But I do not think we are. I think we are 
getting some world-class stuff for the amount of money.
    But I would, to go a little bit further, the Chairman has 
really pushed me into this, after my last visit with him. He 
said, ``Tom, why do not you look at leasing, you know, off-
post, or build to lease in Korea?''
    Here is what we have done based on your guidance, Mr. 
Chairman, is, we had already gone in, and I did not know this 
when I saw you, requested for permission, which we need from 
Congress, to lease 800 units. We call them high-point units. 
They value at about $25,000 per unit, but they are quality 
housing for our people off-base. We have that permission. What 
we do not have is the money. I have to go back to myservice now 
and get $20 million for the 800 units. And I am working on that.
    But he said to me, the chairman said, ``Listen, what build 
to lease?'' And we could not do it under the SOFA agreements 
that I mentioned earlier. The new SOFA will allow us to do 
that. We have come to that determination now. We are going to 
turnaround and come back in for permission, build to lease, 
1,200 more units, based on the model that he had seen in Italy 
that he was very impressed with.
    What we are now picking up in that build-to-lease model. 
With the procedures they use in Italy, we are looking at it on 
the peninsula in Korea. And I think it gets more at what you 
are talking about, Mr. Congressman. And I think it is a wise 
investment and a better use of our dollars.
    Mr. Farr. Could you price out, per unit, of all of these 
statements in bold letters? And just for your own satisfaction, 
I think you will be surprised at what the prices are coming out 
to be. It seems awfully high.
    Mr. Hobson. I think what we will do now is, we will take a 
recess for a second. And we will be more than a second, because 
we have to go over and vote. There is only one vote.
    We are not going to let you off this easy, guys. We are 
going to come back and ask some more questions. I think Mr. 
Skeen has some, and I have a couple of other members who have 
indicated they are coming by. So if you would not mind waiting 
for a few minutes, we have to go do our duty here.
    [Recess.]
    Mr. Hobson. I think we will go to Mr. Vitter and then Mr. 
Skeen, when he comes back.
    Mr. Vitter. I am going to pass for now.
    Mr. Hobson. Pass for now? Okay.

                       REAL PROPERTY MAINTENANCE

    The real property maintenance, RPM, account is not part of 
this bill. However, it plays an integral role for military 
construction. Bottom line, poorly maintained facilities 
inevitably become military construction projects. In addition, 
there is nothing more frustrating than building a new facility 
only to have it require major work in a very short period of 
time because it has not been maintained.
    I would like you to talk a little bit about RPM. And I 
would also like to, maybe, just go back, while we are talking 
about this. You guys, with all of these problems, as far as I 
can tell, I know you go through this process, but you guys only 
ask for, like, $130 million a year, like, $80 million from the 
Army and $50 million from the Air Force.
    Am I right in the MILCON, when it comes through, is that 
what is in your budgets?
    Admiral Blair. For MILCON? No, sir, in the Pacific-wide our 
budget is about a billion----
    Mr. Hobson. Well, Korea is about $130 million. I am talking 
about Korea. I am not talking about Pacific. Korea is about 
$130 million.
    General Schwartz. Let me give you an example on that. In 
fiscal year 2001, with fiscal year 2002 dollars----
    Mr. Hobson. I know you did not make these up so I am not--
--
    General Schwartz. You are exactly right----
    Mr. Hobson. I am not casting aspersions on anybody 
personally. But I sit here year after year, and we have to deal 
with these problems, and then you all change, different stars 
show up. And the families, the people there are different, but 
some of them are not, but they are still in the service. We 
have to deal on a ongoing basis with numbers. Well, let me go 
ahead and give you my big frustration.
    My biggest frustration here was that the first bill I ever 
got as I was chairman of this committee, the Army did not ask 
for any CONUS housing. Now everybody has heard that a number of 
times, but I keep repeating it because I do not want it to 
happen again.
    And what everybody does is, everybody talks about quality 
of life. Everybody talks about how everybody has to live when 
we are out talking. But when we get down to asking for money, 
MILCON's the billpayer. Then we do adds, but we do not always 
know how to do the adds right. If we are going to do adds, 
people like to do them in their districts, and I was told that 
when I did overseas MILCON before.
    We do adds here on overseas MILCON, and we do not always 
really know how to do it because we have not always been to all 
of these places, like I have never been Korea before, but I 
relied upon what people told me about Korea and I relied on my 
chairman, who is a good guy, Mr. Young, about what we should 
do.
    My frustration is two-fold: one, that we do not ask for the 
right amount of money, and it necessarily does not go to the 
right place; and then we do not maintain it. And you know, and 
then the next thing we know we are diverting funds.
    Now for example, I am going to get a little personal on 
this. The admiral has a very nice office, I think. I have not 
seen it yet. [Laughter.]
    You did not build it.
    But he has a very nice office, but the wrong account money 
was used for that. Now I can tell you that anybody that does 
again, it is now an offense to do that, because we changed the 
law on that, because people were using the wrong monies for 
things that they should not be used for.
    I do not like to do that, but I do not know how to stop it 
other than that. So I know you guys would not do that, but 
somebody else might and some other people have in thepast. And 
they are nice people and, you know, they are good commanders I am sure.
    So my problem is, repairs and maintenance are a problem. 
Everybody I talk to tells me, ``We do not maintain our stuff 
like we should. It costs us more money in the long run because 
we do not maintain it, and it is an easy billpayer for other 
things.''
    We have to get our priorities right. And you guys talk to 
the people that make up these budgets. I really do not get to 
talk to them, that much, to who makes up these budgets. We do 
not get to interact with them. We react afterwards, and so what 
I am trying to do is send messages here because I do not have 
it yet. But you talk to these people. You know who they are. I 
do not.
    So what about the argument?
    General Schwartz. Let me comment on Korea then and Admiral 
Blair can comment on his area.
    Addressing two perspectives, SRM and MILCON, in fiscal year 
2001 we went into the Army, MILCON for Korea, and we asked for 
$250 million. After it all goes in and so does everybody else, 
the Fort Hoods of the world, all the MILCON requirements come 
into the Army, they have a certain pot of money and they 
validate it for us. We requested $250 million. They said, 
``Schwartz, your fair share of what money we have is $138 
million.''
    So $138 million is what comes to you and I think, 
Congressman, what your frustration is that, ``Schwartz, you 
asked for $250 million; I only saw $138 million.'' But the 
Army, in its process, because we have an Assistant Chief of 
Staff for Installation Management, a person, a general, who 
manages this whole thing, looks at all of the demands, CONUS or 
OCONUS, and he, kind of, has a certain pot of money, and then 
he goes forward with what he can fair-share to me.
    And my fair share of fiscal year 2000 funds was $138 
million. I asked for $250 million.
    I will give you another example of that in MILCON. This 
year, fiscal year 2002, I am asking for $260 million in MILCON. 
We do not have the numbers yet, but if you go by historical 
trends, we think that we will get about $121 million, $130 
million of that, I mean, just about consistent with the past.
    Mr. Hobson. Is that because you are not a good salesman?
    General Schwartz. Well, you know what, sir, I am going to 
get better. [Laughter.]
    I mean I need to do a better job of representing my case 
inside the Army. But inside the Army, and it may be the same 
for the other services, they do not have all of the money to 
meet everybody's needs so they, kind of, fair-share it. When it 
comes to you, you see my need as what I was given as my fair 
share.
    So I think that is a little bit of the problem from your 
perspective.
    Mr. Hobson. Is that General Van Antwerp that you are 
talking about?
    General Schwartz. General Van Antwerp does the----
    Mr. Hobson. Oh, I know him. I will talk to him.
    General Schwartz. Please, sir, because we need your help.
    But let me do the SRM, the same kind of thing. SRM, if we 
are asking, we have repair maintenance requirements for 2002 of 
$270 million, repair maintenance requirements, historically, we 
have gotten and we expect to get in about $80 million to $90 
million to cover a requirement that we can validate of $270 
million.
    So we are just not getting the amount of dollars we need to 
cover the kind of repair maintenance costs that we had. And 
each year they grow because you kick the can.
    Mr. Hobson. Do you know what they asked in the last three 
or four years?
    General Schwartz. This year we asked for $273 million. We 
think we will get about $80 million. Last year we asked for 
about the same, $250 million. We have $106 million. The $106 
million included, sir----
    Mr. Hobson. What about the year before, the add-on?
    General Schwartz. I am going to tell you, the $106 million 
included the add-on you gave me last year of about $39 million, 
that one, in my opening statement, I said what a great job that 
did.
    Mr. Hobson. What about the year before?
    General Schwartz. I do not know 1999, but I think it is 
about the same.
    Mr. Durbin. I think it has been about the same for the last 
five years, the figures that----
    Mr. Hobson. So we have underfunded RPM. We are just talking 
about your theater. Now, I am sure it is true in all of the 
theaters.
    General Schwartz. We get less than half of what we ask for.
    Admiral Blair. I think what happens, Mr. Chairman, is that 
you can always put a few more shingles on and a little more tar 
on the roof for one more year. So when it comes down to it, you 
have an emergent bill, you have to do a quick deployment, you 
have an accident and you have to repair that ship or plane or 
so on. You go and you look where your flexibility is and you 
say, ``Pull it out of the real property maintenance account and 
instead of replacing the roof, put a shingle on one more 
time.''
    And you can do that for any one year, but there comes a 
time when you have to replace the damn roof. And I 
thinkservice-wide----
    Mr. Hobson. But the problem is the roof. I mean, if you do 
not repair it right, the roof becomes a problem faster and is 
more rotten----
    Admiral Blair. Yes, sir.
    Mr. Hobson [continuing]. And leaks worse when you do not do 
the normal maintenance to it. It is robbing Peter to pay Paul--
--
    Admiral Blair. Absolutely.
    Mr. Hobson [continuing]. And it will cost you more in the 
long run. It is the same problem I have with some of the 
general officer housing that we have done over the years. We 
have changed that a little bit I think.
    But it is very frustrating to me, and we do not have the 
control over it, but I sit on the other committee. And I am 
going to put fair warning to everybody out there. In my other 
hat, I am going to start looking at the RPM.
    I have talked to the big chairman and to the chairman of 
the other committee, and we are not in this committee, I am not 
going to be able to do it, but I am going to start watching 
that a little more like I used to do trucks in the Army when I 
was over on the other committee. I am going to start looking at 
RPM, because I think we have to watch that to make sure that 
you are spending that money and it is not being diverted to 
things that you should come back and ask them to do.
    And it is too easy, I think, to divert that money because I 
am not sure that anybody is really watching you when that 
happens. And therefore, some things happen. I am not saying 
they are devious or anything. They just happen. And I think we 
really need to watch that RPM account.
    Admiral Blair. I think that we do in our personal budgets. 
If you are sitting there and keeping up your house, and all of 
a sudden your mother is sick and you have to buy a plane ticket 
to go back home, you are going to put off that repair, you are 
not going to paint the house for another year.
    I mean, we do it in our personal budgets I believe, and we 
have done it as a----
    Mr. Hobson. But we do not do it year after year. If we do 
it year after year, we are in trouble.
    Admiral Blair. Yes, sir, that is right.
    Mr. Hobson. And that is the problem we have here now.
    Admiral Blair. Right. That is where we are now.
    Mr. Hobson. You can do it one year, but if you do it year 
after year after year and it becomes a habit, then you are in 
real trouble. And I am very much concerned. And those are big 
accounts. The RPM----
    Admiral Blair. Right.
    Mr. Hobson [continuing]. The RPM accounts are rather large 
accounts, that I think, my personal opinion is, that nobody 
really watches them so they become easy billpayers.
    Admiral Blair. Our backlog is $7 billion Pacific-wide in 
SRM that has been deferred.
    Mr. Hobson. $7 billion?
    Admiral Blair. $7 billion.
    Mr. Hobson. Has anybody told the Secretary of Defense that?
    Admiral Blair. I am not sure we have told the new secretary 
of defense, but we have----
    Mr. Hobson. I wish somebody would because I talked to him 
the other day, and they were telling him about some of our 
backlog on housing and these things of that sort. And they were 
giving him some pretty big numbers. And I think somebody needs 
to give him this number, too. Because we can go out and build 
all of these weapon systems, but if you do not have the right 
facilities to fix them or repair them in and they are not 
maintained, you are not going to be able to fly those weapon 
systems or work out of facilities to get them back up when they 
go down. And everything goes down at some point.
    So I would encourage all of you. It is like I tell a lot of 
people, you have four stars. They are not going to give five, I 
do not think, sir. [Laughter.]
    And so you have to go in and fight for this stuff. And you 
are going to have to fight for your people. And just as we try 
to fight for the people, we have to have the right information 
to do the things. Now we did that for you last year because we 
thought we had good information. And I think, from what I can 
tell, you put the money to good use. But you need more.
    General Ralston needs more. We have not done anything over 
there for 10 years either until I did the supplemental for 
them.
    Well, I am not going to ask another question right now but 
the RPM is something that you all need to look at.
    Admiral Blair. I think one other thing, Mr. Chairman, if 
you would permit me for just a minute.
    Mr. Hobson. Sure.

                            OVERSEAS HOUSING

    Admiral Blair. I know, from your point of view, it is very 
difficult to spend money overseas if you have needs at home. 
But from where we sit, it is maintaining those troops in 
Hawaii, in Korea and in Japan that keep things pretty peaceful 
back at home.
    Mr. Hobson. Yes, look, no, no, not me. You do not have a 
fight with me. We have to fight with other people around here. 
But you do not have a fight with me, and I am the guy who had 
his head torn off over it.
    But I think what I need to do is enlist other allies in 
this. And you need to enlist other allies in this, becauseyou 
have to have a fighting force that is ready to go and they have to live 
in the right kind of facilities, both here and over there.
    And when you see some of the pictures like Chet had and I 
had, if the public in this country understood what some of 
these young people are being asked to do and how they are being 
asked to live, it is outrageous the kind of facilities that 
they are in.
    And I am trying the best I can on my watch to change that. 
I have a big chairman who has been very helpful to us in trying 
to do that.
    I can tell you I was very frustrated, not with you guys, 
but in the last time I went through this, I did not get any 
help from a four-star that I had asked about this when I called 
him to help me. And he said, ``I cannot help you.'' And the 
White House would not help me. And not this White House, but 
the last White House would not help me get that money. As a 
matter of fact, they fought me on the floor of the House and 
talked about some things that, I do not want to get back into 
that argument again.
    Hopefully, we are beyond that and, hopefully, we will all 
work together to make sure that this is a true fighting force 
that is well-housed overseas.
    Admiral Blair. I think that you know that the President has 
put about $1.4 billion, we do not know exactly where it is 
going, but he announced that he is putting extra money into 
quality housing, which is certainly worthwhile.
    We have not heard what our piece of it is, but he has 
announced that figure, which I think is excellent.
    Mr. Hobson. Well, I do not know if that is all. Well, it 
depends on how you determine the numbers on that. I am not sure 
it is all, per se, for construction.
    Admiral Blair. Oh, all right.
    Mr. Hobson. I do not want to give a false impression 
because we have the cameras here that may tell us. It may be a 
little different than that. And that is why I have asked the 
questions on this, questions about this, too. And you all need 
to ask the questions about what it means to your commands as 
far as that goes.
    Chet, do you want to ask another question?
    Mr. Edwards. Thank you, Mr. Chairman.
    General Schwartz, let me focus a couple of questions on you 
once again.
    You might have to make some assumptions. You might have to 
take general guess, but your educated guess would be better 
than any of ours. What would it cost in today's dollars if we 
wanted to turn around two years from now and say to every 
service man and woman and the families living in Korea that, 
``You are going to live in housing that meets DOD standards?'' 
Any ballpark figure what that would be?
    General Schwartz. Yes, sir, it is about, if you just 
isolate the housing piece of it----
    Mr. Edwards. Yes.
    General Schwartz [continuing]. Based on the authorization 
of housing we have right now----
    Mr. Edwards. Right.
    General Schwartz [continuing]. Then it would be $49 million 
a year for 10 years, about $490 million.
    Mr. Edwards. It is about $490 million for construction? 
That is either new construction or renovation, aside from other 
annual repair and maintenance?
    General Schwartz. Aside from that. Housing, we need 
adequate housing, tearing down some of the old inadequate, but 
building the new state-of-the-art, quality housing----
    Mr. Edwards. $490 million?
    General Schwartz [continuing]. Over the next 10 years.
    Mr. Edwards. Okay. And I wish it would not take 10 years. 
But if this chairman had his way, it would not take 10 years.
    Let me ask you this: One of the things we have not talked 
about as we have looked at this shoddy housing for both single 
soldiers and then the families, to me, part of the cost to this 
terrible housing is that a lot of families that ought to be 
together, husband, wife and small children, are separated for a 
year.
    If anybody gets 800-foot housing with my two kids, worse 
than that is if somebody told me I had to spend a year away 
from my two kids, that is not a job I would accept. So that is 
why I respect our service men and women for the sacrifices they 
make.
    First, maybe, what are the facts, in terms of the married 
soldiers in Korea, what percent of them are accompanied? What 
percent are not?
    And secondly, any way to guess: I am told anyway, by 
spouses, you have a very good education system over there for 
American children, if you had quality housing for all of the 
families that wanted to come over and stay together as a family 
rather than separate for a year and they have 3-, 4-, 5-, 6-, 
10-year-old kids, what percentage, do you think, would come?
    There may be some outposts for some remote place where that 
does not work, but if you could answer?
    General Schwartz. Yes, sir, right now ten percent of our 
married soldiers are provided an opportunity to have housing in 
Korea, only ten percent.
    Mr. Edwards. Only 10 percent, so 90 percent of them are 
away from their families----
    General Schwartz. If you go to Europe, it is 90 percent. If 
you go to Japan, it is 74 percent. If you go to Korea, it is 
only 10 percent.
    And so I had a vision over the next 10 years that we would 
increase that from 10 percent to 25 percent. So those figures I 
gave you, $49 million a year for ten years, that is an increase 
in housing available to married people coming to Korea from 10 
percent now to 25 percent.
    So that is a move in the right direction, I think, so more 
people could come and be accompanied.
    Back to your first question, though, how many people do we 
have in Korea on accompanied tours? Actually, it is 2,140 on 
accompanied tours. And that is about 6 percent because you 
have, unaccompanied, 33,096. You have on accompanied, 2,140.
    But of the 2,140 that are on accompanied tours, only 1,400 
are command sponsored. What that means is that 755 of them are 
not command sponsored. Seven hundred and fifty-five spouses 
made a choice, they were not command sponsored, but their 
husband, in some cases, could be. Male or female, the spouse 
decided, ``He or she is going to Korea, I am not staying back 
home alone. I cannot get command sponsorship. I am going 
anyway.''
    So what she does, in most cases, she follows on to Korea. 
She goes out in the local economy and tries to find an 
apartment. She usually does that, but she finds inadequate 
living quarters because you cannot afford the really nice 
places. That is one. But two, she is not command sponsored with 
her children, so therefore, I do not have a slot for her in my 
schools on post.
    Therefore, she has to make a decision, ``If they cannot get 
them into schools, what am I going to do?'' And most of the 
choices is home school. The problem with that is, a lot of 
these spouses are not qualified to home teach. And so their 
children miss out when they make choices like this, tough 
choices, almost 1,000 families in Korea, making those tough 
choices to home teach because we do not have room for them in 
the schools.
    To your third question, what kind of schools do we have? 
Quality schools. The Department of Defense schools for command-
sponsored people on the peninsula are some of the best in DOD. 
In fact, they win recognition every year, some of the best.
    It is an attractive feature for our people. In fact, I have 
heard people say, ``I would like to go accompanied to Korea 
because I have heard about the great schools over there.'' My 
children attended those schools and won scholarships back in 
the States as a result of it. They are quality, and we are very 
proud of what is going on in the schools we have, although very 
limited.
    Mr. Edwards. You said, going back to Europe, 90 percent of 
the married soldiers have their families with them in Europe. 
Is that correct?
    General Schwartz. Yes, sir.
    Mr. Edwards. Ten percent of married families in Korea have 
their families with them.
    General Schwartz. Right.
    Mr. Edwards. Would it be fair to assume that, maybe not 90 
percent, but 80 to 90 percent of families, if they had quality 
housing and good schools, would want to have their families 
accompany them to Korea?
    General Schwartz. I think it would be fair to say that more 
than we have now, ten percent. This vision I had, 25 percent by 
2010, 50 percent by 2020.
    Mr. Edwards. That is all budget constraints and obviously 
that is----
    General Schwartz. That is budget constraint, and that is 
why I did it that way, sir.
    Mr. Edwards. But if there were no constraints, if our 
country just said, ``We asked you to do too much. It is morally 
wrong to ask you to leave your wife, leave your husband, leave 
your children for a year, because we are not willing to spend 
the money for that,'' if everyone who wanted to be accompanied 
could go, what would be your estimate? Would it be 70 percent 
to 90 percent, 50 percent to 75 percent? I know that is a 
guess.
    General Schwartz. And it is a guess, but the thing about it 
is, we do not have the availability of land and, you know, it 
is the second most densely populated country in the world.
    Mr. Edwards. Right.
    General Schwartz. And so we are limited by space and our 
ability to build housing. So I think the vision I had of 25 
percent by 2010, 25 percent, 50 percent by 2020 is about as 
good as we can do.
    Mr. Edwards. As good as we can do given current 
constraints?
    General Schwartz. Yes, sir.
    Mr. Edwards. But basically, how many married families are 
there? You said 10 percent are accompanied, but what is the 
total number of married soldiers in Korea?
    General Schwartz. Two thousand, one hundred and forty 
accompanied servicemembers with their families.
    Mr. Edwards. That is, 21,000 soldiers are married, serving 
in Korea. So basically, we are asking 19,000 soldiers to leave 
their families for a year, and perhaps as many as half or 60 
percent, 70 percent of those would like to be with their 
families despite the distance away from their homes back in the 
continental U.S.
    General Schwartz. I think that is fair to say.
    Mr. Edwards. We are forcing families to break up for a year 
because we are not willing to spend resources.
    General Schwartz. Yes, and another thing that I would like 
to emphasize there is, it is not just one tour in a matter of a 
career.
    I was standing in front of these great soldiers in these 
sensing sessions I had with them, and I was so proud of the 
fact this was my third tour in Korea. And I said, ``Does 
anybody have me beat?'' And one sergeant, an E-5, stood up and 
said, ``Sir, I have 10 years in the United States Army. This is 
my fourth tour in Korea.''
    Another one, Staff Sergeant an E-6, stood up, and he said, 
``Sir, I have 12 years in the United States Army, and this is 
my fifth tour in Korea.''
    So, Schwartz did not have them all beat. A lot of these 
people have rotated themselves in and out of this assignment. 
Some of the low-density (MOSs) Military Occupation Specialties 
find themselves going back more than others, and we understand 
that we have that challenge in the Army. But the fact of the 
matter is, we are asking, you know, a lot of some people.
    Mr. Edwards. Some of them, if they were to do four or five 
tours and they had started out with young children, they would 
miss, you know, a third of their child's upbringing because of 
their unaccompanied tour to Korea, basically.
    General Schwartz. It could very well happen. In fact, it 
does happen.
    Mr. Hobson. Do they make rank faster by going to Korea?
    General Schwartz. You know, sir, the more soldiers, and it 
is really true for all services, the more their boots are on 
the ground, in the ships, flying the planes, the more they are 
doing to combat things that their MOS requires of them, the 
faster they get promoted, the better they do. That is the 
nature of our business.

                             HANNAM VILLAGE

    Mr. Hobson. I have two questions for you and one for the 
admiral.
    Tell me about Hannam Village. Explain what it is and what 
condition it is in.
    General Schwartz. Yes, sir. Hannam Village is where we 
house approximately 600 families. And it is a leased 
arrangement. We identified a piece of property just in Seoul, 
the heart of Seoul, but we did it many years ago. We built to 
accommodate 600 families. This is the one that I referred to 
earlier, in terms of, there is about 800 square feet per 
family, 400 on each floor. So when you go in and you just see 
one floor of 400 square feet, you have to go upstairs and you 
get another 400. And it is not good.
    In fact, the story we tell, and it is a true story, most of 
the spouses who come there and are command sponsored, walk into 
Hannam Village, enter the door, it is making me sad to talk 
about it but, sit down on the floor and cry and say, ``I am 
going to live here for two years?''
    They do it. They are great heroes and they do it. And they 
ought not be asked to do it.
    Mr. Hobson. Well, I am going to see it when we go over 
there, because we are going to change that.

                            UTILITY SYSTEMS

    Who is responsible for maintaining utility systems on your 
bases and in the housing? Do you do that or do the Koreans do 
that? I understand they are in pretty bad shape.
    General Schwartz. Utility systems, we do that, and we do it 
out of our own pocket. We pay all of the utilities for our 
housing, for our infrastructure, for our barracks. It is 
different than what Admiral Blair talked about. In Japan, it is 
different. It is paid for by the Japanese. And then, of course, 
it is a different system, again, than in Hawaii. I am not 
really sure what the arrangement is in Hawaii.
    Mr. Hobson. Okay, my question, I just could not understand, 
because I understand it is in pretty bad straits over there. We 
have a lot of utility systems around the world that are in bad 
shape. I understand it is particularly bad in Korea.

                                 HAWAII

    I want to go back to Hawaii. I have been there, looked at 
some housing a couple of years ago when I was out there. And 
recently I had to approve a lot of money, about an average of 
$300,000 a piece into about six or eight houses there, which I 
really did not want to do. As you know, from Osan, Korea, I do 
not really like putting that much money into dilapidated 
facilities when, we now have changed, though at the time the 
law had not changed, so I could not do it.
    But I am really concerned about the historic problems you 
have there. You have some peculiar other problems there, 
termites, certain types of ground, the humidity and other types 
of things that exist there, the salt water, climate. There are 
certain things we, I guess, should say, but I am really 
concerned about the money that is going to go away from housing 
for enlisted people and junior officers that goes into the 
preservation of certain types of historic properties.
    And I would like to know what is going on, especially in 
Hawaii. He does not have that particular problem in Korea. We 
have that problem here in the States. We have a couple of 
places in Europe. But the particular problem in Hawaii, can you 
elaborate a little bit on that and how you see what we are 
going to do in the future and what we are doing now?
    As you know, we changed the law. The law is now changed on 
the general officers' housing. You can now build a new general 
officer's house in excess of 2,050 feet. You could not do that 
until this year, I guess.

                           HISTORIC BUILDINGS

    Admiral Blair. Yes, sir.
    Mr. Hobson. But that has been changed, so that is not an 
excuse any more for people staying in these big old houses and 
our having all of this deferred maintenance on it.
    And I just sent one back for the Marine Corps, just so I 
could pick on everybody the same. They asked for a little 
increase on one of them, not too bad, but I wanted to know how 
much deferred maintenance is on that rather than buildinga new 
one. Because instead of putting $300,000 into an old one, if we put 
another $100,000, could be build a newer house that would last longer 
and not have the deferred maintenance on it?
    So I am concerned about, not only the houses, but I am 
concerned about the buildings, because you have some buildings 
that go back to World War II, some hangars and some other types 
of things that are not really functional for you.
    So would you like to elaborate on that? That is my pet 
peeve.
    Admiral Blair. No, sir, and I share it completely. I live 
in one of those big old sets of quarters, and I have over the 
years.
    Mr. Hobson. Has it got a nice kitchen?
    Admiral Blair. Not as nice as the one up the street. 
[Laughter.]
    And I will show it to you when you come visit there. We 
will go eat on the kitchen table.
    Fifty years is a stupid criteria for designating. If it is 
50 years, it is just old. It is not necessarily historic. I 
think historic things should have some, you know, something 
happen there or it is a particularly good building from an 
architectural point of view or from some other point of view, 
but right now there is an automatic 50 years, and that is 
historic.
    We just renovated the Commander in Chief, Pacific Fleet 
(CINCPACFLT) the Navy headquarters, historic building, and paid 
a premium on that. It is not a pretty building. Admiral Nimitz 
worked there. We could preserve some of Admiral Nimitz's area, 
and he is my favorite naval officer in history. And I would be 
very happy with a little reminder of Admiral Nimitz. And then 
he would have approved of knocking it down and building a new 
functional house for the kind of command and control that we 
need to conduct warfare in the future.
    The headquarters that I work in is a 50-year old hospital 
that we have been poking fiber optic cable through termite 
holes for 10 years now. And that is historic, and it should not 
be. I think we need to take on this legislation that creates 
historic houses and make a more common-sense criteria so we do 
not spend these premiums.
    I can tell you in my house, in particular, for example, 
when we needed to repair a concrete, outside entertaining area 
that we use, because that was historic, we had to pay $3,000 
for an architectural historian to come tell us that those 
concrete bricks could be taken up and replaced in roughly the 
same ways. It is crazy. It is a waste of money. We are paying 
premium for that.
    So, I have only become really aware of the cost of it 
recently, but I will be glad to take a systemic look at that 
and see whose legislation it is. Is it national? Is it state? I 
do not know.
    But, I think we ought to look at that and do sensible 
things rather than paying more money which, I agree with you, 
ought to go for places where we have more needs. And that is 
both, where we work and where we live.
    Mr. Hobson. Well, I think it is important to look at the 
law because I had a misunderstanding about the law myself. It 
was my understanding, in the beginning, you had to put a 50-
year old building on the historic list, but you do not. As I 
understand the law, it just merely becomes eligible. And what 
has happened in the past, I think, is because of the crazy law 
we had about general officers' houses to begin with, a lot of 
people put them on because that was the new way to keep them 
and that was where they could get the money to keep it up.
    It may have also been a way to put some other things on 
that people said, ``Well, if we put them on, then they are 
going to have to spend the money to keep them up.''
    But I think what we need to do is have your staff, the 
command officer staff, begin looking realistically at what, 
both in CONUS and elsewhere, we have problems with the SHPOs 
here, as to what is your requirement. The Navy has been pretty 
aggressive about it. And some of the SHPOs are pretty good. 
They are pretty realistic. Others are more difficult to deal 
with. But once you put it on, you are creating yourself a 
potential costly problem.
    Let me ask you one thing about Pearl Harbor. Is the entire 
Pearl Harbor area historic, or how do they have that 
designated?
    Admiral Blair. The figures I have here, Mr. Chairman--
    Mr. Hobson. You must have known I was going to ask that 
question.
    Admiral Blair. I am also interested in it. But we have 460 
Navy historic buildings. We have 544 Air Force historic 
buildings. Of those, I am not sure how many of them, the Navy 
houses, are historic, but on the Air Force side, 363 housing 
facilities of that 544 are considered historic.
    Mr. Hobson. Historic?
    Admiral Blair. Historic, yes, sir.
    So, we are talking pretty big numbers here, which then, as 
you know, every time you do anything to them, you have to have 
an expert in.
    Mr. Hobson. And I have written letters to the previous 
secretary. I have written letters to this secretary about this 
problem because it is only going to get worse. Those must be 
brown shoe Air Force facilities that are there, not the black 
shoe Air Force, if you want to say that.
    But it is a costly thing, too. Especially in Hawaii, where 
those houses were not built to withstand the certain kind of 
elements that are there that we would build a newfacility with.
    Admiral Blair. I have seen a lot of construction and many 
cases, heavy termite prevention costs, so I agree with you, Mr. 
Chairman, and I will take a look at that.
    Mr. Hobson. Okay. David, do you have a question?
    Mr. Edwards. I will defer to you.
    Mr. Hobson. I would like to talk a little bit about 
Okinawa. You have talked to another committee about moving some 
facilities and things of that sort. Why don't you just explain 
the situation in Okinawa a little bit, and if there is going to 
be a move, should there be a move, how do people feel about it?
    And we have had some difficult problems there, but it seems 
to be a place that we are going to be. And the Japanese 
government seems supportive. I am not sure the Okinawans are. 
Do you want to explain a little bit more about that from your 
perspective, sir?

                           Okinawa Facilities

    Admiral Blair. Yes, sir. It is a really important question, 
because it is a very important part of our deployed forces.
    We have an Air Force base there, Kadena Air Force Base, 
which is a key to reinforcing General Schwartz in case of a 
conflict in Korea. It is a key to reinforcing just about 
anywhere in the theater because of its location. It is 600 
miles from Taiwan. It is 300 miles from Korea. It is on the way 
to just about everywhere. So, Kadena is extremely important.
    There is also the 3rd Marine Expeditionary Force located 
there. And the 3rd Marine Expeditionary Force is really the 
force that is the leading edge of response to virtually all 
contingencies. Again, when General Schwartz has trouble with 
the North, these Marines hop across the Straits of Tsushima, 
and they do some very important jobs for him, early on, in any 
kind of contingency.
    The year before last, when there was some trouble in 
Indonesia and we thought that the 35,000 and some odd U.S. 
citizens might need to be pulled out, it was that force that we 
had ready to go from the 3rd Marine Expeditionary Force that 
was there. So, that is an important and importantly located 
force.
    The problem is that after the Battle of Okinawa in August 
of 1945, U.S. forces stopped where they were, which is 
basically in the southern part of Okinawa and settled down in 
those locations, places like Camp Foster, Camp Kinzer. And as 
the population of Okinawa has developed during that time, that 
is where the population has developed. So, when you fly over 
it, you are flying over an area of densely populated towns and 
then you come to a big, open area, and that is the Marine Corps 
air station, Futenma.
    So, after 1996, we had that terrible rape incident, and we 
got together with the Japanese government and formed an 
agreement to make a lot of changes. It is called the SACO 
agreement. One of those changes was consolidating some of the 
property and taking that Marine Corps air station and moving it 
from the populated, southern part of the island, up to the much 
less populated northern part, the section of Okinawa called 
Nago, which is a training area. Large parts of it are training 
areas. The towns up there are small. There is more room between 
them. It is as if you took a Marine Corps air station out of 
the Mall and moved it out to Dulles. It makes a lot of sense.
    That is being funded by the Japanese government to the tune 
of about $4 billion on top of the money that I talked to you 
about earlier, the $4.5 billion a year which Japan contributes 
to utilities and construction as well as to subsidizing 
Japanese personnel who work there.
    That is a good move. I think that, over time, as we replace 
those facilities, instead of replacing them in the south, we 
ought to move them up to the north, and it supports Japan as 
well, Japan's defense needs. But we ought to get it out of 
place where it is in the middle of a large Japanese city and up 
north.
    So, I think that general tendency that we are starting with 
Futenma Air Station ought to be continued. And so far, as I 
said, that is paid virtually entirely by the government of 
Japan.
    Mr. Hobson. Do you think the Okinawans are supportive of 
that move, or do they just want you out completely?
    Admiral Blair. The Okinawans, if you look at the polling 
data, are in favor of U.S. forces being there. Now, if you ask 
an Okinawan, they are no different from anybody else, if you 
ask them if they like having that jet engine lined up 75 yards 
away from their back fence, they will say, ``I would just as 
soon you move that jet engine, but I am in favor of you being 
here in Okinawa.'' So, I think we need to work this good-
neighbor policy along with the presence.
    It is also true that the Japanese government pays economic 
subsidies to Okinawa separate from paying for these forces. And 
a little bit of United States presence, there is a little bit 
of a tug of war between Tokyo and between Okinawa. So, some of 
what is going on here is local government of Japan there. But 
if you look at the polling data, the Okinawans are overall in 
favor of the U.S. presence, but they just as soon it not be in 
their own back yard.

                              Wake Island

    Mr. Hobson. Let me ask you another question about another 
place which you and I talked a little bit about before, Wake 
Island. Because as I understand it, it is in pretty sad shape 
as far as capabilities, and yet it needs to have some 
capabilities to support some things thatwe do. Why don't you 
talk a little about it so that we understand a little more about Wake 
Island, its significance to what we do?
    Admiral Blair. Yes, sir.
    If something big happens in Asia, we have two air bridges. 
We have one that goes across Alaska and through the western 
Pacific. There is another that goes across Hawaii. We put 
tankers in there. We go in there.
    If everything works absolutely perfectly, we do not need 
Wake Island, our computer models show we can do it. 
Realistically, nothing ever works completely perfectly. An 
airplane has a problem and it needs to divert to a field and it 
is left of Hawaii and has not come to Japan yet, it needs to go 
somewhere, and Wake Island is perfectly situated for that.
    Mr. Hobson. Since we are flying over there, I kind of hope 
it is there when we need it.
    Admiral Blair. Yes, sir.
    And during the course of last year, for example, 660 
airplanes dropped in there.
    Mr. Hobson. Is that right?
    Admiral Blair. So it is even used on a day-to-day basis. 
And if we really have to go heavy into WESTPAC, it will be used 
even more.
    What we need in Wake Island is bare functionality. We do 
not want nice quarters. We do not want our runway to have nice 
curbs and everything. We need to patch the cracks, and we need 
to put in the fuel that we can use functionally. And we need to 
do some bare-bones things.
    Unfortunately, those bare-bone things are going to cost on 
the order of, probably, $150 million or so over time. But if we 
do not do it by fiscal year 2003, that runway will be declared 
unusable and we do not have it.
    Mr. Hobson. Have you submitted money in the budget for 
that?
    Admiral Blair. I have submitted a requirement and the 
Department of the Air Force is wrestling around. The Air Force 
has accepted responsibility for doing that, and I have not seen 
where the money has been put.
    Mr. Hobson. Well, we will ask about it, maybe I will go a 
little higher.
    Admiral Blair. Yes, sir.
    Mr. Hobson. I will ask either of the other members that are 
here if they have any questions they would like to ask.
    Okay. Well, I basically asked all the things I wanted. I 
want to thank both of you for coming today and both of you for 
the priorities that you are establishing. I hope you know that, 
in the questions we ask, we are not criticizing as much as we 
are trying to figure out how we can do our job to help you do 
your job. You know, I guess I do not know how to put this. The 
politics of this, this is not a partisan issue. This is not a 
political issue for us. This is an issue of taking care of 
people. And we want to do this, and the reason we are having 
these hearings is to bring a focus to this, so that you can do 
your jobs better and you have a better fighting force on the 
day that you need it.
    I am concerned about some of the money that we are spending 
in North Korea right now, that I do not want to get into right 
now, that we could be spending in some of your areas, that is 
coming out of some other monies that is going into North Korea, 
which somebody is going to have to explain to me the military 
relevance of that. Maybe it is, maybe it is not. But, when I 
see how much money we are spending there, it troubles me when 
we are not doing what we should be doing here for our own 
people in this. And yet I want to be a humanitarian, but on the 
other hand, humanitarianism starts at home, taking care of your 
own people.
    So, if there is any time that we can help either of you, we 
are going to do that. General Schwartz has been after me since, 
I think, he first got his command. I am finally going to get 
there. As I get older, I do not recover from those long flights 
like I used to, but I think this is important and we are going 
to bring, if we get the airplane that we are hoping we will 
get, we are going to bring a number of members.
    And I hope people understand, this is not a junket. This is 
a true learning experience for people to understand, because if 
you have not seen it, you cannot really feel it to the degree 
that we should to do our jobs.
    So, we are going to be there, sir.
    And we are going to visit you too, Admiral.
    And I am going to stop at Elmendorf and look at that 
hospital I have been complaining about and the site that is up 
there. And Valerie has changed it so we do not land at 11:30 at 
night in Alaska when we do that. But, we are going to do it. 
And thank you very much for taking the time to come over and 
visit us.
    Admiral Blair. Thank you.
    General Schwartz. Thank you.
                                          Wednesday, June 27, 2001.

                        QUALITY OF LIFE IN KOREA

                               WITNESSES

ADMIRAL DENNIS BLAIR (USN) COMMANDER IN CHIEF, U.S. PACIFIC COMMAND
GENERAL THOMAS SCHWARTZ (USA) COMMANDER, U.S. FORCES KOREA
RAYMOND DUBOIS, DEPUTY UNDERSECRETARY OF DEFENSE FOR INSTALLATIONS AND 
    ENVIRONMENT
SUSAN SINCLAIR, US MILITARY SPOUSE
CHIEF MASTER SERGEANT STEVE SULLENS, (USAF)
SERGEANT DWAYNE DOZIER, (USA)

                       Statement of the Chairman

    Mr. Hobson [presiding]. Good morning. The committee will 
come to order.
    During the Memorial Day recess, I participated in a 10-day 
tour of military installations in the Pacific. John Olver, my 
ranking member, and Robert Aderholt went with me, as well as a 
couple of other members from the Congress. The purpose of this 
trip was to review and inspect the military construction 
activities and priorities in the Pacific theater. Of the areas 
visited during the trip, the facilities and conditions were 
particularly grim in Korea, although we went to Okinawa and we 
saw some problems there, and we went to Hawaii and we saw 
problems there.
    We have maintained a presence in Korea since 1953 when I 
was in high school. Currently, there are 37,000 active duty 
military personnel serving on the Korean Peninsula. The 
majority of the tours in Korea are unaccompanied. Therefore, 
service men and women must either leave their families behind 
in the States or transplant them thousands of miles away from 
home in cramped, dilapidated living quarters with not all the 
support that they would normally have if this was an 
accompanied tour.
    Much of the housing we saw was totally substandard. In 
fact, many of the troops are still living and working in 
temporary facilities, quonset huts built immediately following 
the 1953 armistice agreement.
    At Camp Stanley, many of the troops refer to their old 
living quarters as ``crack houses.'' Bottom line, the men and 
women who serve this country deserve better than what we are 
affording them in the Korean Peninsula at this time.
    At Camp Casey, we visited a 20-man barracks for senior 
NCOs. Because their barracks has no shower or latrine, these 
senior leaders must leave their quarters and families and go to 
an adjacent building, a particular hardship in the rough 
winters of Korea. Today, at some point here we are going to 
hear from Dwayne Dozier who will testify, who has firsthand 
knowledge of this because he lives in that barracks.
    Another area of particular concern in Korea are utility and 
infrastructure systems. The systems are old, fail daily, and 
they average over 500 utility outages per year. Most troops do 
not have Internet access because the old and deteriorated 
systems limit the technological capabilities of camps and 
installations. A recent survey cited phone and Internet access 
as the number one concern of men and women stationed in Korea. 
Therefore, improving these systems is one of this committee's 
top priorities and this chairman's top priority.
    To begin addressing the decaying infrastructure, the 
committee included seven projects totaling $56.7 million for 
utility upgrades in the House-passed supplemental 
appropriations bill for fiscal year 2001. If we aresuccessful, 
these projects will help the United State forces in Korea begin to 
manage their infrastructure problems. However, much more must be done 
if we are going to improve some of the poorest living and working 
conditions of any assignment in this military.
    A couple of other things: While in Korea, we learned an 
assignment to Korea is perceived as the greatest loss of pay in 
the military. For example, a Korean assignment is a one-year 
hardship tour similar to a six-month unaccompanied hardship 
tour in the Balkans. Yet soldiers serving in the Balkans are 
provided tax relief, no federal taxes, and a basic allowance 
for separate rations of approximately $237 per month. Soldiers 
serving in Korea for a year do not receive similar benefits.
    Further, 90 percent of the soldiers, sailors, airmen and 
Marines serving in Korea are unaccompanied and must maintain a 
second household in the United States. The hidden cost of 
maintaining a second home are approximately $3,000 a year. Tax 
relief and separate rations would help remedy this problem.
    Overseas military construction and the importance of funds 
for our troops located so far from home has been and will 
continue to be one of this subcommittee's top priorities during 
my chairmanship. Whether a servicemember is on an accompanied 
or unaccompanied tour, they deserve respectable living 
conditions. Unfortunately in Korea, these are few and far 
between.
    Working with South Korea, through the Special Measures 
Agreement and with our own self-help plan, we hope to improve 
better housing for all our members. This includes a mix of 
sustainment, renovation, build-to-lease and build-to-own 
strategies.
    Yet quality of life does not stop at the home. Working 
conditions, pay and benefits, medical service, commissary 
exchanges--and I have been in all those when I was over there 
looking around--these are all factors that must be weighed when 
considering quality of life in Korea.
    Most importantly, we must not let our servicemembers or 
their families feel that we here in CONUS have forgotten them. 
It is our obligation to take care of them, even when they are 
far away from any member's district. Mere geographic location 
does not relinquish us from this responsibility. My hope is 
that the news of this hearing will make its way to the ears of 
every member of Congress. It is important they realize the true 
story, because we can do something and we can make a 
difference.
    Today, the subcommittee will hear testimony on the quality-
of-life conditions in Korea from two panels. Our first panel 
will include Admiral Dennis Blair, commander in chief of the 
U.S. Pacific Command; General Thomas Schwartz, commander, 
United States Forces Korea, commander in chief, United Nations 
Command combined forces command; and Mr. Ray DuBois, deputy 
undersecretary of defense for installations and environment, 
who accompanied us on this trip.
    Admiral Blair and General Schwartz, we thank you for 
joining us today. You joined us earlier this year for our 
hearing on Pacific military construction issues. We know you 
have traveled a long way to be with us and I know our 
subcommittee joins me in thanking you both for your efforts.
    I just want to announce what our second panel will be, 
because I am sure most people want to stay around and hear them 
also. We are going to have spouses and enlisted points of view. 
Our second panel will include Susan Sinclair, wife of United 
States Army Colonel E.J. Sinclair; Chief Master Sergeant Steve 
Sullens, United States Air Force; and Sergeant Dwayne Dozier, 
United States Army.
    Before I ask our panel to start their testimony, I am going 
to yield to Mr. Olver for any opening statement he might make.
    But I want to say one other thing. This committee has had 
some unusual hearings this year. When the two CINCs came before 
us from Europe and the Pacific, when they testified, for the 
first time I have ever heard here and in the big committee, 
they said their number one priority was not more arms, not more 
munitions. Their number one priority was the people and their 
living and working conditions.
    I want to tell you something: I have been in Congress for 
10\1/2\ years and I have been on the Appropriations Committee 
for eight. That is the first time anybody ever came in and 
testified like that. And I think that is a real tribute to the 
leadership and the recognition within the military now of what 
we need to do and what is the right thing to do for our people.
    So with that, I will turn to Mr. Olver and any statement he 
might want to give.
    John.
    Mr. Olver. Thank you, Mr. Chairman.
    Broadly, I simply want to agree with the perceptions that 
the chairman has given of our visit to not just Korea, but a 
number of other places along the way. But this hearing is 
mainly about Korea.
    And I want to endorse the thrust of his comments about our 
obligations to the men and women who serve in those forward 
overseas places, particularly because we are talking today 
about Korea.
    I want to thank the chairman for holding this hearing. It 
is an important hearing for us to do. And to welcome Admiral 
Blair and General Schwartz and the other witnesses who are here 
today. I think all of you were on our trip or took part in our 
trip, and therefore this is a kind of areunion.
    We are happy that you could take the time to be with us 
today. It is, as I said, an important hearing. It brings us two 
witnesses, the commander of the Pacific theater, Admiral Blair, 
and the commander in Korea, General Schwartz, who have both 
distinguished careers of service to this country and who have 
had firsthand experience with the problems making the case for 
better living and working conditions for our men and women as 
they serve our country.
    Under the leadership of the chairman, we have been very 
fortunate to have been able to visit and see firsthand the 
problems in Korea. I suspect that our visit to Korea may be a 
doubled-edged sword, in that we share your concerns, the very 
real concerns as they were expressed to us. We have gotten a 
taste of the problems, but we have also learned enough to ask 
some tough questions and maybe even be a little bit dangerous 
along the way.
    I do not expect that there are easy solutions, at least 
none that do not cost a significant amount of money. However, I 
think we will have a real two-way conversation here and come up 
with some good ideas that we can all work together to 
implement. So I am looking forward to the hearing and I know we 
will learn a lot more about how we can be helpful to you who 
are in the command positions in our forward location in Korea.
    Thank you, Mr. Chairman.
    Mr. Hobson. Thank you, John.
    We are going to have your statements and then we will have 
members ask questions and we will do two rounds. We will 
probably have a vote about 10:30, so we will take a break for 
about 10 minutes, at that time, to go vote and then come back 
and resume.
    Admiral Blair, since you are the senior ranking officer, 
although I am not sure Ray is not, but I am going to accede to 
you.

                  Statement of Admiral Dennis C. Blair

    Admiral Blair. Mr. Chairman, Representative Olver, as you 
said, we began this important dialogue on military construction 
in the Pacific back on March 28th, and then we were delighted 
to host you and some of your committee and some other fine 
members of Congress last month. And now General Schwartz and I 
get a chance to fix the mistakes that we made in those two 
encounters, which is a rare opportunity for which we thank you.
    And let me start by saying how awed we are by the 
responsibility that this committee has taken for the living and 
working conditions of our men and women in uniform in the 
Pacific and their families. You cannot fix everything in one 
day or with one bill, but what our people mostly need is a 
sense that leadership understands, cares and is working on it 
and will fix it over time. That is the important thing. And 
already you have provided that, and we look forward to working 
with you on the fixes.
    I am here today to support General Schwartz in his quest to 
fix the quality-of-life shortfalls for our troops in the 
Republic of Korea. That is the place within the Pacific that 
they are the most extreme. That is where the worst living 
conditions are. And he and some of his people who live them 
every day are here to talk to you. They live them every day and 
then you have had a chance to see them on your visit.
    Day before yesterday, I participated in a commemoration 
ceremony for the veterans of the Korean War. It was the 25th of 
June, 1950, that the North Korean attack came across the border 
and that is what brought our troops to the peninsula in the 
first place. And I had a chance to talk with some of the 
veterans who went through the very tough fighting that took 
place during that time.
    We stopped where we were at the end of that war, and we 
hunkered down, and those were the camps that were in. But as I 
am going to tell you, our interest in that part of the theater 
went on. Our interests are not simply holding the line from 
that war. Our interests are far deeper and broader within the 
Asia-Pacific region.
    So as you are investing both in Korea and in other places 
in the Asia-Pacific theater, you are not making a short-term 
investment, you are not putting in some money that is going to 
be taken away in a couple of years. We need to be in Asia for 
the long haul, with the interests of the United States of 
America.
    We need to be forward in Korea, in Japan. We need to have 
that backup band of military capability in Guam, Hawaii and 
Alaska. We need to be there to support our defense treaties. We 
need to be there to support regional security. We need to be 
there to maintain U.S. forces throughout the region.
    And as you heard on your trip, this is not a lonely 
enterprise. Our allies want us there, and more than just 
wanting us there, they back us up with resources. Together, 
they provide nearly $5 billion a year to the cost of stationing 
our forces in Japan and in Korea.
    In Japan's case, that amounts to some 57 percent of the 
total cost of stationing forces there. And they want us there 
because our presence deters aggression, and it promotes 
security and peaceful development of the region which is in 
their country's interest, and it certainly is in the interests 
of the United States.
    In Japan, the ships and the aircraft from the 7th Fleet 
deploy throughout the region to support U.S. interests, and 
they also move out to other theaters, the Persian Gulf. We have 
aircraft from Kadena, which provide not only intelligence 
within the Pacific theater, but they alsosupport operations 
like Northern Watch in Turkey.
    And if there is trouble in that part of the world, if 
Americans fall into danger anywhere out there, I call on the 
7th Fleet, the 3rd Marine Expeditionary Force in Okinawa, as 
the ones to get there quickly, to go protect our citizens and 
to protect our interests.
    And we believe that over time, if tensions on the Korean 
Peninsula ease and political events move forward, that our 
forces in Korea will be part of that footprint of U.S. forces 
in Northeast Asia protecting our interests in all of Asia and 
throughout the world.
    And it is this contribution from our allies from Korea and 
Japan which makes these forces significant, and I cannot 
imagine that we would replicate that sort of support were we to 
come back to the United States. And from a strategic point of 
view, we do not want to. They need to be forward. That is where 
they can react fastest, that is where they can do the most 
good. And the challenge is simply to support them there right 
so that we do the right thing by the men and women who are 
stationed there and their families.
    We have made progress, a lot of it with the help of this 
committee, but there is a lot more to do. General Schwartz will 
talk in detail about Korea, and some of his people in even 
greater detail. But I agree with him that this is the year to 
fix Korea.
    And yet it is the entire Pacific that needs attention. The 
soldiers, sailors, airmen and Marines who go serve in Korea, 
often for a year unaccompanied, will come back to their 
families or have left their families in other places, often in 
the Pacific, places where utility bills are skyrocketing, 
places where they are still living in family quarters that were 
built at the same time that those barracks that you talked 
about were built in Korea.
    So to stay in the Pacific where we need to be, we need our 
runways and our fuel systems repaired, we need facilities that 
make our people proud to serve in there, not embarrassed to 
walk into them every day, and we need to work closely with our 
allies to ensure that they also make a contribution to our 
forces there which are in their interest as well as in our 
interests.
    And most of all, we need to do this to take care of our men 
and women in uniform, those who serve us every day with such 
great distinction, dedication and valor. You met many of them 
on your trip, and they are our sons and daughters, and they 
deserve that support for the great job they do.
    Thank you very much, Mr. Chairman.
    General Schwartz. Sir, I was thinking, I have about a 10-
minute pitch and about a 10-minute film clip, and it might be 
good to skip to Mr. DuBois before we break.
    Mr. Hobson. Before we go to him, I want to say that your 
wife Sandy is here, and your son is here today backing you up 
there if you have any trouble. We know who is in charge in 
Korea, just like it is in my family.
    General Schwartz. Mr. Chairman, if I may, both of them 
could do a better job up here than I will be able to do. But I 
am honored they are here.
    Mr. Hobson. Your wife does do a great job over there.
    General Schwartz. Thank you.
    Mr. Hobson. And we observed that when we were there, sir.
    Mr. DuBois.

                  Statement of Raymond F. DuBois, Jr.

    Mr. DuBois. Thank you, Mr. Chairman. I thought I was 
batting third in this illustrious lineup, but I will be glad to 
go second and perhaps tee up some of the things that General 
Schwartz wants to emphasize today.
    I have submitted a written statement, and with your 
permission I will excerpt some of those thoughts and add one or 
two other observations.
    Let me begin by thanking you, Mr. Chairman, for including 
me on your recent trip to the Pacific region where you and Mr. 
Olver and Mr. Aderholt of this subcommittee and Mr. Whitfield 
of the Energy and Commerce Committee, saw firsthand the living 
conditions and working conditions of our service men and women 
and their families in Korea.
    Overall, the housing conditions are at best uneven, as we 
saw, and at worst just that, unacceptable for our troops. We 
saw inadequate and substandard living quarters of all kinds and 
even witnessed where senior Army enlisted personnel were living 
in quonset huts temporarily constructed during and just after 
the Korean war. We also saw deteriorating facilities of all 
kinds: medical clinics, dining facilities, chapels, et cetera.
    But sometimes it was the things that we did not see, that 
infrastructure that is the unseen infrastructure. It is old and 
in various states of deterioration. Many installations, of 
course, experienced, as we were told, frequent power outages 
and frequent water shortages. Why? It is a result of 
inadequately maintained infrastructure.
    And Mr. Olver and I had some separate meetings focused 
specifically on some environmental issues, with respect to such 
things as underground storage tanks that require replacement, 
upgrade or removal. I want to interject here and commend 
General Schwartz for last week's announcement by the U.S. 
Forces Korea of a multi-million-dollar environmental protection 
program aimed at keeping all the U.S. military installations in 
Korea both clean and green.
    One last item on the environmental front is the issue of 
unserviceable, excess or obsolete ammunition and how it is 
stored in Korea. I have just appointed a new chairman of the 
Defense Explosive Safety Board, which reports to me. His first 
requirement will be to work with both Admiral Blair and General 
Schwartz to identify those potential hazards in Korea with 
respect to the storage of ammunition and other explosives.
    Now one can ask legitimately, ``Why did we see what we saw 
when we were in Korea?'' Of course, two days ago, as Admiral 
Blair said, 51 years ago was the start of some of the most 
bloody fighting in the history of our U.S. military. Today, 
South and North Korea straddle a military demarcation line 
denoting a truce but not denoting a peace. We stood there, Mr. 
Chairman, and not very far, perhaps a few yards from that so-
called MDL.
    Now, since the end of that Korean War, during this truce, 
nearly 2 million of our sons and daughters in uniform have 
served temporarily on one-year tours to sustain a long-term 
military presence in support of our Korean allies, South Korean 
allies. These deployments, as we all know, have successfully 
deterred any repeat of that day in June in 1950.
    Recently, the minister of foreign affairs and trade, Dr. 
Han, visited Washington. I met with him with the deputy 
secretary of defense, Paul Wolfowitz. Also, the minister of 
defense, Mr. Kim, visited and met with Mr. Rumsfeld and Mr. 
Wolfowitz.
    And recently Jim Kelly, my good friend and former colleague 
from the Nixon and Ford administrations, now assistant 
secretary of state for East Asia and Pacific affairs, testified 
to the importance of our presence on that peninsula, and the 
fact that even were reunification to occur, the importance of 
that presence is not diminished.
    But it is this temporary force structure, however, which 
has not been supported by an appropriately maintained 
infrastructure. Our troops in the aggregate have become 
permanent, but our military installations and facilities are 
still managed and funded as if they were temporary. In other 
words, not worthy, perhaps, of proper sustainment and 
modernization funding.
    Another one of the themes that we heard and I think 
deserves attention today, and it should come as no surprise, 
that this situation negatively impacts our operational 
readiness; or, as Russ Honore, the division commander of the 
2nd Infantry Division, said, our ability to fight tonight.
    Poor living and working conditions also have a direct 
bearing on the high turndown rate for personnel assigned to 
Korea, further reducing that readiness. And make no mistake 
about it, this affects ultimately the ability of our military 
to recruit, retain and to diminish attrition.
    As you all know, every year we must recruit 200,000 young 
Americans. The Army alone of that number has a recruiting goal 
of 78,950. Those 2 million Americans who are predominantly now 
back in the civilian sector, who have served temporary tours in 
Korea, talk to those young men and women in anticipation or 
even to perhaps influenced them to enlist in the military. 
Their experience is probably not entirely positive.
    But both the executive and the legislate branches must take 
responsibility for this situation, and equally, both branches 
can move to fix that problem. And on that front, Mr. Chairman, 
I want to extend my personal gratitude to you and to the 
members of this committee for your initiative to further 
improve the overall quality of life in Korea through your 
fiscal year 2001 supplemental appropriation add-on.
    Now, the general will no doubt talk about the Land 
Partnership program, he will talk about the general conditions 
of our installations, the readiness reporting, the host nation-
funded construction, et cetera. I will not steal his thunder in 
that respect.
    But I do want to say that you mentioned specifically some 
issues pertaining to pay differentials and compensation 
differentials between the troops that we have in Bosnia and 
Kosovo and the troops that we have in Korea.
    And while this is a responsibility under Dr. David Chu, the 
undersecretary for personnel and readiness, I want to tell you 
that I did meet with him at your request after we returned, as 
well as Charlie Abell, the new assistant secretary of defense 
for force management and policy, to try and to identify 
additional opportunities to appropriately compensate our 
personnel and to reduce that differential.
    I know that General Schwartz also had an opportunity over 
the last few days to meet with both Dr. Chu and Charlie Abell 
to discuss this, and I think that he has got some issues that 
he perhaps will share with us today on how we might solve or 
resolve that differential.
    In conclusion, there are many things that I share with 
these two distinguished officers on my right. There is one 
thing, however, that is special to me.
    As you know, I am a former enlisted man who served in 
Vietnam in 1968 and 1969. I am particularly concerned about how 
our enlisted troops are faring in Korea and elsewhere in the 
world, of course. But the Defense Department--and I have spoken 
to the secretary of defense personally since I returned--
remains committed to providing that appropriate quality of 
living and working conditions.
    He is meeting this week with all the senior enlisted 
members of the services to discuss this and other issues. But 
it is only through your strong support for a well-focused and-
funded military construction program that together we can 
accomplish this goal.
    In the final analysis, wars are deterred, as we all know, 
and if necessary fought and won by well-motivated troops, 
troops that are well-equipped,-trained and-led.
    However, we who provide that equipment, that training and 
that leadership are foolish if we think the morale of those 
troops, the motivation of those troops is not affected by where 
their families live while they are deployed and from where 
those troops deploy when they deploy into harm's way; whether 
you are three clicks from that military demarcation line 
between South and North Korea, or whether you are down in Pusan 
or in Osan. These issues determine how well, it seems to me, 
those troops will perform.
    I thank you again, Mr. Chairman, for this opportunity.
    [The prepared statement of Mr. Raymond F. DuBois, Jr. 
follows:]
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    Mr. Hobson. We are expecting a vote in 10 minutes. The two 
suspension votes will then be rolled until noon. I know you 
have some remarks you want to make and then you have a movie 
you want to show.
    Before we get away from it, there is one thing I did not 
talk about when Ray was talking about the secretary talking to 
people. I hope he talked to AAFES about that movie. As a former 
enlisted guy, I think it is outrageous that we charge $3, or as 
I am told in the Air Force facilities, $3.50 for enlisted 
people to go to the movie when we want them to stay on base in 
these forward positions. And I do not think they do that in 
some other places overseas.
    So I hope somebody will talk to AAFES about that and get 
that squared away. Because that is another thing, when I talk 
to young people over there, that they talked about. They do not 
have a lot of money in their pockets. They would like to stay 
on base and they like to go to the movie. But you start adding 
it up, it adds up.
    That was not in my thing, but that is one of my five items 
that I have been talking about and I just could not let it go 
by when you were talking about he was going to talk to people.
    Mr. DuBois. I actually brought this up, Mr. Chairman, with 
Dr. Chu. The AAFES reports to the undersecretary for personnel 
and readiness. The two-star general in Dallas has been notified 
that this is an issue.
    Mr. Hobson. I am sure he heard about it before we got back.
    Mr. DuBois. So I can assure you and I look forward to 
testifying again, as does Dr. Chu. I know we have a meeting 
scheduled with you and we will discuss this.
    Mr. Hobson. Thank you.
    General Schwartz, how do you want to proceed?
    General Schwartz. I think, sir, we could start and then 
whenever you say, we will just take a break then we will pick 
it back up when we come back.
    Mr. Hobson. Okay. But I want to leave plenty of time for 
people to ask questions when we get time. And we will have a 
couple of rounds.

                Statement of General Thomas A. Schwartz

    General Schwartz. Sir, I appreciate the opportunity to be 
here today and I thank you.
    Mr. Olver, thank you, sir, and all the distinguished 
members of the committee for being here today.
    I represent those 37,000 soldiers, sailors, airmen and 
Marines, and I am proud of it. Every day they make us proud and 
they make our nation proud. So I am glad to represent them.
    I want to tell you a little bit about the Korean story. 
Sometimes we say it is the good, the bad and the ugly. I think 
it is a little bit of every one of those, as I proceed today it 
will come out.
    But I want you to know, too, sir, that you sent a powerful 
message to our people. As you moved around that peninsula, you 
touched all these great servicemembers, they will not forget 
it. And it is powerful when you come and visit, and so we 
encourage everybody to come, because when you put your feet on 
the ground and you look into the eyes of the young people, much 
of what I am going to talk about comes alive. And so I thank 
you for that effort, sir. And like I said, it is a lasting 
impression and a powerful message of caring that was sent to 
them.
    I would like to proceed for about 10 minutes here, I am 
going to go through a little briefing in terms of trying to 
bring some of this alive with these charts you see to my right.
    You know, when you talk the Korean story, you have to talk 
about a vision, and we do have a vision. And that really, when 
you look at this chart, there are four tenets of that vision. 
They are highlighted in red.
    In the closed session yesterday, when we were talking, I 
really developed three of those, I think quite well, but today 
I would like to highlight the fourth one, and talk about the 
quality of life and how I see that vision unfolding.
    But first, if you are going to have a vision and we are 
going to do the kind of things we want to do, we are going to 
have to talk about vigilance because, I am telling you, that is 
our mission in Korea. We have to remain vigilant. And we have 
to stay trained and ready at all times. And when you talk about 
vigilance, you better talk about the threat in Korea.
    Now oftentimes I find it is misunderstood. People do not 
know about this North Korean threat and they do not understand 
it.
    I hope yesterday's session helped a little bit there, and 
the feedback that I got was that it did. But let me just recap 
for some of you that were not present, just a little bit about 
this guy in the north, about this country called North Korea 
and what it all means. Because when we look at this guy, we 
look at him in terms of capabilities and we look at him with 
respect to his intent.
    And I tell you, sometimes we do not know what his intent is 
and you will see I superimposed a question mark over intent, 
because it is hard to read for us in the military, as well as 
anybody else, to figure this out.
    But we know a lot about his capability. You look on the 
left-hand side, those are impressive credentials for a country 
as small as the state of North Korea. In fact, North Korea is 
about the size of the state of Indiana. And if you look down, 
they are the fifth largest military, the thirdlargest army.
    Look at the one I highlighted, artillery; I will just use 
it as an example and bring it alive, because this country, the 
size of the state of Indiana, has the largest array of 
artillery in the world.
    Hello? The largest array of artillery in the world? We have 
a superpower called the United States. We have countries like 
Russia and all the powers in the world. This country has more 
artillery.
    His artillery can reach out and dominate and affect the 
lives of 22 million people in South Korea at the pull of a 
lanyard. This is a dangerous situation, no doubt.
    And the other credentials listed there have their stories, 
too, and I will not belabor them. But I think the point at the 
bottom of this chart, what this talks about is the potential 
for a miscalculation.
    And that is why we in Korea must be ready to fight tonight. 
That is why we have to be vigilant, like I say in this chart. 
And it really helps me to focus, then, on the next chart, which 
is a thing I call combined readiness. This is about ROK and 
U.S. fighting together. This is about two countries staying 
trained and ready, to fight tonight. That is where our focus 
is.
    And if you ask me, ``What kind of fight do you expect, 
General?'' and I think this chart does a pretty good job of 
explaining that. Because we are going to do one of these two 
scenarios, or anything in between.
    You look in the left-hand side, it is a conflict with North 
Korea. But if you look at the bottom of that, I say that it is 
high-intensity conflict, no doubt. It is least likely. It is 
not likely they are going to attack us because we are so 
powerful and they know it. But it is the most dangerous 
scenario, no doubt.
    But if, on the right-hand side we look at the collapse of 
North Korea, I would tell you that that is most likely and it 
is least dangerous, but it is one we must have a plan for. And 
believe me, we are working hard with our counterparts, to drill 
this, scenario so we know what we can do and have to do should 
it happen.
    The key to this is that we have to have a vibrant exercise 
program to stay trained and ready. And it is this same 
readiness that we have every night that allows us to support 
the reconciliation plan that I am going to talk about in the 
next chart. Because that is one of our missions, to support the 
South Koreans as they move toward reconciliation.
    And we do that by remaining trained and ready, there is no 
doubt. But we also do it through a thing we call confidence-
building measures. And this chart is about confidence-building 
measures, it is about the political, social, economic and 
military confidence-building measures that we have to move 
forward on if we are going to have real reconciliation.
    But if you go to the center of this chart, it has two key 
words there: reciprocal and verifiable. And I am telling you as 
we move forward with North Korea, we must demand, as we deal 
with them, the reciprocity so they do what we demand of them 
and we also take the right steps.
    But we also have to have the ability to go in and verify 
what they do, so we know what is going on and being asked of 
them is actually taking place.
    So I think this chart is a good description, but I put in 
red ``military'' for one reason. And I put it in red because we 
have had progress in those other areas. We have had no progress 
in the military area. North Korea has done nothing in the 
military arena to show us that they are serious about 
reconciliation or they are serious about the reduction of the 
threat as we see it today. They have the capability, as I 
showed you. They have done nothing to reduce that capability.
    Regardless of the progress that they make in these areas, 
the dynamics of the Korean Peninsula have a regional 
implication, and I think this next chart will bring that alive. 
Look at this chart, because I think it is really one of the 
best I have ever seen in terms of telling the story of the 
vital interests of the United States.
    Look at Korea in the middle. It absolutely is the hub of 
Northeast Asia. In fact, Korea is closer to Beijing than it is 
to Tokyo. In fact, if you look in the bottom right-hand side of 
this chart, you see the three white clouds. We are one of two 
great allies in this region. People that we are tied in with in 
great defense treaties, who are our partners and allies should 
anything happen in this area, and we are proud of it.
    But look around at the rest of the clouds in this chart, 
and you begin to see a story of power and might. You begin to 
see a story of the largest economies and militaries in the 
world. In fact, on this chart we have the six largest armies of 
the world, and four of them are in Northeast Asia. Sometimes it 
is unequal, I guess I would say, in any part of the world.
    The bottom line is two key points. One is that the U.S. 
presence, I think, is the key to stability in this area: key 
militarily, economically and politically. And then I would say 
it is a vital interest region as far as we are concerned. U.S. 
interests will be in this area well into the future.
    And speaking about our future, I would go to the next 
chart, because if you talk future, then you need to talk a 
vision for the future. And I would like to highlight, Mr. 
Chairman, a unified peninsula is in the future somewhere. It is 
a U.S.-joint military force station in Korea for a longtime. 
And that combined presence of our sons and daughters serving in that 
country demands an acceptable quality of life, comparable to other 
locations.
    And we must compare Korea to other locations. You know why 
we must? Because our soldiers, sailors and airmen do. They 
compare it. And when the comparison, when you look at it, it is 
kind of sad. It is a fact, but it is sad.
    And that, kind of, leads me to the Korean story and my next 
chart, because if you look at this next chart, in pictures 
almost it brings alive this story that I am trying to tell 
today.
    Look at this young soldier. In 1950, there he is proud, 
motivated, serving his country. If you look down at the bottom, 
there he is again, 2001, dressed a little different: proud, 
motivated, standing in front of that quonset hut, serving his 
country. But if you look at him in 2050, there he is. He is 
laser-equipped, digitally connected to the White House. But the 
thing about it is, he is still standing in front of that 
quonset hut.
    We can do better. We must do better. We owe it to the 
military members and their families to do better, who 
faithfully serve over there every day. But to help, then CINC, 
you have to have a plan. I have a plan. Next chart please.
    We call this plan the Land Partnership Plan. And I am 
excited about it because it is a ROK-U.S. solution. You know, 
when you try to do things in Korea and they are U.S.-only 
solutions, they usually do not work. What I found out quickly 
when I got there is you want a good plan, then you develop it 
jointly. And we did it. And we are both excited about this 
plan.
    And look at this thing. We looked at Korea and we said, 
``Wait a minute. We have all these installations scattered all 
over around a country the size of the state of Indiana. We have 
them scattered around a country that is the second-largest, 
most densely populated area in the world. And we can do 
something about this.''
    So we said, ``41 major installations; can we do better? 
Yes, we can.'' So we envisioned a future that said, ``We can 
get this down to 26 installations. We can reduce our 
footprint.'' The Koreans like this. We like this.
    And what do we do? We get after those things that are in 
the center of this chart. We get after force protection issues. 
We get after better training areas that allow us to train the 
forces and stay trained and ready better. The infrastructure 
and the whole quality-of-life issues start to come into focus 
when you consolidate and do things more efficiently and gain 
the efficiencies we know we can get out of this plan. It is a 
win-win plan from a ROK-U.S. perspective.
    Let me show you the tenets of our self-help program in the 
next chart. And really, we call it a self-help program, but in 
a way that is wrong because we need your help. We are trying to 
do our best, but we cannot do much without Congress.
    But really there are five components to this, and you will 
see them on the slide when they go up. But the first one of the 
five components is we have to improve and fix the 
infrastructure, just like Mr. DuBois said, as well as Admiral 
Blair. We have to get after that. The ``one year at a time'' 
mentality has been killing us and we have to fix what is there 
already and get out of the mentality that it is only a 
temporary assignment we are going to be there and get into the 
idea that we are going to be there a long time.
    We have to renovate what we have. We have to build and 
maximize the build-to-lease--and I am going to talk about this 
story in just a minute, because it is a new way to go in Korea 
and it makes sense with the way our service chiefs are moving 
here in the United States--and we are going to minimize build-
to-own. We used to be maximizing: Build us buildings, build us 
barracks, Congress, pay for it. We are asking the ROKs to step 
up to the plate, the Republic of Korea to build more permanent 
stuff for us and pay for it.
    In fact, I would tell you in this Land Partnership Plan 
that I talked about a minute ago, the Republic of Korea will 
pay two out of three dollars of every dollar we spend in the 
future, and I think that is important.
    Mr. Hobson. That is good, but just make sure you do not 
give anything away until they are ready to pay or have paid.
    General Schwartz. Sir, I feel properly counseled on that. 
And we will adhere to that as principle number one.
    But it is a great plan and it emphasizes the environment 
that Mr. DuBois talked about, that is important, because we 
cannot ignore that any longer. And we have a great 
environmental campaign plan that makes sense for us and the 
Republic of Korea.
    On the next chart, I would like to just show you as part of 
the plan that we have to fix housing in Korea. You know, this 
is a great chart because as you look at it you will begin to 
see, when we compare ourselves with two other places, Japan and 
Europe, the difference with respect to Korea.
    On the left-hand side of the chart you will see two bars. 
And what the one on the left, the yellow one, says we only are 
able to house 10 percent of the married servicemembers who are 
serving in Korea, 10 percent. And those serving, there are 
about 21,000 who are married, only 10 percent get housing.
    If you compare that to Japan or Europe, they have 72 and 74 
percent availability of housing for those that are 
marriedserving in those places. And so we have a vision that by 2010 we 
want to increase this to 25 percent, and correspondingly, to 50 percent 
by 2020. And I think the next chart will show you how we plan to go 
about doing that.
    This next chart is called the family housing proposal. And 
really when we are talking about family housing we are talking 
about three things. We are talking about our ability to 
renovate, as I mentioned earlier, and we need to do that 
ourselves and request the dollars to do it. There is a lot of 
good housing there, it just needs to be fixed, and I know this 
committee saw some of that, and we have an aggressive plan. And 
I want to thank you, Mr. Chairman, for some of the dollars you 
gave us to get on with that project of renovation.
    We need to build our own. And as I mentioned, we are going 
to leverage the Republic of Korea to help us with their funds 
and use host nation dollars to do this and some congressional 
dollars.
    But the new part of this plan is the one I am really 
excited about. It is a build-to-lease plan. It is the 
privatization effort, so to speak, that I talked about earlier. 
And if you go to the center of this chart, the planned 
community part that I have you are looking at right now, you 
will see that we took a model, that we went to Italy, Chairman 
Hobson told us about this, and we flew there and we studied 
this model.
    And we found so many good things about it. We found a total 
planned community. We found a privatization effort in terms of 
the local community in terms of joint partnership of 
construction effort.
    And so we said, ``We can do this in Korea.'' We approached 
our Korean counterparts. They like this. It makes a lot of 
sense. And it is the way of the future for us, we think.
    It is a partnership, like I said, and they like it and we 
like it. And I am going to tell you, for a planned community 
effort, our first one will be at Camp Humphreys, it is to build 
houses for about 1,500 families, and it will save us upfront 
about $675 million going-in construction costs and then savings 
in the future that we are not able to quite calculate right now 
but we know there is huge savings in the future.
    So we are excited about this program and it makes sense for 
Korea.
    Next we have to fix our barracks and dorms. If we are going 
to fix them, then we need to sustain two programs that you have 
that are excellent for us right now, and they are called the 
Barracks Upgrade Program, and the next one, the Army Barracks 
Buyout Program. Those two programs, if Congress continues to 
fund us at the current rate until 2008, we will be able to 
complete our Barracks Upgrade Program, as well as our Barracks 
Building Program, on time with the quality barracks and dorms 
that we need for our servicemembers.
    That last part is one that is unique to Korea and needs 
attention. Our unaccompanied officers and senior NCOs do not 
have the quarters they need. They do not have the living 
conditions that are adequate: 1,400 senior NCOs and officers 
live in inadequate quarters at this time. Let me explain.
    On the next chart, you will see a great young sergeant. The 
sergeant that is going to come up on this slide is assigned to 
Korea today. That is his room. He lives in that room, and I 
will tell you, he is a lot shorter than I am. My head hits that 
ceiling. He has about a 10-by-10 at best place that he retires 
every night for a year. He is a senior noncommissioned officer, 
in this case, backbone of the Army, and that is where we put 
him. And we tell him, ``Have a nice day''; in this case, ``Have 
a nice night.''
    But he lives down in the left-hand corner in a quonset hut 
and that is his quonset hut; there are a total of four NCOs in 
that building. That is the gang latrine on the left-hand corner 
that they use jointly. We can do better. We must do better.
    Additionally, this great sergeant, separated from his 
family, incurs a large pay loss, and he absorbs some huge 
hidden costs that I will show you on the next chart. This great 
guy who we depend on, he goes over there and he leaves his 
family. And he has second household costs.
    And I will tell you, this chart captures well those kind of 
costs. And I have low-balled it here because we did a survey of 
these great sergeants. And I told my people, ``do not give me 
the highest figures. Give me the lowest figures, because I do 
not want anybody saying that we tried to use the highest 
ones.'' These are the lowest figures in our survey. Most of 
them spend more than this.
    But if you just add those figures up, quickly you come to 
the determination that annually they spend about $3,000 for 
their families back home. They are writing checks for this 
amount of money. If you look at those one-time costs and the 
yellow clouds around the chart, you will begin to see that 
those are costs additive to the ones in the middle of the 
chart. And the bottom line is, he spends $3,000 to $6,000 
hidden costs.
    Listen, when I served there in 1976, alone like this guy, I 
was a major with three kids. And Sandy--I am glad she is here 
today--she wrote me a letter, and here is what it said, I will 
never forget it. She said, ``Tom, quit writing those checks. 
You are killing us.'' What she was saying to me is I had those 
costs higher than this sergeant E-5. What she was saying to me 
is, ``We can't support these two households. We can't make it, 
Tom. Quit doing this to me because it'skilling us.'' I got it, 
sweetheart.
    This sergeant E-5 gets the same letter, but it is a little 
more dramatic in that case. He, she, these great 
servicemembers, cannot make it with these kind of hidden costs.
    But it leads me to an additional point, that I think is a 
great one, and Congressman Hobson, you alluded to it, and Mr. 
DuBois did too, and so did Admiral Blair.
    We have to change something here in terms of what we pay 
these people when we ask them to go overseas and serve their 
country far away from home.
    See, when we ask them, they compare themselves to the 
Balkans and they do it because, listen, they have been in the 
Balkans. They have been there and they have been in Korea. They 
know what is going on in their lives, and so do their families. 
And when they go to the Balkans, they get tax relief. When they 
go to the Balkans, they retain their separate rations. They 
retain $237 a month that they do not get to keep when they go 
to Korea.
    And that wife, spouse, husband, spouse at home is cooking 
the same pot of spaghetti for those kids. And the expenses are 
there. And he, she, deployed forward have a hard time dealing 
with this. It is a tremendous pay loss for them.
    If you look at the bottom line, look at the figures I show 
here. The servicemember in Korea gets about $19,000. The 
servicemen in the Balkans, with tax relief and keeping the 
separate rations, has about $24,000-plus. That is a huge 
difference. We need to, legislatively and through Department of 
Defense (DoD) regulation changes fix these pay disparities. We 
can only accomplish this with your help.
    My last chart I think does a good job of saying how you can 
help us. We need to improve, and I think everybody would agree, 
the living and working conditions. We cannot get at that 
without getting to the real property maintenance costs. Too 
many years we have gone on saying, ``Here's the money to 
operate, but we can't give you the repair and maintenance.'' 
And so we have backlogged this into huge numbers, and we have 
neglected the infrastructure on our installations.
    And so they are crumbling. They are falling apart. And we 
need those dollars and we ask you to assist us there. The 
renovation effort is outstanding. And so we are working on 
that.
    Mr. Hobson. General, we are going to have to stop. We have 
nine minutes to get there, and you do not want us to miss a 
vote, because that might cost you the----
    General Schwartz. Perfect timing, because I just finished.
    [Laughter.]
    [The prepared statement of General Thomas A. Schwartz 
follows:]
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    Mr. Hobson. Okay. Now, the one thing that is not on there 
that can be changed tomorrow is that when you serve a year in 
Korea and you come home, you should not have to deploy 
immediately somewhere else. There is no reason that cannot be 
changed. That needs no order. That needs no legislation.
    When you come home from the Balkans, you are not 
redeployable immediately, but you are when you come home from 
Korea. And that should be changed immediately, and that does 
not need anything other than an order from somewhere. I cannot 
give the order, but I can sure suggest that somebody ought to.
    So with that, we are going to go vote and come back. We 
will see the movie and then we will ask questions.
    General Schwartz. Thank you.
    Mr. Hobson. Thank you.
    [Recess.]
    Mr. Hobson. General Schwartz, do you want to complete your 
testimony?
    General Schwartz. Yes, thank you very much, Mr. Chairman. I 
was complete right there, and I think it is a good transition 
to show this videotape, if I may. I would like to show this 
tape.
    [Video.]
    General Schwartz. Thank you, Mr. Chairman.
    Mr. Hobson. Well, thank you. That is a very powerful 
message. I wish every member of Congress, and we could get that 
on TV all across the country, I think we could change things a 
lot faster if we could get this message out, and that is what 
we are trying to do today.
    With that, we are going to go to the questioning in this 
first round.
    And, John, do you have a question you would like to ask 
first?
    Mr. Olver. You are going to pass at this point?
    Mr. Hobson. Sure.
    Mr. Olver. Well, thank you very much, Mr. Chairman, for 
offering me the opportunity to have a first shot here.
    I thank you very much for the very eloquent statements that 
you have put forward again. I must say that I am very ready to 
make the investments that are necessary to accomplish what you 
have described as the Land Partnership Plan. Of course, I am 
most interested in making those investments that are going to 
be part of the end-game strategy and getting it there as 
quickly as is possible to do.
    Let me just ask you a question. It is very difficult when 
you have visited and revisited quite a number of the different 
facilities there, not by any means a majority of the 41, but 
quite a few, and after a while you, kind of, get lost, they 
begin to blur one into the other.
    Of the 41 that are going to be reduced down to 26, I assume 
that Camp Humphreys, which is one which I think my impression 
was from your statement, General, that that was the one where 
you are ready to move and ready to make a sizable investment in 
housing, and I assume that is one that is going to be one of 
the final 26.

                             CAMP HUMPHREYS

    Now if you go into Camp Humphreys, how much do you have to 
put into it in the infrastructure-level things, in the sewage 
treatment plans, in the electrical systems, the power systems 
and so forth that underpin the whole operation of a whole base? 
Particularly if you are thinking about a whole base concept 
here that is going to include all the different pieces, as you 
mentioned you had seen and were using as a model, the one from 
Naples?
    How much infrastructure work has to be done to deal with a 
camp like Humphreys? What is its total size in the long run?
    General Schwartz. The envisioned plan at Humphreys will 
have 1,500 families there.
    Mr. Olver. But what is the total size of that base? What is 
the total?
    General Schwartz. I am not sure I know. It will end-state 
at about 5,000.
    Mr. Olver. Really? End-state is 5,000 when your whole Land 
Partnership Plan is done at 1,500.
    General Schwartz. And that is quite a step up, because the 
1,500 families housing units we want to be there, of course, is 
added to what is already there and in end-state will equal 
5,000. And that is quite a move south. That is taking quite a 
few people out of Yongsan in this closure plan we have, Land 
Partnership Plan, and moving them south.
    Remember, when we move south we do two things really. We 
move them out of that danger artillery fan that they live under 
in the Seoul area and farther north. That is one good thing.
    But also, two, is we improve their quality of life. With 
this planned community concept that we have that the chairman 
had us look at and we plan to initiate at Humphreys as our 
first one, there is a substantial quality-of-life increase.
    But it is not just housing. It is in the commissary, it is 
in the PX, it is in the schools. I mean, it is the total 
community planning that is going to go on for the first time in 
Korea that we are excited about.
    Mr. Olver. How much do you have to put into the 
infrastructure in Humphreys in order to be able to accomplish 
that and be able to actually go in and do the 1,500 units of 
housing successfully?
    General Schwartz. Thank you, Congressman Olver. It is$38 
million.
    Mr. Olver. That is base infrastructure.
    General Schwartz. Basic infrastructure.
    Mr. Olver. Comprehensively the infrastructure for the base.
    General Schwartz. To improve the infrastructure to 
accommodate the planned community as we see it, we need $38 
million. And in my submission for the supplemental, matter of 
fact, it has a piece of that in it.

                              CAMP GREVES

    Mr. Olver. Okay. Now, let me just ask, I am going to come 
back to that, but is Camp Greves that was highlighted in your 
video, is that going to be one of the final 26?
    General Schwartz. Camp Greves, the one that was highlighted 
in the film, it is not. That is the last camp we will give up 
in LPP under the 10-year plan. So it still has nine years of 
existence.
    Mr. Olver. How much investment do you intend to put into, 
say, Camp Greves in the interim process?
    General Schwartz. I was just up there the other day with 
the commanding general of the division and some of his key 
people looking at that exact question. Because, you know, there 
is a balance here between they are going to be there nine more 
years, ``What do we continue to put into it?'' at the same time 
being responsible to Congress in an LPP plan that says 
eventually you are going to leave it.
    So we are making some tough decisions right now; the 
temporary things we can do to send the right signals 
temporarily quality of life, but do not make mistakes from an 
enduring installation perspective.
    They are working out a plan right now and they are going to 
get back to me with some recommendations. But I am going to 
have to put some money into it over the next nine years to keep 
it acceptable. My job is to keep that cost down.
    Mr. Olver. Okay. I assume the other highlighted place where 
we had 1998 MILCON on is at one of the bases. I forget. I think 
we probably visited that, but I am not sure which one. Was that 
Humphreys?
    General Schwartz. We had Humphreys in there. We had Casey 
in there. We had Yongsan in there. All three of those locations 
are enduring installations.
    Mr. Olver. And those will all be ones that will be in the 
final 26?
    General Schwartz. In fact, all three of those, if you went 
further than 26 to 10, are the 10 most enduring installations 
on the peninsula. So the only one that was the exception to 
that is Camp Greves, the last one we will close under LPP.
    Mr. Olver. You have certainly come to the core of my 
question, which was whether this was all being timed to put the 
most enduring investments that we put in in the places that are 
going to be there in the end-game, but recognizing that you do 
have to do some things in the interim.
    I do want to say, taking back to Humphreys, with 1,500 
families out of a 5,000 total, which is supposed to be there, 
that comes to something in the range of 30 percent of the force 
is expected to be accompanied families. Is that a decision that 
has been vetted, approved upward from there?
    My mild concern in the background is that we are preparing 
in Korea for a long haul of readiness to fight tonight. At the 
moment, it is totally unacceptable to have so few, maybe only 
2, 3, 4 percent, of our men and women who are in the services 
able to be accompanied. And so that makes a unstable situation 
for families.
    But what is wise if we are in the very front line in terms 
of making substantial permanence out of the housing if we were 
to have to fight tonight, are we not then in the position of 
having to first take care of the withdrawal and evacuation and 
so forth of families at a time when we may be under great 
duress?
    General Schwartz. Thank you, Congressman Olver.
    I think really I will answer that in two parts. One, our 
primary concern always is and will be our people. And it is the 
right tonight in terms of the soldier, sailor, airman, Marine 
responsibility, but also their families that accompany them. 
And we have an excellent evacuation plan for all family members 
on the peninsula. We practice it twice a year and we are very 
confident we can get, in all scenarios, those accompanying 
family members off the peninsula in case of war.
    There is a risk associated with it, however, that we were 
willing to take, and it is the same risk we took when we had 
the situation in Europe when we trained every day, when we 
looked at the great Russian hordes, and we look at them and we 
thought maybe they were going to come any day. But we still had 
family members there. There is a risk associated with that.
    What we are saying in Korea is that, based on our power and 
might, based on the deterrence that we have achieved over the 
last 50 years, we are willing to accept that risk. But to 
mitigate it, we are beginning to move south. And Humphreys is 
one of those, again, that is out of the artillery range, which 
is much safer and provides us much better opportunity to 
evacuate much more easily.
    And so the combination of those things, we have certainly 
looked at all of that. We have good plans. We feel confident. 
And we are willing to accept the risk associated with it. So 
these are the kind of dynamics that go through our mind all the 
time. And it is not risk-free. It certainly is not.
    Mr. Olver. I will come back again.
    Mr. Hobson. Mr. Goode.

                              NORTH KOREA

    Mr. Goode. Thank you, Mr. Chairman.
    And I would like to thank each of the panelists for their 
very fine presentations.
    I would like to ask General Schwartz, you put up one chart 
there that showed a military assault by North Korea on the 
Republic of Korea. And you said that was an unlikely scenario. 
Then beside that, it showed a picture of Korea with collapse, 
and if there was a collapse of the North Korean government, who 
is to say--I guess you might have an idea--what the situation 
would be in North Korea? It is possible it could be worse.
    General Schwartz. It certainly is. Actually, we have 
developed a contingency plan to deal with this collapse 
scenario. And this is a joint U.S.-ROK effort: We are putting 
day-by-day, week-by-week effort into this, because the more you 
work on it, the more you realize it is complicated. There are 
sensitive issues that have to be dealt with by both countries, 
and there are huge military, social and political issues that 
surround a collapse of North Korea.
    Of course, we got a glimpse of that in Germany. But it will 
even be a greater challenge, because, you know, in Germany they 
were quite ready, at least financially, to accept this. The 
South Korean government is not at that level. And that is one 
issue of many.
    But I am telling you, as we work with the Koreans, we have 
a wonderful relationship with these people. We are great 
partners. But we have many disagreements about the way to 
proceed.
    You can get into issues like the nuclear, the chemical, the 
biological: All of these very sensitive issues from every 
perspective. And so, believe me we are working hard on it every 
day.

                    UNITED STATES PRESENCE IN KOREA

    Mr. Goode. Since 1953, South Korea has wanted our presence 
and you would anticipate they would continue wanting our 
presence for another 50 years.
    General Schwartz. And I agree. I may have asked that 
frequently: How long are we going to be in Korea?
    And the answer I give goes something like this: I do not 
know, but I am telling you one thing, if you ask President Kim, 
the president of South Korea, he says that he does not see 
reconciliation, reunification for the next 20 or 30 years. 
Those are his words, not mine. I suspect he is correct, but 
nobody really knows.
    I think even in post-reunification, they have said they 
need us. The Korean president has said that Kim Jong Il said to 
him, the presence is required. And so I think they are going to 
ask for us and I think they do need us in the future because of 
that vital interest slide I showed and because that clearly is 
the hub for Northeast Asia.
    They have been invaded over 900 times in their history. And 
it is a very volatile and unbalanced environment and the 
presence of the United States provides that stability that they 
want and that the area needs.
    Mr. Goode. I think you are saying, and I would concur, that 
even lovers of democracy, if you had a best-case scenario with 
North Korea becoming a democratic nation and South Korea being 
as it is and having a joint government, democratic freedom, 
bills of rights, they would still want our presence there 
because of what is adjacent to them.
    All right, let me jump to our comparison with the military 
personnel in Bosnia and Kosovo. Now all military persons have 
Social Security taxes taken out of their pay in Bosnia and 
Kosovo, correct?

                             HARDSHIP DUTY

    General Schwartz. Sir, that is correct.
    Mr. Goode. All right. Now, the no federal income tax rule, 
does that apply from the E-1 to the four-star general?
    General Schwartz. Sir, it does.
    Mr. Goode. Okay. Now, the separate rations, that is 
applicable to married soldiers whose families are not with 
them; is that correct?
    General Schwartz. Sir, that is correct.
    Mr. Goode. All right. Now, in Korea you get hardship duty. 
Is there any monetary advantage with that?
    General Schwartz. Yes, sir, there is.
    Just recently, within the last year, we were able to define 
ourselves and be accepted as such by the Department of Defense 
as a hardship duty area. As a result of that redefinition, 
which we worked hard on, the DOD, Department of Defense, 
accepted this redefinition and awarded our soldiers, sailors, 
airmen and Marines $150 more per month because of this effort.
    This is excellent. This has made a huge difference in their 
lives because I have had many of them come up to me, actually 
hug me and say, ``General Schwartz, you will just never know 
how much this means.'' Put in light of the presentation I had, 
I think you could understand.
    So this is one effort that we are pursuing, and my follow-
on efforts with Dr. Chu that Mr. DuBois talked about earlier is 
to increase that hardship duty pay if at all possible. So we 
are pursuing as many ways forward as we can to try to help our 
people.
    Mr. Goode. Now in Bosnia and Kosovo, they do not get the 
hardship do they? Do they or do they not? How is that?
    General Schwartz. They do not get hardship duty pay, they 
get hazardous duty pay which is the equivalent; it is about the 
same.
    Mr. Goode. Okay. Thank you.
    Mr. Hobson. We are going to try to do five minutes each 
time, and if we cannot--Chet?
    Mr. Edwards. Let me first begin by saying thank you. Thank 
you to you, Mr. Chairman, for doing more than any member I have 
ever seen in my 10 years in Congress to educate other 
colleagues about the deplorable conditions in Korea that we are 
forcing upon our service men and women.
    Thank you to you, Admiral, to you General Schwartz, to you 
Mr. Secretary for your service to our country and for being 
here today fighting for our service men and women.

                          UNACCOMPANIED TOURS

    Somebody said it is a moral obligation to provide better 
care and quality of life for our service men and women. I think 
the chairman referred to that. You did, General Schwartz. The 
story I have to tell you briefly is, while you all were in 
Korea, I was on an airplane flying back to Killeen to visit 
Fort Hood to talk about a housing program. And on the small 
prop plane flying from Dallas to Killeen, the plane, except for 
maybe two or three of us, was filled with our Fort Hood service 
men and women who were coming back from Korea for the first 
time.
    And frankly, I was feeling a little sorry for myself 
because I was going to have to be away from my two sons for 
about 48 hours. And I will never forget watching as those 
service men and women went into the airport in Killeen and saw 
little 7-year-old son hold up a sign he made in his own 
handwriting that said, ``Welcome home, Daddy. I love you,'' and 
give his dad a hug for the first time in 12 months. I will 
never forget that scene as long as I live. You could not pay me 
a million dollars if you said, ``All you have to do, 
Congressman, is spend one year away from your families.''
    We can ask our service men and women to risk their lives 
for our country, sacrifice for our country, but I think it is 
immoral that because of our interest in saving a few dollars, 
we literally have, in effect, a government policy that has been 
in place for decades to say we are purposely separating service 
men and women from their children and their spouses. And I 
appreciate what this chairman and ranking member are doing to 
try to change that policy.
    If you have to be on an unaccompanied tour because your 
family does not want to go to another part of the world, I 
understand there are circumstances where that might occur. If 
you have to be in a remote outpost, I understand that. But to 
say simply because of money, we are only going to have 10 
percent families accompany to Korea, when it is 74 percent in 
Europe, is immoral.
    And it is, in effect, an American policy to say we are 
going to separate families. I think that is wrong, and I hope 
to be a small part with this chairman and ranking member and 
this committee to change it.
    My question to you, General Schwartz, following up on that, 
how much money would it cost today, if we did not expand the 
number of housing units--barracks and family homes or multi-
family units--we just kept the same present number, and I will 
ask about increasing numbers later--how much would it cost to 
see that every service man and woman in Korea was living in 
decent housing, approximately?
    General Schwartz. I am not sure I have that figure. That is 
a good question.
    Mr. Edwards. You have to make a lot of assumptions, I know. 
Do you have a ballpark figure? Would it be $1 billion? Would it 
be $5 billion?
    General Schwartz. A close figure that we have, that 
approximates what it is going to cost to build the five housing 
communities that we have planned, that Mr. Hobson has helped us 
model, is about $700 million.
    Mr. Edwards. How many, on a percentage basis, how many 
service men and women would still be living in substandard, 
unimproved housing, even if we made that investment? Still 
quite a few?
    General Schwartz. If we make that investment, no. If we 
make that investment and we consolidate like the LPP calls for, 
essentially that is end-state and we have improved the 
conditions and have quality of life acceptable to us across the 
board; for 2010, 25 percent. It will take until 2020 to do 50 
percent.
    Mr. Edwards. Okay. Now the 50 percent figure is still 24 
percent below the European accompanied tour numbers. If we had 
quality housing for every family that wanted to be part of an 
accompanied tour to Korea, would it be 50 percent, or would you 
guess it would be the equivalent to Europe at 74 percent?
    General Schwartz. Sir, we looked at that hard. I think the 
answer to that is it would be 50 percent, because Korea is so 
small; because the availability of land to us and opportunity 
to build, even though a lease process, is somewhat limited; I 
think the best, the most optimal conditions will say that it is 
about 50 percent, which is a lot better than 10 percent now. So 
we are willing to say 50 percent we can live with it.
    Mr. Edwards. Okay. So let's just say 50 percent for reasons 
of geography and education and other things. You are saying 
your goal is to reach that by 2020?
    General Schwartz. Yes, sir.
    Mr. Edwards. In today's dollars, what would it take if you 
could snap your fingers--I know you cannot--but if you could 
snap your fingers, build that housing today so we go from 10 to 
50 percent, how much would that cost?
    General Schwartz. To 50 percent, I think it is somewhere in 
the vicinity of about $1.5 billion.
    Mr. Edwards. For $1.5 billion, okay.
    So in order to save $1.5 billion, in effect, what we have 
done is to say to 40 percent of these families, ``Our countryis 
going to make you live apart from your children and from your spouses, 
even though you, your spouses and your children do not prefer that''; 
is that correct?
    General Schwartz. I think that is accurate.
    One thing I would like to say on record here is that if you 
take the Land Partnership Plan I think this puts a little 
different spin on it, because the figures I am giving you are--
and I will get back for the record with the absolute correct 
figures--but if you take Land Partnership Plan, which includes 
the Humphreys initiative and the total cost of the Land 
Partnership Plan, and that is closing 46 to 26, and the 
corresponding housing, the total LPP costs about $1.6 billion. 
That is to do all that.
    Of the $1.6 billion, $1.1 billion of it will be paid by the 
Republic of Korea, two out of three dollars. Our cost is about 
$500 million. And so that is somewhat equivalent to the $700 
million I gave you for the whole housing initiative. So we are 
in the ballpark there.
    But a point I want to make is, most of this cost is going 
to be picked up by host nation funds of the Republic of Korea 
under the Land Partnership Plan.
    Mr. Edwards. Great. My time is up. If you need to refine 
any of those numbers, provide that to committee, I would 
appreciate that.
    Thank you all for what you are doing on behalf of our 
service men and women.
    Mr. Hobson. Mr. Farr.
    Mr. Farr. Thank you, Mr. Chairman.
    Just to follow up on that, if you continued the Land 
Partnership Act where two-thirds of the expense is being picked 
up by Republic of Korea, how much money would the U.S. have to 
put up to complete it?
    General Schwartz. The answer to that is $500 million over 
the course of 10 years.
    Mr. Farr. Additional $500 million?
    General Schwartz. Over the course of 10 years.
    Mr. Farr. I want to thank the chairman. And, you know, I 
have an expression I use, usually at election time, it says, 
``Leadership is about getting results.'' And I think that what 
we have here is the synergism of leadership both from the 
military command, from the administration and certainly from 
the chairmanship of this committee about getting results for 
men and women.
    In my experience, short tenure on this committee, but 
representing some military bases, that I really understand that 
the essence of our military is training. The old adage that, 
you know, all other things being equal, the better trained 
soldier will prevail.
    It seems to me that we need to begin, in a married 
military, to begin thinking that training also equals quality 
of life; that you cannot really have a well-trained soldier 
unless there is a psychological support there.
    You know, yesterday I mentioned and I think it came very 
clear today, with what you just talked about in your letters to 
your wife and certainly those pictures, that, as I told you, I 
am, sort of, connected to Korea because not only was Fort Ord 
the home of the 7th Infantry, but my good friend, the late 
General Robert Moore, was one of your predecessors in Korea. 
And he really let me know how connected the Monterey Peninsula 
is, with the Defense Language Institute, so all of your Korean 
linguists come out my district.
    And I guess you mentioned that you were going to show us a 
little of the good, bad and the ugly, and in that respect I see 
a lot of that because I see Clint Eastwood every time I go 
home. [Laughter.]
    You and I have a lot of connections in this sense.
    And I think we are kind of late in learning about what the 
responsibility here is. And I really appreciate Mr. DuBois 
being here. Ray has gone on the trips with us. I think he gets 
it, that this readiness is really about quality of life as much 
as it is about training.
    For the members of this committee, in the early 1980s, for 
a scenario that nobody understood until, sort of, the 
presentation today, about a soldier being stationed in Korea, 
writing home to his wife with four children living in the 
community outside of Fort Ord in Marina, and one of the 
officers here told me he lived on the same street with this 
family.
    His 12-year-old son, hearing what the mother was saying 
about ``can't making ends meet,'' went out and hung himself. 
And he left a note with a can of beans, saying, ``This can of 
beans cannot feed four children. I hope that I taking my life 
will make it easier for my mother and father to survive.''
    So this is really about quality of life. And what do we do? 
I mean, that was world news, and certainly in the military. And 
my predecessor, Leon Panetta, worked hard in the military arm. 
He built all this housing, and then they closed Fort Ord.
    And so we built plenty of quality homes, but we got rid of 
them. And here we are needing these homes in Korea, not that 
you can take those homes from Fort Ord, but it does point out 
that the quality-of-life issues are not just for people 
stationed overseas. It is also a quality of life for their 
families that are back home. And we need to have a real 
commitment to these issues.
    And I think that, obviously, your testimony, General 
Schwartz, about the fact that soldiers are deployed in other 
areas, they do know what is going on, if they are in Bosniaand 
see what kind of comparison of lifestyle in Bosnia is with lifestyle in 
Korea, the word gets out. And how can we want people to stay in a 
military if they are going to be assigned to Korea, get these lousy 
housing situations, and then we ask them to extend their career in the 
military after we have given them good training?
    So I think that we ought to rethink what readiness really 
means, and we ought to build quality of life into the readiness 
formula.
    The other thing is that because you are commander in chief 
of the United Nations Command, the other side of the formula 
is, I understand there are nine other countries that have 
somebody in Korea, not necessarily troops, but we are not in a 
situation where we are, sort of, building Fortress America, 
where the American soldiers get treated so well, and the 
soldiers from other U.N. deployments become second-class 
citizens. That is not good for the morale of the command 
either, is it? Could you speak to that? What is the situation 
for other nations that are assigned to Korea?
    General Schwartz. We have other nations represented there 
through the United Nations Command. In fact, it is 14 nations. 
And the fact is, they do send some of their soldiers, sailors, 
airmen and Marines to serve in Korea side-by-side with us in 
different capacities, although it is very low level of 
representation. The fact is, we provide the barracks and the 
quality of life and the living conditions for them when they do 
that. And so there is no disparity there to speak of.
    Mr. Farr. Okay. Thank you.
    Times up, so Mr. Chairman, thank you.
    Mr. Hobson. Mr. Aderholt.

                  UNIFICATION OF NORTH AND SOUTH KOREA

    Mr. Aderholt. Thank you all for being here today, and 
certainly I, as well as the other members that were on this 
last CODEL, and particularly to the South Korean area, as well 
as the area where we joined Admiral Blair, certainly enjoyed 
the visit, and are certainly glad to have the firsthand 
experience.
    One thing, General Schwartz, you talked about regarding the 
future vision, is a unified peninsula with a U.S. joint 
military force stationed in Korea to maintain regional 
stability, and whose quality of life and training is comparable 
to other units in that area.
    Let me add, when you are talking about a unified peninsula, 
are you talking about North and South Korea being unified?
    General Schwartz. Yes, as we went forward. That is the 
hope, of course, that all Koreans have that they will be 
unified someday and that the process is, of course, 
reconciliation and then reunification as an end-state.
    Mr. Aderholt. What is the--and we talked about this a 
little bit when we were over there--what is the current 
attitude of the president of South Korea and what are his hopes 
of unification, and what is he trying to do to bring that 
about?
    General Schwartz. He has what he calls his Sunshine Policy 
which is a clear articulation that he would accept no 
provocation. But at the same time it is a movement forward; a 
very open, a very proactive movement forward toward what I said 
first, reconciliation and then eventual reunification.
    Although I have to tell you that in his policy, he has been 
very clear that this is a two-step process, and reconciliation 
is the initial goal and the hopes of reunification will follow. 
He has stated for the record that he thinks that might be 20 or 
30 years off.
    Mr. Aderholt. Do I understand that he believes it is his 
mission to try to unify the peninsula and also to some way try 
to help the North Koreans? Actually I was with the president 
last week and this issue came up, and he was talking about what 
type of vision that the president of South Korea had; it was a 
little bit unusual from the aspect of what he wants to do and 
how he wants to do it.
    General Schwartz. I think that he has been very clear. Now 
the procedures that are used to get to where he wants to go, of 
course, many people have different opinions on. But from my 
perspective--and I have spent quite a bit of time with him--he 
has been clear that he hopes first for reconciliation, meaning 
that he wants to foster those things that will reduce the 
tension and reduce the threat and allow the opening of 
relationships, be they cultural, social, political as well as 
military.
    And he wants the freedom to pursue those across the 
spectrum of confidence-building measures so that he can get at 
reconciliation first, followed with reunification.
    Mr. Aderholt. Thank you. That is all I have.
    Thank you, Mr. Chairman.
    Admiral Blair. Mr. Chairman, may I add a little bit on this 
question, and----
    Mr. Hobson. Yes, sir. Please.
    Admiral Blair [continuing]. The future of U.S. force 
structure in Northeast Asia? In particular, you really have to 
take a long-term view both to the past and to the future. When 
the Cold War ended, there were roughly 300,000 American troops 
in Europe and there were roughly 125,000 in Asia forward 
deployed.
    As a result of the Cold War, which was centered in Europe, 
about 200,000 of those troops in Europe came home and we are 
down to about 100,000 there now with no Soviet threat, which 
was the basis of our troop strength there in the past.
    In Asia we went from about 125,000 to about 100,000. The 
end of the Cold War did not affect our presence in Asianearly 
to the degree that it did in Europe. Neither, I think, would 
reconciliation in the Korean Peninsula, which would be the wiping away 
that DMZ that you went up and saw.
    Because our presence in Asia is not so much tied to a 
particular threat, as it is tied to our overall interests in 
the region in which lots of countries are growing, changing, 
developing, in which the United States has a heck of a lot of 
trade; which we have five alliances; and which contributes very 
much to our national interests when it is a calm, peacefully 
developing, economically developing place, but can suck us into 
terrible sacrifices when it goes bad, as it did 50 years ago in 
the Korean War, as it did more recently in the war in Viet Nam.
    So our presence in Asia, I think, will go as long as we are 
a world power with interests in Asia, which is well beyond 
Korean reconciliation.
    The force structure which we need there for the future has 
to have some characteristics. It has to be balanced. We need 
Army, Navy, Air Force and Marines out there to do the job.
    It has to be in more than one country. Korea does not want 
to be the only country hosting U.S. forces, neither does Japan. 
We want forces across both of those countries in the future.
    We need forces which are in places where they can train, 
because unless they are trained and ready, they are not any 
good at doing their jobs of deterrence.
    And finally, we need to put them in places where they are 
less of a burden on the immediate neighborhood. Just as in the 
United States, we do not want to be putting helicopters in the 
middle of urban areas and we do not want to be conducting 
artillery practice right downtown from schools, we need to be 
in places where we can do our training and not be a burden to 
the Korean and Japanese neighbors that we have.
    So all of these ideas are put together in things like you 
saw in General Schwartz's Land Partnership Plan. They are also 
in the commander in Korea's plan over the long term. For 
example, in Korea you talked, I know, Mr. Chairman, about the 
necessity to move from the southern very heavily populated part 
of Okinawa into the less-populated north where we are not 
taking tanks down main streets.
    So overall in Asia, we need to be there. We need to be 
balanced. We need to be more than one country. We need to be 
able to train and we need to be in places where we are welcome 
over the long term, not where we are causing a lot of 
resentment in the short term.
    And what you hear General Schwartz talking about is a very 
important Korea part. There is a Japanese part. And then there 
is, of course, the deployed part, when people come from home 
stations, whether they be Texas or California or Oregon, to 
reinforce for exercises and for crises.
    Mr. Hobson. Thank you, Admiral. I would add Guam in that, 
too. I notice you have a new emphasis on that. There was a time 
we thought we would walk away. But I think it is showing a 
strategic importance, and you have made some movement. There 
are some submarines in that area, and I suspect there will be 
some other movements also.
    With that, I would like to turn to Ms. Granger. You have 
been very patient.

                         LAND PARTNERSHIP PLAN

    Ms. Granger. Thank you. Thank you very much.
    First of all, thank you so much for being here. You have 
made your case very forcefully. I regret I was not able to go 
on the trip. It is one thing for us not to fund adequately 
because we just do not know. We cannot say that now. We know. 
We have either seen it personally or seen it in this video that 
you gave us.
    Talking about training, you know, I do not know how you can 
train men primarily when their families are at home writing 
them letters saying, ``We can't make it.'' Or moms, you know, 
they have left the kids; will not see them for a year, but mom 
is working two jobs just to make up the difference in what they 
had before. It just does not work. So I really praise the job 
you are doing.
    One thing that is important, I think, is to remember also--
when I was mayor, they closed a base in my district, Carswell--
wonderful--and part of that BRAC closing said the housing had 
to be offered to the homeless. The housing was such poor 
standards that no one would take it, but it was better than 
what you have shown us by far. So that is very important.
    You talked about the cost-sharing with the Republic of 
Korea. Can you give us a little more information? Is that 
sustainable? In other words, if we are going to start down this 
road and this process, is it going to be a situation where 
later you are going to have to say, ``No, it's really going to 
cost you more''? It may, but give us a better idea of how 
sustainable that is and how realistic.
    General Schwartz. Yes, I can. We are right now negotiating 
with the Land Partnership Plan and we are moving to a goal to 
have a memorandum of agreement signed by both countries by the 
end of September that locks in the agreement as to who gets 
what, how much is paid, and how this progresses over a period 
of 10 years. So I think when we finish this, and the Minister 
of Defense was just here recently and reflected on this, that 
the goal was by the end of September to have this agreement. I 
think it will be locked in in writing. And I think we can count 
on it.
    Ms. Granger. Very good. Thank you.

                     FISCAL YEAR 2001 SUPPLEMENTAL

    Mr. Hobson. We are going to do another round, but I would 
like to ask one question of each of you. I would likean answer 
from each of you. And I would like you to note that you are being 
recorded today.
    We put in the supplemental some projects. I would like you 
to comment on the necessity and the rank of those projects and 
your ability to carry out your mission.
    Do you want to start, and then I will go to the admiral and 
then I will go to Ray?
    General Schwartz. In the supplemental that you are speaking 
of, the projects that are in there are all projects that we 
thought about and derived our priority from the Land 
Partnership Plan. They are the underpinning projects to get 
Land Partnership Plan moving. They are sewer. They are 
infrastructure. They are electrical and they are water.
    And so because they are related to the LPP, I think if we 
do not move them along and they are not passed, it will begin 
to put a stake in the heart of what I think is a very exciting 
and good initiative. And so we put it in there. We requested 
those funds out of necessity.
    Mr. Hobson. And Admiral, there are a couple in Okinawa that 
both the Air Force and for the Army and the Marine Corps of 
things that we saw there. Would you like to comment?
    Admiral Blair. Yes, sir. Those projects which were in that 
list were in our highest band of priority. They will add to the 
war-fighting readiness, for example, in the case of the close 
fight training facility that was funded in Okinawa. And they 
are in that highest band of our quality of service 
requirements.
    Mr. Hobson. And I think we supported your Guam movement, 
two of those submarines.
    Admiral Blair. Same is true for Guam; yes, sir.
    Mr. Hobson. Yes. Okay.
    Mr. DuBois.
    Mr. DuBois. Mr. Chairman, the 2001 supplemental adds which 
you and your committee have identified are very high 
priorities. They are reflective of the unseen infrastructure 
that I spoke to.
    I also want to say that the secretary and the president's 
2002 amendment, which is being submitted today, adds some $2 
billion to the prior administration's 2002 submittal focused on 
modernization and restoration. In fact, I will this afternoon 
and tomorrow be in discussions with the Department of the Army 
in particular to determine how much of that is going to be 
allocated to Korea.
    In addition, it is a platform from which the secretary of 
defense has already stated publicly in his hearings of last 
week which will drive a 2003 budget submission, which we were 
building over the next, as you know, through the fall.
    Mr. Hobson. Thank you very much.
    We are going to do another, if you want to, we can do 
another round here, but remember, we have another panel that we 
would like to come forward, but if you felt that you did not 
get to ask what you wanted before. We will start with John.
    Mr. Olver. Thank you, Mr. Chairman.
    Again, I would like to just follow up a little bit. I guess 
now, in reflection of what questions I had asked earlier, I am 
sensing that you have maybe five of these, sort of, unitary 
proposals or combined whole community-type proposals that you 
are hoping to do. Are these all roughly in the same 1,500 
family houses in each of the five or do they vary a lot?
    General Schwartz. I am not sure I have it right in front of 
me. No, that is the biggest one, 1,500.
    Mr. Olver. That is the biggest one?
    General Schwartz. And from there they get smaller. And I 
would have to get back to you on the details of that.
    Mr. Olver. In the case of Humphreys, is that----
    General Schwartz. Actually I do have it. I just got it. 
Here is where they are. The case of Humphreys, it is 1,500. The 
other four go like this: Camp Carroll, 500 units; Osan, 250 
units; Yongsan, 500 units; and Kunsan, an Air Force facility, 
500 units. That is the way the five of them look.
    Mr. Olver. So in total, actually Humphreys is nearly half 
of those five.
    General Schwartz. It is. Because the other four total 
1,750.
    Mr. Olver. And the page where you showed the planned 
community model speaks of renovation, build-to-own and build-
to-lease. Does that mean the 1,500 are intended to be a 
combination of those or do you hope that is all going to be a 
build-to-lease, kind of, approach?
    General Schwartz. It is all a build-to-lease approach.
    Mr. Olver. It is all a build-to-lease approach. So all you 
are illustrating in that particular page is that we have three 
different ways of going about this.
    General Schwartz. Yes.
    Mr. Olver. Renovation of what we have and building to own 
and the building to lease.
    General Schwartz. Yes, sir.
    Mr. Olver. I would be curious. Mr. DuBois said something 
about an environmental program, several billion dollars. Would 
you give me a minute or two description of what you are 
involved with there?
    General Schwartz. Yes. We have what I think is a very 
comprehensive environmental campaign plan. Let me just give you 
a piece of it that is tremendously important.
    We have underground storage facilities in Korea. They total 
about 1,700. And we need to get after bringing those out of the 
ground, like is required here in the states. It is also now 
required by SOFA to do so in Korea. To get thoseout of the 
ground is going to cost us about $170 million, and we need to get about 
this over the next 10 years.
    Mr. Olver. Okay.
    General Schwartz. That is just a piece of the environmental 
campaign plan that we have right now.
    Mr. Olver. I think that it is critically important. This is 
a statement from me. I do not know whether other people would 
agree with it or not. We are at peacetime in Korea, readiness 
yes, but in peacetime--a cold peace certainly, such as it is.
    I think that it is critical, in order to maintain what has 
been an excellent and cooperation relationship between the 
Republic of South Korea and America, each of us with our 
interests here, mutually that is a favorable cooperation. They, 
it is their home. It is our whole interests in Asia that are 
involved in it.
    It seems to me critical that we treat our environmental 
obligations in Korea as if Korea was basically a State-side or 
a territory. There really should be no difference between how 
we treat environmental issues, whether it is sewage or whatever 
we are doing along those lines.
    And it just reminded me of one other thing. Because I was 
so interested in how in Korea which we have had testimony on 
your part, that it is extremely densely populated. And there 
was construction going on in so many different places and 
housing going up everywhere. And Mrs. Schwartz has kindly 
presented me with a series of photographs of industrial areas 
and heavy housing areas, where every time you get low enough so 
that it is almost flat land, you end up with rice paddies.
    It is extremely densely populated, the second most densely 
populated or maybe most densely populated nation in the world, 
with a population that is going up.
    And I would hope that you would be very sensitive about 
trying to put your Land Partnership Program on lands that do 
not--I mean it is their responsibility to look for their 
interests. But otherwise, we will be having to feed them as 
well.
    And we should be trying to make certain that we use lands 
that are peripheral to what would be their best growing lands, 
especially given the--I want to pass these around to other 
people to just show the other folks who are on the trip and 
those who were not did not have that advantage what the 
intensity in which they are so closely doing their agriculture 
right close in to everything else that is going on.
    General Schwartz. Thank you, sir. We are tying our water 
treatment and our waste treatment facilities on these enduring 
installations into the local community, which is a new 
initiative that has not been done previously. And we are 
excited about that, and the ROK, the Republic of Korea, is 
cooperating in that effort.
    Mr. Hobson. Mr. Edwards, we just want to say we are all 
sorry we did not have our ace photographer along with Mr. Farr 
but he had other things to do.
    Chet.
    Mr. Edwards. Mr. Chairman, I will be very brief because I 
know we have an excellent panel coming up in just a few 
moments.
    General Schwartz, you could just follow-up with the details 
in written response, but let me just ask you a question. On the 
goal of 2020 getting to 50 percent family accompanied tours to 
Korea, if the Congress appropriated more money more quickly, 
could that be expedited and complete that effort before 2020? 
That is a long time away for a 20-year-old soldier to tell him 
when they are 40 years we will end up allowing half of them to 
have accompanied tours to Korea.
    Could you do it more quickly if more money became 
available?
    General Schwartz. I think the answer to that is yes. I will 
get back for the record. I believe it is yes. I believe we 
could accomplish most of what we wanted to do by 2010, all of 
it, if we had the money. But what we tried to do is temper it 
with something that was reasonable in terms of our requests and 
spread it out over a longer period of time.
    But I would respond to that positively.
    Mr. Edwards. If in writing, you could then answer that same 
question in regard to the Barracks Improvement Program by 2008. 
Could that be sped up? That is not spread out quite as far as 
2020 but could that be sped up?
    And final comment, Secretary DuBois, having watched 
firsthand your personal commitment to quality-of-life issues 
for our service men and women, it does not surprise me that the 
administration is asking for an additional $2 billion in 
military construction funding. Thank you for your leadership in 
that effort and for the administration's focus on this 
important priority.
    Mr. DuBois. Thank you, Mr. Edwards.
    Mr. Edwards. Thank you, Mr. Chairman.
    Mr. Hobson. Mr. Farr.
    Mr. Farr. Thank you, Mr. Chairman.
    I wanted to follow up on one of the slides you did, one of 
the panels, which really interested me. You thought that the 
most likely scenario for a crisis in Korea would be a 
humanitarian crisis. But you did not really mention how the 
military trains for humanitarian crisis.
    And you know, we went off to vote and I was trying to get a 
hold of Tony Hall, who is a member of Congress, who isprobably 
the only member that I know that has spent any time in North Korea as a 
member. He is head of the Hunger Caucus and went on a humanitarian food 
mission to North Korea.
    But I am very interested in what you do to train for a 
humanitarian crisis.
    General Schwartz. I think that is a good question. Of 
course, as a military we do not focus on training for 
humanitarian crisis. It is something we do and it is a mission 
we can get assigned, and we do them quite well.
    We have found through time that if a military concentrates 
on the mission it has, to deal with open and high-intensity 
conflict, that if it can deal with those high-spectrum 
challenges, it can, in a graduated scale down to the 
humanitarian crisis level, deal with those also. We have proven 
that many times, particularly in the last 10 years.
    But it is not our focus, but it is a reality that we need 
to deal with, and that is why we are spending so much time on 
this contingency planning we are doing. And also beginning to 
look at how we are equipped to handle a collapse from a 
humanitarian perspective.
    So we are looking at it hard, but that is not our training 
focus.
    Mr. Farr. General Schwartz, I am really interested in this 
because I am a lay person at this, but I was a Peace Corps 
volunteer, and you know, my observation of visiting Bosnia and 
going with this committee, it seems to me that an awful lot of 
our situations where we are in hot spots really requires that 
we do a better job at, sort of, humanitarian and economic basic 
local community development.
    And you know, we have been in Haiti, and we go in there 
with our military power, and a lot of the military have the 
skills to do the infrastructure development, but that is not 
their role.
    We go into Bosnia and we are trying to stabilize an area 
which, obviously, it is going to be stabilized when there is 
social justice and economic opportunity. And a lot of that is 
just a little know-how that has to be trained. And I do think 
that it is not been our traditional military mission, but I 
think it is becoming more defined, as you so clearly defined it 
today, that we need to be focused on how we can do the ounce of 
prevention in the humanitarian crisis.
    I mean, if this government falls apart it will probably be 
because of starvation. And people start moving south, you have 
the scenario you talked about. And what we need to do is the 
ounce of prevention, is prevent starvation.
    General Schwartz. I have heard Admiral Blair talk on this. 
I think, sir, you want to add a comment.
    Admiral Blair. Let me just mention, Mr. Farr, because we 
work on this contingency throughout the Pacific. And the three 
things I would point to that we in the armed forces bring to a 
complex contingency are, first, the security aspect. You cannot 
get food around while there are armed bands who are taking it 
away from people. And so the security piece is a part of it. 
The second one is the transportation piece. We are good at 
hauling stuff and we can get it in in tough conditions.
    And then the third one is building a bridge with the other 
humanitarian relief organizations, generally through something 
we call a civil-military operations center, in which we sit 
down at one table and figure out how we work with Doctors 
Without Frontiers, with World Horizons, with Red Cross, with 
the organizations that actually can bring in food and other 
humanitarian supplies, and work together to get it to the right 
space.
    So we do practice that throughout the theater. And I guess 
our biggest example recently was in the East Timor situation 
when we applied some of those skills down in a part of former 
Indonesia.
    I think we can bring all those skills to bear, but the part 
of it that General Schwartz has to worry about in particular is 
in any, kind of, scenario like that, you have this huge army 
that he pointed to, which is going to be the number one thing 
on his mind, at the same time that you have this humanitarian 
potential disaster going. So he has got to be, sort of, 
watching the fifth largest army in the world, at the same time 
that he is watching the 13 million people up there having a 
hard time getting food.
    So I think that is what really adds to the complexity. It 
is really a combination war prevention, war-fighting and 
humanitarian all at the same time.
    Mr. Farr. I guess the question, then, is are we beginning 
to look at training for that latter part which you are doing. 
We visited, with the chairman, SOUTHCOM after Hurricane Mitch 
in Honduras. And it seems to me we are being called upon more 
in these peacekeeping missions to develop that contingent that 
we really have not developed before.
    So I am curious--this is probably off the issue, but it is 
not totally off the issue if indeed the biggest and most likely 
scenario in Korea is a humanitarian crisis; that we ought to be 
focused more on how we can work with the NGOs on that.
    Admiral Blair. Yes, sir, we do a lot of training on that 
throughout the theater. You find the biggest training you need 
is not so much on the actual on-the-ground skills, because as 
General Schwartz said, the tactical skills that we develop for 
our soldiers and other service men in other areas can be pretty 
well adapted.
    It is really the kind of skills that you gain in tabletop 
exercises, in command post exercises, in which you runthrough 
scenarios and get the organization right. How do you communicate, 
requirements back and forth? How do you monitor degree of security and 
where the humanitarian supplies are needing and where they are moving?
    Because we get some real mismatches and we end up, for 
example, air-dropping supplies in places where they do not do 
any good because the information was bad. We know how to air 
drop. The key is getting the information from the humanitarian 
organizations to put it in the right place.
    So we find that the exercises are generally in the 
tabletop, seminar, command post exercise more than they are in 
getting out and putting soldiers, sailors, airmen and Marines 
in the field.
    And so we do that throughout the command. And then there is 
the special case which General Schwartz will be able to take 
advantage of those skills and, of course, adapt them for his 
particular problem.
    Mr. Hobson. Thank you for very much for coming. It is been 
very informative to all of us. I wish I could get that clip on 
all across the country. I think it would do a lot.
    Thank you, Mr. DuBois, for what you are doing over there. I 
think it is very helpful to the troops to know that there are 
real people out there when we have gone out there to go with us 
and to see what is going on.
    Admiral, we thank you for all you are doing too. You were 
very gracious to us when we were there. And I just wish I had 
20 members with me instead of five, because members just do not 
know today what is going on out there. It is so far to get 
there, but we were there and you are doing a wonderful job. The 
people on the ground, we cannot be more proud of what they are 
doing with what they have. But we just need to make it right.
    We thank you and appreciate your testimony and we will go 
on to our second panel now.
    General Schwartz. Thank you very much, sir.
    Mr. Hobson. In addition to the three people who are 
testifying today, there are three other people here: First 
Sergeant Fowler, from the 2nd Infantry Division--would you 
please stand and be recognized?--Candy Glerup, whom we have met 
before and visited her also when we were there--it is good to 
see you again, Candy.
    And where is the tech sergeant, Serilli? Right over here. 
She is an Air Force person. She has two children. She is on an 
unaccompanied tour, as I understand it.
    And you have two children back home that your husband is 
taking care of, is that right? Well, maybe you will get a 
little visit now that you are back here.
    First, we have three people today. Our first, Susan 
Sinclair, who I said before is the wife of United States Army 
Colonel E.J. Sinclair, who you saw in the movie; Chief Master 
Sergeant Steve Sullens, United States Air Force; and Sergeant 
Dwayne Dozier, United States Army.
    I want to thank all of you for coming such a long way to 
testify with us today. And I think we will start with Ms. 
Sinclair and any statement that you would like to make, you 
may. And then we will ask you a whole bunch of questions after 
you get done.

                      STATEMENT OF SUSAN SINCLAIR

    Mrs. Sinclair. Mr. Chairman and distinguished members of 
Congress, good morning. Thank you for allowing me this 
opportunity to testify before you today about family member 
quality of life in the Republic of Korea.
    My name is Susan Sinclair, spouse of Colonel Edward 
Sinclair, United States Army. We have lived in Korea for the 
past three years. We arrived in 1998 when my husband assumed 
command of the 6th Cavalry Brigade. My husband had just reached 
his 22nd year of active duty service.
    The 6th Cavalry Brigade includes over 3,000 soldiers 
located in five different locations on the Korean Peninsula. In 
addition, the command includes only 35 command-sponsored 
families. However, approximately 70 other families chose to 
move to Korea without command sponsorship to be with their 
military spouse.
    The government quarters we were assigned at Camp Humphreys 
was a quonset hut built during the Korean War some 50 years 
ago. The first thing I noticed upon arrival was a large sign on 
the door warning of the danger of asbestos. Electrical problems 
were constant. In the summer time, the quonset hut absorbed 
heat. You could not run the window air conditioner and use the 
iron or microwave at the same time.
    Camp Humphreys experienced frequent power outages due to 
outdated infrastructure. Some weeks, in fact, the power went 
off at least once a day.
    The winter brought constant subfreezing temperatures that 
often hovered below zero. We were forced to heat the quonset 
hut using the oven and stove top burners because the heating 
system emitted a thick, black, oily residue if turned on.
    Needless to say, plumbing problems added to our poor 
quality of life. For example, we often went without hot water. 
One period went for over a week. Therefore, we went to the gym 
to shower or heated water on the stove.
    The quonset hut was extremely small. The washing machine 
and dryer were located in our bedroom. Since most of the old 
pipes were severely rusted, soldiers and family members had to 
run the water four to five minutes to get the brown color out 
before using. Some days we had the brown color all day.
    As a commander, my husband was required to host social 
events for Republic of Korea counterparts, both military and 
civilian. Our house was totally inadequate for this type of 
entertaining. Plus, we were embarrassed to bring Korean guests 
to our home.
    Unquestionably, this quonset hut was the worst out of the 
20 houses we have lived in. It was ironic, however, that our 
quarters were nicer than what the other families had.
    Most of the command-sponsored families were required to 
live off-post. Conditions at those houses or apartments were 
not much better. Most of these apartments had no air 
conditioning, no closets, limited parking and no place for 
their children to play. The water was unsafe to drink, 
therefore bottled water was required.
    Many command-sponsored families from the outlying bases had 
to live near Camp Humphreys or Osan Air Force Base so their 
children could attend school. This created additional hardship 
for those families given the distance involved. Some of them 
lived two to three hours away from where their spouses lived 
and worked.
    Meanwhile, living quarters for the soldiers were equally 
substandard. For example, in the barracks room, soldiers would 
put up umbrellas to get the dripping condensation from ruining 
their personal property, such as TVs and stereos. They also had 
to deal with the electrical, plumbing and heating challenges as 
well. Mildew on clothes in their closets and sewage backing up 
in the shower drains were common problems.
    You can only imagine that these conditions added to the 
hardship of a one-year, unaccompanied tour for almost all of 
the soldiers in the brigade.
    I would also like to comment about the quality of life for 
our non-command-sponsored families. First, these families had 
to pay their own way to Korea to avoid the hardship separation.
    Next, they were not eligible to live on-post. Their 
children were not guaranteed a place in the Department of 
Defense schools; they could only attend on a space-available 
basis.
    Third, although these families were officially non-command 
sponsored, we did integrate them in our family readiness group 
activities, such as socials, meetings and noncombatant 
evacuation exercises.
    Before I close, I would like to leave you with one last 
comment of a different nature. Given these substandard living 
and quality-of-life conditions, our family members could have 
thrown up their arms in frustration and returned to the United 
States, which some of them did. However, that is not always the 
case. For the Sinclairs and many other military families, our 
priority has always been to keep the family together.
    In spite of the substandard living conditions, my husband 
elected to stay in Korea for another assignment. The bottom 
line is, he loves his job, serving our nation and making a 
contribution to our allied effort. More importantly, he feels 
like he has a real mission in Korea, and that makes all the 
difference in the world, so we stay.
    We now reside in government quarters at the Yongsan Army 
garrison in Seoul. Our quarters are a step up from the quonset 
hut, but the oil-based heating system, rusty water problems, 
are just a few of the infrastructure challenges there as well.
    I thank you very much for listening to my comments, and I 
hope you can help make a difference and improve the quality of 
life for our servicemembers and their families. Thank you.
    [The prepared statement of Susan Sinclair follows:]
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    Mr. Hobson. Thank you, Mrs. Sinclair.
    Chief Master Sergeant.

            Statement of Chief Master Sergeant Steve Sullens

    Chief Master Sergeant Sullens. Mr. Chairman, distinguished 
members of Congress, good afternoon. Thank you for this 
opportunity to address you and discuss our perspectives on 
living and working conditions for U.S. forces personnel 
stationed in the Republic of Korea.
    My name is Chief Master Sergeant Steve Sullens, and I have 
25 years of active duty service in the United States Air Force. 
I presently serve as the 7th Air Force Command chief master 
sergeant at Osan Air Base, Republic of Korea, a leadership 
position I assumed in September of 1999. My wife is also a 
chief master sergeant and she is also assigned in Korea.
    Mr. Hobson. Wait a minute. You got two chief master 
sergeants in the same family?
    Chief Master Sergeant Sullens. Damn proud of it, too, sir. 
[Laughter.]
    Mr. Hobson. That is great. Who has the senior rank here? 
You do not want to get into that, do you, sir?
    Chief Master Sergeant Sullens. Since the cameras are 
running, she does, sir. [Laughter.]
    I am pretty proud of her, sir, as a matter of fact.
    In my current leadership role I am the principal enlisted 
adviser to the senior Air Force officer in Korea, Lieutenant 
General Charles Heflebower, in his roles as commander, United 
States Republic of Korea Air Component Command and commander of 
7th Air Force.
    Specifically, I advise Lieutenant General Heflebower on the 
health, welfare, morale and mission readiness of the 9,000 Air 
Force enlisted personnel assigned to the Korean Peninsula.
    Our area of responsibility includes two main and five co-
located operating bases and 19 geographically separated units. 
Today, however, I wanted to speak on behalf of not only our 
enlisted airmen but also the enlisted soldiers, sailors and 
Marines who comprise the majority of over 37,000 servicemembers 
of United States Forces, Korea.
    As you know our mission in Korea is to maintain the 
armistice and deter war. It deterrence fails, we are ready to 
fight tonight and we will prevail. Ours is an awesome mission 
and responsibility as no other theater in the world faces a 
threat comparable to the one we face across the Demilitarized 
Zone.
    Every day exceptional Americans serving in various enlisted 
ranks and specialties proudly work to keep our operating 
locations secure and our fighter and reconnaissance aircraft 
flying and combat ready.
    We go about our duty well-removed from the comforts of 
mainstream America and with little fanfare.
    Providing a ground presence in Korea, are some 23,000 
soldiers of the 2nd Infantry Division and 8th United States 
Army. These proud soldiers performed their duties across the 
Korea Peninsula and their 2nd Infantry Division represents the 
most forward-deployed division in the Army, with some 
subordinate units located directly near the DMZ.
    Although smaller in number, our great Navy and Marine Corps 
counterparts, about 200 servicemembers, perform an extremely 
vital mission in Korea. They are responsible for all planning 
and coordination of naval and Marine Corps forces that will 
deploy to the theater in the event of war.
    Make no mistake, our joint USFK team will do whatever our 
nation asks and commanders ask to maintain readiness and we 
will do it under any conditions necessary. The question before 
us today, ``What is a necessary working condition?''
    Thanks in no small part to aggressive leadership and your 
support, our quality of life in Korea is improving on a very 
visible daily basis. However, there is still much work to be 
done as our fighting men and women deserve much better than 
what is currently our norm.
    Duty in Korea is performed under hardship conditions. These 
hardship conditions begin with family separation. The 
overwhelming majority of servicemembers perform one-year 
unaccompanied tours. In fact, almost 95 percent of our forces 
are on unaccompanied tours; tremendous sacrifices to keep the 
peace and to protect U.S. interests in the region.
    This separation is automatically accompanied by financial 
constraints. The most common scenario involves the member 
trading basic substance allowances for a meal card, which is a 
perceived cut in pay, and then incurring the additional costs 
associated with maintain two households.
    The recently approve hardship duty pay has helped, but 
several areas in Korea warrant immediate consideration for 
higher tiers of hardship duty pay.
    Then there are the living and working conditions. Since the 
Korean War, little has been done to improve the infrastructure 
and so we have massive failing infrastructure. Simply put, most 
accompanied and unaccompanied quarters are substandard. Whether 
designated for the most junior servicemen or the most senior 
officer, these facilities rank among the worst in the 
Department of Defense.
    In terms or quality and infrastructure readiness, they are 
cramped, leaky and have inefficient and outdated floor plans. 
Outwardly, they appear sound, some even aesthetically pleasing. 
But inside the walls exist failing plumbing, heating and 
ventilation, electrical and water systems. Water outages or low 
pressure are routine, and in many facilities hot water is not 
an expectation, rather a blessing.
    On the unaccompanied front, even before allowing for 
renovation and replacement, there is simply not enough rooms. 
Predominantly our junior servicemembers live in substandard 
conditions and they represent nearly 50 percent of the 
population on the peninsula.
    Accompanied housing is in similar shape. In terms of 
providing authorized square footage, most do not meet service 
standards. As a matter of fact, most all families are assigned 
housing ranging from one-half to two-thirds of their 
authorization.
    Size is not the only issue. Plumbing, heating and 
electrical afflictions also exist. Force protection 
considerations aside--and there are many--the outward 
appearance, not to mention engineering assessment, is quite 
candidly synonymous with the term slum or crack house.
    Unfortunately, the list of facility shortfalls extends well 
beyond the front door of our Korean homes. Most work centers 
suffer from the same failing infrastructure and structural 
issues and very few are expanded to accommodate significant 
mission changes over the last 30 years.
    The result: Everywhere you look, space is a premium and 
what space we do have is in dire need of renovation or 
replacement. We have typically compensated by smashing 
functions together in an ad hoc fashion, often to the detriment 
of efficient organization, communication and readiness.
    There are other opportunities to make a difference. The 
tax-exclusion initiative could start quite a fire in our force. 
In the most basic terms, quality of life, particularly to 
junior enlisted and their families, mirrors availability of 
discretionary dollars. A tax-exclusion policy for Korea aligns 
with Southwest Asia and Balkans precedents and is a prudent 
investment in both quality of life and readiness.
    As an example, the plan excluding the first $10,000 or 
$15,000 of taxable income would appropriately target our junior 
enlisted for the most significant impact, while sending a very 
clear message of support for our career force.
    Aside from the immediate impact on the individual and 
family, financial health, a plan such as this would also assist 
with our efforts to fill low-density, high-demand functional 
vacancies on peninsula.
    Currently, of nine assignment matches to Korea, only three 
will result in that person reporting for duty. Financial 
recognition of peninsula duty and associated hardships will 
help senior leaders recruit our best and brightest airmen, 
soldiers, sailors and Marines for Korea duty.
    In short, 50 years of neglect has gone on far too long. The 
prudent investment of dollars for new and renovated 
infrastructure improvements will greatly enhance our mission 
capabilities and bring us on-line with other theater war-
fighters.
    More importantly, providing a better quality of life for 
our servicemembers and their families will result in better 
morale, retention and recognition for the sacrifices they make 
every day in the name of freedom.
    The overall bottom-line is this: We deserve living and 
working conditions comparable to our forces in the United 
States and other overseas locations.
    Let me close by saying, USFK war-fighters, regardless of 
service, are proud, committed and ready to fight tonight and we 
will win decisively. We endure many hardships. Most are not 
accurately captured by the written word. But despite the 
hardships, every soldier, sailor, airman and Marine gives 100 
percent daily to ensure our ROK-U.S. alliance stays strong, 
vigilant and ready. There is little doubt America's presence in 
Korea will remain important for years to come.
    Our readiness will provide for the security of the Korean 
Peninsula and foster regional stability in Northeast Asia. We 
are simply asking for living and working conditions consistent 
with our service to America, the greatest nation in the history 
of this planet.
    Thank you very much for the opportunity and, quite 
candidly, the honor to address you today.
    [The prepared statement of Chief Master Sergeant Steve 
Sullens follows:]
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    Mr. Hobson. Thank you, Sergeant.
    Sergeant Dozier, we visited your barracks and you know I am 
very partial to your rank, so you can start now, sir.

                  STATEMENT OF SERGEANT DWAYNE DOZIER

    Sergeant Dozier. Mr. Chairman, distinguished members of 
congress, ladies and gentlemen, good afternoon. Thank you for 
allowing me this opportunity to tell you about the living and 
working conditions in the Republic of Korea.
    My name is Sergeant Dwayne Dozier, United States Army. I am 
32 years old and a native of north New Jersey. In addition, I 
am married and have two children.
    Since an assignment to the 2nd Infantry Division meant no 
command sponsorship, I elected to move my family to my wife's 
home town of Waco, Texas until my return.
    As a military legal clerk with the Army's Trial Defense 
Service, I am currently assigned to the 2nd Infantry Division 
at Camp Casey, Korea. The 2nd Infantry is Army's most forward-
deployed division. We are 12 miles from the Demilitarized Zone. 
I have been in the Army for eight years and have been stationed 
both overseas and stateside locations.
    In fact, I have three previous years of service in the 
United States Navy. While in the Navy, I performed duties as a 
torpedoman aboard a fast-attack nuclear submarine at New 
London, Connecticut. While onshore, we live in the barracks. 
Each one was shared much like a college dormitory. Ithought 
these barracks were outstanding because they were bigger than my 
bedroom I grew up in. The quality of life was very good overall.
    During my break in service, I was employed with Continental 
Airlines at Newark International Airport. But after three 
years, I missed the military. Quite frankly, I missed the 
culture of teamwork, pride, travel and the opportunity to 
pursue a college degree. Therefore, I enlisted in the Army in 
1992.
    My first assignment was Fort Hood, Texas. I was still 
single at the time and lived in the barracks. The barracks in 
which I lived in were satisfactory. I had my own shower, toilet 
and the ability to control my own heat and air.
    In addition, there was a lot of barracks renovation taking 
place at Fort Hood. It was getting better all the time.
    Mr. Hobson. Yet even better, thanks to Chet. We are going 
to have----
    Sergeant Dozier. Yes, sir, I know that, sir.
    Mr. Hobson. [continuing]. And actually, Ray DuBois, who 
left here, it would not have happened without Ray kicking at 
it.
    Sergeant Dozier. Next I was shipped off to Mannheim, 
Germany. As a newlywed, we were assigned to junior NCO housing. 
That was normally a two-bedroom house. Overall we were happy 
living and living on post. It was a great overseas tour.
    Following Germany, we were reassigned to Fort Gordon, 
Georgia. Once again we lived on post. As parents we were 
provided with a three-bedroom set of quarters. They were 
unsatisfactory in terms of size, but were clean, safe and close 
to work.
    Incidentally, many of the quarters had just been renovated 
like ours. That made a big difference when modern conveniences 
were added to these quarters, such as central air conditioning.
    However, the Army soon notified me it was time for a one-
year hardship duty tour in Korea. Without a doubt, living 
conditions in Korea are the worst I have ever seen or 
experienced. The building I presently reside in is about 50 
years old. It includes 10 small, one-man rooms, the latrine and 
shower facility is located outside the building, approximately 
25 feet away.
    Mr. Hobson. Go back over that. You all need to hear this 
again: Remember, this is Korea, and it gets cold.
    Sergeant Dozier. The building I presently reside in is 
about----
    Mr. Hobson. Real slow. I want to hear it.
    Sergeant Dozier. The building I presently reside in is 
about 50 years old. It includes 10 small, one-man rooms. The 
latrine and shower facilities are located outside the building, 
approximately 25 feet away. Likewise, the latrine facility is 
Korean War-vintage as well. It only stays clean and functional 
through the shared efforts of those who clean it.
    Of course, you can only imagine the courage it takes to go 
to the bathroom in the middle of the night in January. 
Therefore, getting a good night's rest is not always easy.
    Simply put, everything is worn out. The original plumbing, 
heating and electrical system needs to be completely replaced. 
In fact, water has to be run a few minutes before using due to 
the rust-colored appearance.
    We also worry about security because the doors and latches 
can be easily compromised.
    Although we have window air conditioning, the heating 
system poorly distributes the heat. Needless to say, the whole 
place smells like burnt oil. I would also add, it is really a 
tough place to come home to after a hard day's work.
    Fortunately, we have other quality-of-life facilities to 
support us, such as a community activity center, post exchange, 
a bank and the bowling alley.
    Mr. Hobson. Do you have movies?
    Sergeant Dozier. Yes, sir, we do have movies. It cost $3, 
sir.
    The gym is okay, but I have seen much better everywhere 
else.
    Let me simply close with this: The mission we perform in 
Korea is important and I love my job. I know most of my peers 
feel this way. My goal is to continue my Army career and my 
family supports me in this. However, I would not want to go 
back to Korea unless the quality of life and living conditions 
improve.
    It can be such a great assignment, especially if we could 
bring our families along. Korea is a nice country. Our mission 
is important to keeping the peace and preserving freedom for 
the South Korean people. But we deserve better and should at 
least live in working conditions equal to those in other 
overseas or stateside assignments.
    I hope you can help us. Thank you very much.
    [The prepared statement of Sergeant Dwayne F. Dozier 
follows:]
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[GRAPHIC] [TIFF OMITTED] T4873C.139

    Mr. Hobson. Thank you, Sergeant.
    I would like the other three of you to come up and sit at 
the table also. First of all, if you have anything that the 
three of you would like to say, we would be happy to hear.
    Do you want to identify yourselves for the reporter here, 
who is taking all this down?
    Ms. Glerup. Hi. I am Candy Glerup and my husband is in the 
Navy and we are stationed at Seoul, Korea. We live in Hannam 
Village. It is one of the high-rises. And we are on the 10th 
floor.
    Mr. Hobson. Do you have children? How many children?
    Ms. Glerup. I have two children, a 14-year-old and a 9-
year-old.
    Mr. Hobson. And you are on what floor?
    Ms. Glerup. The 10th floor.
    Mr. Hobson. Okay.
    Ms. Glerup. And one of the major problems we have out there 
at Hannam is when I do laundry, the sewage backs up into my 
bathroom. In the bathroom there is a drain outside of the tub, 
and it comes up and it floods out the bathroom. So therefore 
practically every day, I have to go in an rescrub the bathroom 
floors, and clean up and disinfect the areas.
    Mr. Hobson. And they are very small, too.
    Ms. Glerup. Yes.
    Mr. Hobson. Sergeant.
    Technical Sergeant Serilli. I am Tech Sergeant Mary 
Serilli. I am married with two kids back at home in Altus, 
Oklahoma. I am stationed at Osan. I have been there for about 
three months now.
    The hardest thing I have to say, as I have said before, is 
being a mom and leaving your kids back at home. Right now, it 
is very hard to communicate with them except we actually have 
the morale calls that we can call. They are able to call twice 
a week, and I am able to talk to them 60 minutes out of the 
day, and that is our total amount per month that we are able to 
talk to our families back home.
    Mr. Hobson. Do you have any e-mail capability?
    Technical Sergeant Serilli. I do have e-mail in my room. I 
do not have a telephone in my room and I do not have the 
computer e-mail in my room. So you know, I have to go to my 
office and do all that stuff there.
    Mr. Hobson. But the USO does not have any e-mail 
capability, as I understand it, in Korea. At least that is my 
understanding when I was there.
    General Schwartz. We have one cyber cafe, but the demand is 
so great, and we have to charge for it.
    Mr. Hobson. Okay. Anything else, Sergeant?
    Technical Sergeant Serilli. And on to being overseas and 
stuff, with a family back home, I allow myself only $250 a 
month so I can have the rest of my paycheck for my family back 
home, because to me they are the most important thing and they 
are the ones that have to pay for food and other payments and 
stuff like that. So I do not allow myself to be able to do too 
much in Osan just so they can have the majority of my pay.
    Mr. Hobson. And what do they charge you for a movie?
    Technical Sergeant Serilli. $3.50.
    Mr. Hobson. Somebody is going to get the message on that 
before long.
    Sergeant.
    First Sergeant Fowler. Yes, Chairman and ladies and 
gentlemen, my name is First Sergeant Fowler and I am one of the 
first sergeants in the 2nd Infantry Division. I am responsible 
for 516 soldiers.
    And I am within those 12 miles close to the border. And I 
will tell you that our sons and daughters, they are motivated 
and they are fired up, and they are fit to fight tonight. I am 
impressed to see this leadership and to see my general speak on 
behalf of quality of life, as well as for the senior NCOs and 
the officers.
    I am one of those senior NCOs that live in what we call the 
``crack house.'' I lived there every day since the 16th of 
January. This is my third tour in Korea: 1980, 1994 and then 
January of this year. I have 23 years in the military.
    And you know as NCOs, there are some things that we bite 
the bullet and we drive on. But in the NCO creed, it says that 
we will place the needs of our soldiers before ours. But to see 
the leadership talk on the behalf of quality of life for senior 
NCOs, that is hooah.
    I have the rust in my water. I have a small room. I had to 
go a buy a microwave, cable TV. But, of course, I have the 
funds to do that, but for my young soldiers, they do not.
    I chose to work six days a week because it keeps me busy. 
Because when I go back to that room and I have to take a shower 
and I look at that rust, even though I am an infantry soldier 
and go down to put my face in that water down there, no, I do 
not do it. But I must shave so I chose to do it so I can have 
the proper military appearance in front of my soldiers.
    So I want to thank you for this opportunity. And, General, 
I will go back and give a report to my soldiers and senior 
leadership here to speak on my soldiers; that is hooah.
    Mr. Hobson. Thank you, Master Sergeant.
    Any questions for any of these people from the panel here? 
Chet.
    Mr. Edwards. First, a comment. I think I speak for all 
members of the Congress in saying thank you for your service 
and your families' service and sacrifices for our country. I am 
convinced we could never fully repay the debt of gratitude we 
owe you. I hope with the leadership of this committee, wecan 
send you a message that your country respects and appreciates the 
service and sacrifices you are providing for our country.
    If I could go to you, Mrs. Sinclair, I would like to focus 
on your comments about the non-command sponsored families.
    Mrs. Sinclair. Yes, sir.
    Mr. Edwards. You testified that in the 6th Cavalry Brigade 
there were 35 command-sponsored families. Seventy other 
families--twice as many as the command-sponsored families--70 
other families chose to move to Korea without command 
sponsorship to be with their military spouses.
    Let me be sure I am correct on this. Your testimony says 
the families had to pay their own----
    Mrs. Sinclair. Yes.
    Mr. Edwards [continuing]. Travel expenses to Korea in order 
to serve their country halfway across the world. They had to 
pay their own travel expenses, out of their own pocket, on the 
limited income to be together as a family.
    Mrs. Sinclair. That is correct, sir. The 6th Cavalry 
Brigade was Patriot missiles and Apache helicopters. Many of 
the warrant officers who had been in the Army 15, 20 years were 
on their third and fourth tour in Korea. So for families, that 
year of separation was very difficult. So a lot of the families 
chose to pay their way over so that their family could be 
together.
    Mr. Edwards. And then their children are not guaranteed a 
place in the Department of Defense schools?
    Mrs. Sinclair. No, sir. They went on a waiting list because 
there is only space for so many and many of them home-schooled. 
And some of them went together and had their own school with 
five or six kids at different ages so that the parents could 
take turns helping out with the school.
    Mr. Edwards. Now in addition to maybe perhaps not getting 
their children into a Department of Defense school and having 
to pay their own way over to Korea from the United States, in 
terms of their housing allowances, they are not guaranteed 
space on post so they are having to live in the community.
    Mrs. Sinclair. That is correct.
    Mr. Edwards. Now, are they getting a housing allowance that 
pays for the total cost of their off-post housing?
    Mrs. Sinclair. Just what they would normally get.
    Mr. Hobson. Do they get a BAH?
    General Schwartz. I think they do get it based on----
    Mr. Edwards. What is it based on? Where they were here or 
there?
    General Schwartz [continuing]. Where they came from in the 
United States.
    Mr. Edwards. To take money out of their pocket to get 
there.
    Mrs. Sinclair. Yes, sir.
    Mr. Edwards. Take money out of their pocket to pay for 
their housing. Then take money out of their pocket perhaps to 
educate their children at home or some other private location--
--
    Mrs. Sinclair. That is correct.
    Mr. Edwards [continuing]. In order to have the privilege of 
sacrificing or even risking their lives to protect the rest of 
our country.
    Mrs. Sinclair. Yes, sir.
    Mr. Edwards. That, to me, is nothing less than immoral. And 
I appreciate your bringing that to the attention of this 
committee and other colleagues in the House.
    Perhaps if I could ask General Schwartz to help Mrs. 
Sinclair, I would love to see any other additional full numbers 
of the total number of non-command accompanied families in 
Korea and maybe a listing of what their typical expenses out-
of-pocket would be. Our country should be ashamed that we are 
asking military families to pay for their way over there, pay 
to stay there, pay to educate their children, when we have 
asked them to go across the world to serve in a very, very 
difficult situation.
    Thank you all for what you do, and we are going to make it 
better.
    Mr. Hobson. Ms. Granger.
    Ms. Granger. Thank you very much.
    I was sorry to leave. I have an appointment, but I wanted 
just to say again thank you for being here. You have made us 
very aware. We are all pretty appalled with what we have heard 
and seen, and know that there is a lot of improvement that 
needs to be made. To many of you, it will not make a difference 
because you will be on, unless it is someone who has gone three 
times, which is just incredible.
    But again, the fact that you have taken the time to let us 
know and give us the information we need to do our job, we 
really appreciate. And the people who will come on another tour 
of duty will thank you very much, as we do. Thank you.
    Mr. Hobson. Sam.
    Mr. Farr. Thank you, Mr. Chairman.
    I have a question on the issues that you talk about, the 
rusty water, the backing up of the sewage, the inability to get 
telephone access. Is this a Korean infrastructure problem? Is 
this typical all over Korea? Is this just on the military 
facilities, bases?
    And blackouts--you know, we are having a few in California 
and they do not discriminate; they even put the governor's 
house in blackout.
    First Sergeant Fowler. Yes, sir. I do know there in Camp 
Red Cloud (CRC) atUijongbu we do experience the blackouts on-
post, as well as the electricity, you know, with the blackouts, and 
then with the sewage backing up into the barracks. As far as outside in 
the community of Uijongbu, I do not have any knowledge about that 
because I am in a non-command sponsorship environment up there where I 
am at, sir.
    General Schwartz. Let me just answer it from a different 
perspective. In Yongsan, which is the center of Seoul, in our 
house we have the same brown water problem, same sewage 
problem. This is an infrastructure problem across the 
peninsula. They do not have the dollars.
    Mr. Farr. So the point is that is a Korean host country 
responsibility, then.
    Mr. Hobson. No, we can fix some of that.
    General Schwartz. We can fix it. It can be fixed on-post.
    Mr. Farr. And a follow-up question of all of this, and the 
fact that we were talking about your land-based initiative, and 
that that was going to be Korean dollars, why--we have been--
the committee has been, sort of, dealing with this 
privatization issue.
    It seems to me that the American presence there is a good 
economic asset. We spend a lot of money. Why wouldn't it be in 
Korea's best interest to just build privately and lease back to 
us at our cost all of our physical needs, all of our housing 
needs? Why would we have to put up anything of the $500 
million?
    General Schwartz. I think in the future, we are now 
determined, through the chairman's helping us, that it is the 
right way to proceed in the future; the private initiative, and 
then putting up the money and then leasing it back to us. That 
has not been the practice to date. So I think we are changing 
the way we do this, just like we are privatizing in the States. 
This initiative just started, but it is the correct way to do 
it.
    Mr. Hobson. Sam, if I could interrupt you.
    General Schwartz came to see me about a year and a half 
ago. And to his credit, I said to him, ``Why don't you go out 
and look at the model that we have done, that the Navy has 
done?'' although I have some problem with the way they went 
about it in the beginning. But it came out all right. ``And why 
do not you try to do that in Korea?'' And to his credit, he 
sent some people over and they looked at it and they did it.
    Also, I can tell you, when I was in Korea this last time, I 
met with some people who are interested in building barracks 
for us--Koreans--who may be interested in building barracks for 
us so that we can do something that we have been trying to do 
here also over there so we can solve some of these problems.
    Mr. Farr. The most embarrassing thing or horrible thing is 
just not having safe water. I mean these are basic and if we 
are going to prioritize some of the fixing of some things, we 
ought to fix water, sewage and electricity.
    General Schwartz. Sir, I would like to add that those funds 
that were requested in the 2001 supplemental are emergency in 
nature with respect to fixing this and exactly how you do this.
    Mr. Hobson. Thank you.
    Chet, you had a short thing you wanted to say?
    Mr. Edwards. I will be very quick.
    First, Sergeant Major Fowler, I want to tell you not only 
today is General Schwartz speaking out for you, he is out there 
behind the scenes month in, month out. So today is just the tip 
of the iceberg.
    Sergeant Dozier is my constituent in central Texas. Thank 
you for being here. And let me make one request: On the way out 
the door, could you tell the chairman there are a lot of those 
barracks at Fort Hood that still need a great deal of 
renovation. [Laughter.]
    They look like Korean barracks.
    And is it Sergeant Serilli?
    Technical Sergeant Serilli. Yes.
    Mr. Edwards. Okay. Sergeant Serilli, you have two children?
    Technical Sergeant Serilli. Correct.
    Mr. Edwards. And if there had been quality housing, 
educational opportunity for your children, in your family's 
particular situation, would you have had your whole family come 
to Korea or was that not possible because of perhaps 
commitments of your husband or family or other reasons?
    Technical Sergeant Serilli. No, if adequate housing was 
available, then no matter what I would have brought them. But 
since it is not, I do not want them to have to live in sub-
standard housing when they can be back in the States.
    Mr. Edwards. So it was the federal government's, in effect, 
decision to separate your family for a year after you were away 
from your family, I believe, during Desert Storm?
    Technical Sergeant Serilli. Right. It was, kind of, sad, 
because of after two months being away in Desert Storm, my 1-
year-old did not even recognize me when I came back home. He 
did not have a clue who I was.
    And so there are a little bit older now, but it still is 
tough on them as ever, especially when you talk to them on the 
phone; you know, they try to be strong and stuff but you can 
hear it in their voice.
    Mr. Hobson. And the sad part about this is that when they 
come home from Korea, unlike the Balkans, they are subject to 
an immediate--at least in the Army; I do not knowabout the Air 
Force, but I think it is the Air Force also--they are subject to an 
immediate other deployment. Whereas, if they go to the Balkans for six 
months, they are not eligible for another redeployment initially.
    And I just think that is wrong and I do not know how it got 
in there. But that ought to be changed. I mean, we ought to 
figure out how we do that better so that the inequities here 
are not right.
    And I am hoping we are talking enough about this that if 
people are listening out there are saying--and I do not 
understand, I will tell you, I think most of the members of the 
committee will tell you, we do not understand how this has gone 
on so long. And why there have not been hearings before and why 
we are having so much difficulty.
    Maybe some other bodies in some other places or even 
frankly--I know this is a new administration and they have not 
really gotten into it yet--but how this has existed. This has 
existed for as long as I have been in Congress.
    And we, in a bipartisan way, ought to get after this. And 
we are not going to let it drop here. We did not let it drop. 
General Schwartz, you came to see me a year and a half ago. We 
said we were going to try to work on some of this stuff. I 
promised you I would get to Korea. We got to Korea and we got 
back, didn't we, John?
    And I want to thank, John, my ranking member, because any 
place I have gone, John has picked up and he has gone with me 
to look at this. And he has been my partner in trying to change 
not only here, but when we did the European stuff before. He 
has been with me. And I want to thank all of the members of 
this committee for their support, because whenever we have 
asked they have always supported us.
    And I want you to know this is not going to end here. Your 
testimony is very compelling. I am hoping that we can get the 
video of this out to a lot of places so they can see and feel 
and understand what is going on here.
    Because frankly, all of us, you know, people say, ``Well, 
this isn't in your state or something.'' But we all have people 
from our states who serve overseas. And we owe those people our 
efforts on their behalf here.
    So, John, do you want to say something? Sure.
    Mr. Olver. Mr. Chairman, I want to thank you. I thank you 
for your comments but I need one minute.
    I just want to say that when I speak about the 
environmental obligations here, it seems to me a first 
obligation ought to be to provide safe drinking water, safe 
water for usage by the families at the same standards that we 
provide for Americans here and require of our own citizens 
close on, as a starter and then the business.
    So I view that as part of the infrastructure that has to go 
into a base in your permanent operations, safe drinking water. 
Then we would have to safely deal with the waste water along 
the way as part of the infrastructure along with the electrical 
and other sorts of infrastructure to go with it.
    Mr. Hobson. And I agree totally with you, John. I would 
also tell you some of the infrastructure on some of the bases 
here, you cannot drink the water either. And we have to get 
after those things.
    Mr. Olver. Well----
    Mr. Hobson. And those are the things that we have left too 
long untouched in this country. And there is a huge unpaid bill 
out here. Before we build new weapons systems and all this 
other stuff, we need to take care, in my opinion, some of this 
basic, human-life infrastructure.
    Mr. Olver. That is totally unacceptable.
    And my only other comment is to thank the six of you for 
very eloquent statements. I am sure everything that you have 
said here, since it is in the records, is available to be used 
as we might find it important and necessary to use it.
    Mr. Hobson. So this commitment is in agreement and we thank 
you all for being here and taking the time to educate us.
    The committee is adjourned.
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                           W I T N E S S E S

                              ----------                              
                                                                   Page
Blair, Adm. D.C................................................677, 741
Calkins, C.L.....................................................   865
Cox, Lt. Col. K.P................................................   335
Dishner, J.G.....................................................1, 575
Dozier, Sgt. Dwayne..............................................   741
DuBois, R.F......................................................1, 741
Duignan, Brig. Gen. Robert.......................................     1
Durbin, Col. R.E.................................................   677
Finch, Chief Mas. Sgt. F.J.......................................   159
Helmly, Maj. Gen. James..........................................     1
Herdt, Mas. Chief Petty Officer J.L..............................   159
Hinton, H.L......................................................   421
Holaday, Duncan..................................................1, 575
Johnson, P.W.....................................................1, 575
Johnson, Rear Adm. Michael.......................................1, 421
Lehnert, Brig. Gen. Michael......................................   421
Lehnert, Brig. Gen. Select Michael...............................     1
McMichael, Sgt. Maj. A.L.........................................   159
Mills, Ronetta...................................................   249
Plyler, Kathleen.................................................   249
Preston, Rear Adm. Noel..........................................     1
Raezer, Joyce....................................................   249
Ralston, Gen. J.W................................................   335
Riley, R.S.......................................................   249
Robbins, Maj. Gen. E.O., II......................................1, 421
Schwartz, Gen. T.A.............................................677, 741
Sinclair, Susan..................................................   741
Spiegel, J.L.....................................................   874
Squier, Brig. Gen. Michael.......................................     1
Staton, J.D......................................................   860
Sullens, Chief Mas. Sgt. Steve...................................   741
Tilelli, Gen. J.H., Jr...........................................   249
Tilley, Sgt. Maj. J.L............................................   159
Turgeon, Darcie..................................................   249
Van Antwerp, Maj. Gen. R.L.......................................1, 421
Weaver, Maj. Gen. P.A., Jr.......................................     1
Yim, R.A.........................................................   575
Zakheim, Dov.....................................................     1


                               I N D E X

                              ----------                              

                   OVERVIEW, ARMY, NAVY AND AIR FORCE

                                                                   Page
Chairman, Statement of...........................................     1
Dishner, Prepared Statement of Jimmy G...........................    92
Dishner, Statement of Jimmy G....................................    90
DuBois, Prepared Statement of Raymond F. DuBois, Jr..............    16
DuBois, Statement of Raymond F. DuBois, Jr.......................    15
Holaday, Prepared Statement of Duncan............................    70
Holaday, Statement of Duncan.....................................    68
Johnson, Prepared Statement of Paul W............................    31
Johnson, Statement of Paul W.....................................    30
Zakheim, Prepared Statement of the Honorable Dov S. Zakheim......     7
Zakheim, Statement of the Honorable Dov S. Zakheim...............     4

                            QUALITY OF LIFE

Army Demographic Data............................................   231
Army Housing Units and Standards.................................   231
Bachelor Quarters................................................   227
Basic Allowance for Housing......................................   238
Budget Blueprint.................................................   224
Chairman, Statement of...........................................   159
Childcare........................................................   241
Family Housing Standards.........................................   225
Family Housing...................................................   223
Finch, Prepared Statement of Chief Master Sergeant Frederick J...   203
Finch, Statement of Chief Master sergeant Frederick J............   201
Herdt, Prepared Statement of Master Chief Petty Officer James L..   181
Herdt, Statement of Master Chief Petty Officer James L...........   178
Housing Privatization............................................   215
McMichael, Prepared Statement of Sergeant Major Alford L.........   192
McMichael, Statement of Sergeant Major Alford L..................   189
Olver, Statement of the Honorable John W.........................   161
Operational Tempo and Family.....................................   233
Overseas Housing Priority........................................   218
Privatization....................................................   236
Retention.................................................220, 232, 246
Supplemental Appropriations......................................   243
Tilley, Prepared Statement of Sergeant Major Jack L..............   165
Tilley, Statement of Sergeant Major Jack L.......................   162

                        QUALITY OF LIFE-SPOUSES

Accompanied Tours................................................   327
Chairman, Statement of...........................................   249
Children.........................................................   289
Commissaries and Exchanges.......................................   332
Communication during Deployments.................................   284
Commuting Costs..................................................   284
Commuting........................................................   291
Daycare..........................................................   288
Dependent Education..............................................   331
Expeditonary Aerospace Force.....................................   289
Mills, Statement of Ronetta......................................   270
On-Base Housing vs. Off-Base Housing.............................   286
Permanent Change of Station Moves................................   285
Plyler, Prepared Statement of Kathleen...........................   276
Plyler, Statement of Kathleen....................................   273
Quality of Life..................................................   283
Raezer, Prepared Statement of Joyce..............................   307
Raezer, Statement of Joyce.......................................   303
Riley, Prepared Statement of Roslyn S............................   254
Riley, Statement of Roslyn S.....................................   252
Self-Help Centers................................................   281
Spouse Deployments...............................................   288
Tilelli, Prepared Statement of General John H....................   298
Tilelli, Statement of General John H.............................   295
Turgeon, Statement of Darcie.....................................   269
USO Centers......................................................   328

                            EUROPEAN COMMAND

Africa, EUCOM Personnel in.......................................   405
Anti-Terrorism Force Protection Issues...........................   392
Barracks.........................................................   406
Base Closures, Environmental Impact..............................   419
Basing, Efficient and Facility Consolidation in Europe...........   408
Budget Committee in CINCEUR Testimony, Role of...................   388
Chairman, Statement of...........................................   335
Congressional Instruction over MilCon Dollars....................   407
EUCOM Force Protection Initiatives...............................   395
EUCOM Force Structure............................................   415
EUCOM Housing Standards..........................................   398
EUCOM Spreadsheet Parameters.....................................   409
EUCOM's MilCon/RPM Budget Shortfalls.............................   393
Europe, High Cost of Building in.................................   415
Facilities, Challenges of Building in Europe.....................   417
Fcility Property, Ownership of...................................   415
Family Housing to Standard, Cost of..............................   388
Family Housing...................................................   406
Fiscal Year 2002 DoD Budget Request..............................   393
Force Protection and On-Post vs. Community Family Housing........   391
Force Protection Requirements....................................   390
Force Structure Level in Europe..................................   396
Funding Thresholds for RPM and MilCon Projects...................   411
Future Consolidation Initiatives.................................   418
Housing Development through Public/Private Partnerships..........   389
Hungary..........................................................   411
Maintenance Facilities...........................................   406
Married Proportion of EUCOM Personnel............................   387
NATO Security Investment Program.................................   399
Overseas Housing Cost for EUCOM..................................   414
Overseas MilCon, Importance of General Ralston's Advocacy........   412
Over-the-Horizon Forces..........................................   411
Personnel by Service, Request for Number of......................   405
Priorities of Enlisted Personnel and Families....................   413
Private Sector Collaboration with DoD............................   415
Private Sector Methods...........................................   416
Privatization....................................................   399
Ralston, Prepared Statement of General Joseph W..................   337
Ralston, Statement of General Joseph W...........................   337
Ramstein AB......................................................   404
Retention........................................................   407
Rhein-Main AB....................................................   404
Southeastern Europe, Strategic Presence..........................   412
Spangdahlem AB...................................................   404
Subcommittee Support for Overseas Facilities.....................   398
U.S. Government Support to Military Aboard.......................   394
U.S./EUCOM Facilities, Qualitative Differences between...........   394
USAF Families Living in EUCOM Housing............................   389
Young, Statement of Chairman.....................................   337

                          HISTORIC PROPERTIES

8th and I Marine Barracks........................................   500
Accounting System................................................   513
Budget Exhibits..................................................   515
California, Monterey.............................................   442
Chairman, Statement of...........................................   421
Demolition Efforts...............................................   509
Enforcement Tools................................................   508
Florida, Historic Properties in..................................   441
Fort Ord.........................................................   496
General and Flag Office Quarters.............................. 438, 512
Herrman Hall.....................................................   495
Hinton, Prepared Statement of Henry L., Jr.......................   425
Hinton, Statement of Henry L., Jr................................   423
Historic Properties, Auctioning..................................   498
Historic Property Inventory......................................   571
Historic Property Management.....................................   512
Inter-Service Cooperation........................................   502
Inventory Management.............................................   507
Inventory........................................................   438
Johnson, Prepared Statement of Rear Admiral Michael R............   464
Johnson, Statement of Rear Admiral Michael R.....................   460
Lehnert, Prepared Statement of Brigadier General Michael L.......   478
Lehnert, Statement of Brigadier General Michael L................   476
National Historic Register, Process for Inclusion on.............   440
Real Property Inventory..........................................   505
Robbins, Statement of Major General Earnest O., II...............   485
Robbins, Prepared Statement of Major General Earnest O., II......   487
Tax Credits, Historic............................................   504
Van Antwerp, Prepared Statement of General Robert L..............   449
Van Antwerp, Statement of General Robert L.......................   445
Virginia, Historic Properties in.................................   500
White Sands Missile Range........................................   572

                         HOUSING PRIVITIZATION

Basic Allowance for Housing......................................   639
Chairman, Statement of...........................................   575
Community Housing................................................   665
Competition......................................... 664, 668, 671, 674
Contract Enforcement.............................................   661
Coordination with Personnel Offices................. 666, 669, 672, 675
Dishner, Prepared Statement of Jimmy G...........................   624
Dishner, Statement of Jimmy G....................................   622
Exit Strategies..................................................   661
Fort Hood........................................................   649
Future Housing Requirements......................... 662, 666, 670, 673
Holaday, Prepared Statement of Duncan............................   614
Holaday, Statement of Duncan.....................................   612
Housing Goals....................................................   635
Housing Market Analysis..........................................   642
Housing Referral Services........................................   665
Housing Requirements..................................... 642, 645, 660
Institutional Knowledge............................. 663, 667, 670, 674
Johnson, Prepared Statement of Paul W............................   604
Johnson, Statement of Paul W.....................................   602
Joint Coast Guard Projects.......................................   658
Land and Unit Valuation............................. 666, 670, 673, 675
Lessons Learned......................................665, 669, 672, 675
Leverage.........................................................   646
Life Cycle Costs.................................................   664
Local Contractor Participation...................................   662
New Orleans................................................... 647, 656
OMB Scoring......................................................   643
Renovations and Moving Families in New Homes.....................   654
Residential Communities Initiative...............................   655
Rising Utilities Costs.............................. 664, 668, 671, 674
Three-Pronged Approach...........................................   633
Yim, Prepared Statement of Randall A.............................   582
Yim, Statement of Randall A......................................   577

                          U.S. PACIFIC COMMAND

Blair, Prepared Statement of Admiral Dennis C....................   680
Blair, Statement of Admiral Dennis C.............................   678
Chairman, Statement of...........................................   677
Hannam Village...................................................   733
Hawaii...........................................................   734
Historic Buildings...............................................   734
Military Housing Costs...........................................   720
Okinawa Facilities.............................................736, 738
Overseas Housing.................................................   729
Public-Private Ventures..........................................   720
Real Property Maintenance........................................   725
Schwartz, Prepared Statement of General Thomas A.................   700
Schwartz, Statement of General Thomas A..........................   697
Special Measures Agreement.......................................   717
Utility Systems..................................................   733
Wake Island......................................................   738

                        QUALITY OF LIFE IN KOREA

Blair, Statement of Admiral Dennis C.............................   744
Camp Greves......................................................   812
Camp Humphreys...................................................   811
Chairman, Statement of...........................................   741
Dozier, Prepared Statement of Sergeant Dwayne....................   847
Dozier, Statement of Sergeant Dwayne.............................   844
Dubois, Prepared Statement of Raymond F, Jr......................   750
Dubois, Statement of Raymond F, Jr...............................   746
Fiscal Year 2001 Supplemental....................................   823
Hardship Duty....................................................   815
Land Partnership Plan............................................   822
North Korea......................................................   814
Schwartz, Prepared Statement of General Thomas A.................   765
Schwartz, Statement of General Thomas A..........................   757
Sinclair, Prepared Statement of Susan............................   832
Sinclair, Statement of Susan.....................................   829
Sullens, Prepared Statement of Chief Master Sergeant Steve.......   840
Sullens, Statement of Chief Master Sergeant Steve................   836
Unaccompanied Tours..............................................   816
Unification of North and South Korea.............................   820
United States Presence in Korea..................................   815

                                
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